#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 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.

Today, I’ve got two guests hanging out here with me. My guests are—see if I got the name right—Tyler Hayes and Joáo Ritter. How did I do? They are here from the company Roof, and one of you is the CEO. That’s you, Joáo, right?

Joáo: That’s me, yup.

Jason: You’re both software engineers. How did you guys get into this? How did you decide, “Hey, property management might be a space that we might want to connect with in some way, shape, or form.” Then let’s lead in how Roof came to be and what it is?

Joáo: Sure. So, we started the company in college actually as a hobby project. I wanted to know how to build an app. I lived with a ton of roommates at the time, and we had a few things that we routinely split amongst ourselves: a few reminders of shopping, other expenses, rent, payments.

I started to learn how to build an app by trying to automate some of these things. Part of my brain is naturally inclined to inputting names, and brands and business-fy things. Over time, we took this concept, I was working [...], and several friends wanted to put it on the App store, so we did. We started talking to my good friends who had different skill sets from myself, and we worked together to make the product even better. A couple of years then, super as a hobby project still, we had this app for roommates to solve roommate problems or roommate exchanges.

We had a landlord, I remember at the time, Nathan, he really gave a damn about his tenants, about us. He's very much in tune with making sure we had a cozy place to live, the problems got solved, that he addressed us as human beings and not as assets, but his way of collecting rent was still pretty archaic, really easy to get logistics mixed up, and not communicate the way in which was authentic to him. We came to him. We were like, “Hey, look. We have this app for roommates that roommates are enjoying.” I think we really want to make this company all about home, about the people who share a home and make a place feel like home and operate well. That actually involves knowing that we're living in the house, but also the landlord to make the space available to tents.

Funnily enough, we actually didn't come into the project with the intent of providing value directly to landlords. Our value prop was actually for roommates. I think that actually makes us a really interesting and appealing platform for landlords because their customers are roommates. By addressing the problem less, as a property management problem and more, as a tenant management problem, we really get to the core of the problem solving that you have to do as a landlord: from late payments to reminders to making sure service requests are addressed on time and that the communication is proper between everyone involved; that everyone who shares a home has the ability to stay in tune with the conversation with the landlord as the head of the [...] oftentimes and maybe [...]. That all led us to entertaining the idea of expanding to landlords. Then going all in, “Hey, look, if I'm going to build the platform of the future to make home exchange possible, we have to, not only solve roommate dynamics but also the landlord-tenant relationship.”

Jason: Tyler, are you one of his roommates, then?

Tyler: No. We never lived together. Although, we did both have roommates and we were both in college.

Jason: Yeah. How did the two of you kind of pair up in the business here?

Tyler: Well, at that time, I was in design school. We were in two different universities, pretty close to each other. At some point, we talked about this idea of building this app. Joao was really interested in figuring out how to build an app, [...] gets to practice in doing that is in trial-by-error, I guess. For me at the time, it was a similar sentiment because being in design school, I was really eager to work on something, some kind of real-world projects, work on something that's going to be meaningful, that I could follow, and continue to invest in. At the time, part of the motivation for starting the project was just like, “Hey, let's just make something.” We’re interested in learning some things and doing some things like, "Let's just make something." That was kind of it at first.

Jason: Yeah, cool. Let’s let the audience know what is Roof. If you can give the back story. What the heck is it? What does it do?

Joáo: [...] is an app for tenant management. It lets you collect rent payments and manage maintenance requests from your tenants, and communicate with your tenants. It's all about being on the same page with your tenants, you're getting paid and making sure your home operates as you expect, making sure your tenants have a great renting experience. It solves the core functionality the landlord needs when it comes to renting their home and growing their portfolio from there. For roommates, it helps you share your reminders, shopping items, expenses, and anything you may want to exchange throughout your living together.

Jason: A lot of people listening, they might have AppFolio, or Buildium, or Propertyware, or Rent Manager or Rentec Direct, or one of this property management sort of back-office accounting solutions and some that might help with the maintenance request stuff. Some of them are okay, some of them a lot of our clients or people listening will use third party tools like Property Meld or Latchel. I'm really interested, and I haven't heard of anything for roommates, so that's pretty unique that you have something that helps facilitate roommates. Do you find that a lot of your target audience are running college housing or dealing with college housing situations?

Tyler: Yeah, that's a really big segment of the people that we talk to, but it's not entirely. Generally, it's landlords with a bit of a smaller portfolio. The kind of people who probably know all the tenants by name, who would otherwise maybe be texting their tenants, having that kind of relationship with them. Basically, landlords who care about communication and especially landlords who care about actually just doing things that their tenants are going to appreciate. Because ultimately, for a lot of landlords, they recognize that the services that they can provide, the renting experience that they can provide for their tenants, is ultimately going to be reflected as their brand as a property manager, as a landlord. For landlords who want to invest in that, those are typically the ones that we see most invested in Roof.

Joáo: Yeah, totally but let me double down on what you said. I think there's a lot to be said about the societal trend towards people moving in together, not for the sake of a family necessarily, but for the sake of economic efficiency. People are moving into urban areas, people are moving into college towns for school, and whatnot. Instead of living on the outskirts and pay cheaper, people try to live together and share spaces and live more cheaply. I bet a lot of landlords listening in here have rentals that they rent—not to single families—even though they may be single-family homes but actually to people who share a space as roommates, who may otherwise don't really have a relationship with one another apart from being roommates who may have found each other on craigslist or some service.

What you'd probably run into as a landlord in those circumstances is you have to keep up a relationship with them. Normally, you have one head of the house, someone on the lease, or someone that you have their email, that you go to directly and expect them to convey the message to the rest of the house. That’s kind of a recipe for disaster when you talk about communication when you're trying to rely on one person to communicate an idea or a circumstance to a whole household.

The core of our app revolves around sharing space and sharing space between people who all share the responsibility of the space. If you're a landlord who finds himself in this puzzle of trying to manage roommates, it makes it a lot easier to reach out in one spot, allow roommates to split payments as they will as long as you get the full rent ship at the month and then give them, as Tyler had said, a great experience meanwhile.

There's a lot to be said about that. I think we have a lot to grow to accommodate larger portfolios which we fully intend to do. But for the time being, it's 100% focused on landlords who see the opportunity in creating a brand for themselves and experience for their tenants and solving problems through effective communication.

Jason: What are some of the challenges that people sharing space will run into so that we can paint a picture of how this app solves these problems? What are some of the problems?

Tyler: We could probably tape a whole podcast about that question.

Jason: Cool. Let's paint a picture here.

Tyler: At the core of it all is communication. The problem basically is, how can you communicate with each other things that each other needs to be responsible for, things that need to be done. Some of that can be abstracted into things like, if you're living together there's going to be expenses that are shared, there's going to be responsibilities that are shared, and purchases that are shared, items in their household that you might want to share responsibility for keeping in stock. Those things certainly tend to change a lot from household to household depending on just like what your house is like.

In designing Roof, I think we tried to create some tools that were specific enough to target the main needs of people but still general enough to be applicable to as many different types of households as possible. The things that we've targeted are: one, just splitting expenses, so being able to keep track of who's paying for shared things whether it's groceries or split bills like monthly expenses like utilities or…

Joao: Rent.

Tyler: ...rent, yeah.

Joao: That's kind of a holy grail of sharing space.

Tyler: Right, the holy grail. We included a shopping list feature to keep things in stock that might be shared. Things like trash bags and groceries. In our household, we use it to track things like olive oil, things that we share for cooking, kitchen supplies, that kind of thing. Also, there is the responsibility aspect that I mentioned. Being able to sort of offer some kind of recognition for saying like, "Oh, Joao, took out the trash. Joao cleaned the dishes. Joao swept the hallway." Things like that, responsibilities that sort of affect everybody, that help everybody, that you want to offer some ability to track, but without getting too into the weeds of being like passive-aggressive like, "Come on. Do this."

Joáo: Yeah, its responsibility kind of masked as reminders. So, “You have to take out the trash on Sundays.” You program your Roof app to schedule it between your roommates. So, one Sunday it'll be using, "Jason take out the trash." Then you know it’s your turn then next week time, “Tyler, take out the trash.” You can kind of all share the responsibility. Everyone has a roommate story. I think the roommate story, the core of them, stems from an imbalance of sharing. Maybe one person's accustomed to doing everything and has that sense of responsibility and autonomy but they feel as though people around them aren't keeping up or you're on the opposite end where you feel as there’s someone in your house just does everything without you having to say anything, and without you having the opportunity to be involved.

All those are communication issues which I think is the backbone but still abstract. In order to make those tangible things like expenses, shopping, and reminders really kind of lay the foundation of the interactions. Rent payment is the thing you sign on the lease on together to be able to share, right, and we really see the opportunity there because no matter how many expenses you share throughout the month, usually they add up to less than your [...] in the month. You can imagine creating a more comfortable splitting environment where at the end of the month, I may buy a handful of groceries, and a new piece of furniture, but when it comes time to pay rents that just means I'll pay a little bit less and Tyler will pay a little bit more. You as landlord [...] full amount, we're even on our end, and all is well. That's kind of our way of operating.

Jason: It's interesting because really, there are so many different personality types out there. I don't know if you've ever played around Myers Briggs, but in Myers Briggs, for example, you've got the ISFJ and the ESFJ personality types that are very much like givers, and they're always serving people, doing stuff for other people, but they don't want to ask. They’re just arguing, and they're expecting people to reciprocate.

Joao: Totally.

Jason: They're always let down because nobody gives as much as them. But their mindset is, "If I do this, people should just do it back, they should reciprocate." A lot of other personality types, they're focused on other things, they’re not focused on reality, they're focused on ideas or code or whatever you guys might have been focused on. There's this power play, and passive aggressiveness comes out, and challenges come out. It can get ugly. It's simply because somebody didn't communicate with somebody else. I can see how that would help. It probably could be used in families, let's be honest.

Joáo: It's not dissimilar from Slack for workplaces. When you have a team that needs to collaborate or to get something done, you're going to have different personality types. Different people are more inclined to step in, and different people are more inclined to observe and take it in and then respond over time. But if you have the right organization of how you interact with one another, you have access to a whole group, you have access to individuals, you have access to services that come through and talk to you via this medium, you're able to actually keep clarity over the whole situation and manage those personalities.

Roof, as a tool, is particularly useful for particular groups of people but it's really hard, as you mentioned, to solve the problem holistically. I think it's not terribly efficient to try to solve roommate ship. There exist roommates who already enjoy each other's company, and they aren't in this tug and pull battle. They just really could use a tool to basically make concrete their group and their place of interaction, and then through that means, you keep organized, but you're not necessarily leaning on the app to build your relationships. I don't know we're going to build any relationship that doesn't already exist, but we do have to step in and be a tool for people who are already managing themselves via a spreadsheet or via some other less efficient mechanism right.

Jason: Yeah, cool. Yeah, I like it. What else should people listening, know about Roof?

Joáo: I'm really proud of our team. I think that's why I love working on the project is I think we've managed to surround ourselves with incredible people. I think people who use Roof see that in the form of how they interact with us, and how we enjoy interacting with them, how we make ourselves available. Our whole team, from me all the way to people working on sales, it's a very small team. I don't state people as there’s just a bunch of us, a handful of us with pretty particular responsibilities.

You have access to engineering, all the way to design, all the way to decision making, and we want your input. That's how we kind of operate internally with [...] one another. We consider the landlords who use us as investors. They're investing in us by putting their portfolio onto Roof, by extracting value that we have to offer, and by wanting our company as a means to build their own company, that's something I really care about. It sits tangent to the app itself, but I think it's actually a massive part of what you're getting with Roof is the team behind the project.

Tyler: I actually just want to second that because I think it's something that, in my opinion, probably sets apart the company that we're building compared to some similar service in the same industry. I tend to be the member of our team who talks to the people who are using Roof the most. If you got an email from Roof, it's probably from me. It's something that we benefit from tremendously, getting to talk straight to people who are using Roof and not just from a feedback perspective like, "Hey, how is this feature working for you? What's something that you have in mind that could be working better?" It feels good to be able to hear the opinions of people have about how the app is working for them and any kind of conversation, really.

What I found is that the types of landlords I think who want to invest in Roof tend to be the types of landlords who are very much interested in being a part and building something better than what already exists in the market right now. By nature of that, we're the type of people who are really eager to sort of get involved in the way that we want people to be involved which is, "Hey, like if you have an idea for something that we should be doing, tell us and reach out to us." We maintain a Slack channel with some of the more involved users that we're always trying to invite more people to. We maintain pretty regular e-mail communication with quite a few of our people who are using Roof. I think that benefits us as well as the people who use Roof a lot.

Joáo: Jason, I know you know for sure how interconnected a lot of property management org, and financial freedom hustlers are. People love interacting and inspiring one another to take risks, to make the move, to encourage and to have the support, and I think we're an extension of that. We don't sit side by side to the landlords knowing the real estate investor is actually going out and paying attention to the market and purchases, etc., where we feel like we're very much part of that conversation.

If you're expanding your portfolio, loop us in. We pay attention to so many blogs, from BiggerPockets to Instagram feeds of individuals who are, not only doing a hell of good work but also inspiring other people around them, in the same boat, maybe a little bit earlier on their careers to keep going. It's very similar, as a small business owner to work with small business owners towards this common goal.

Jason: Very cool. Alright, I have feature requests, then, for you guys. I’m just kidding. Maybe these are on your road map, I don't know, but this is how my brain works. I'm going down all these channels. One huge opportunity, it sounds like for guys, is in the property management space. All these property management software tools, they lack this roommate functionality that you've created, this communication platform.

Do you see the day that maybe you could somehow connect, or integrate with maybe Rent Manager, it could become sort of a strap on to AppFolio or Buildium or something like this to where if they have some college housing, they could set up the college housing people on this app and they could at least do the accounting. Because some property managers are using a third party tool just to collect rent payment like PayLease or something like that even though they have their own system. I think there might be a potential here for those that are doing college housing right now to use something like this, and they might have hundreds of doors.

Joáo: Sure, yeah. Absolutely. I think the question is kind of multifold. I think there are several avenues, an opportunity that could be pursued there. The idea that Roof is a side-by-side tool to PayLease or AppFolio is interesting. You can set up your entire portfolio on Roof, and choose to collect payments directly on Roof or just mark settlements. If you want to actually put in your accounting on Roof, we don't yet have a full suite of graphs, charts, and really making your progressions known to you but not yet—that's another avenue. We could just go on accounting side-by-side through our communication core and really offer the value of other platforms. Or if you want to use the Roof side-by-side to it, you can just use Roof as a ledger, but actually, collect your payments through another software and just do all your communication on Roof.

In which case, it's interesting to entertain the idea of proper integration between the two because I think in essence, we are competing and we are going after a different market. I think a lot of those tools, AppFolio in particular, is loaded with features that a lot of smaller rental operators don't need and it just overcomplicates the experience instead of ensuring it has a richer accounting feature. But oftentimes, too rich. It just gets in the way of the one report that we need, or the one piece of information that you actually come to over and over again.

Jason: It’s too cost prohibitive for the smaller investor.

Joáo: Too cost prohibitive. Absolutely. I'm unsure if a priority of ours would be to integrate. I think we would rather compete, to be honest, just because I think we see our market and our users as really valuing Roof as a strong competitor to those. I think it's a massive market. As you said, property management investors, property investors, come in all types, they all have different motivations.

But I think the core of what you're getting at is, how can we extract the juicy features from our competitors and make them a part of the Roof in the most elegant way possible, and that's something that we're incredibly in tune with, "How our competitors' moving? What people are using?" Also, I don't think we're competitor-driven, I think we're customer-driven 100%. I'd rather spend my time talking to people who are using our app and appreciating the core of the features. We want to stay [...] with what we believe to be true about problem-solving and then say, "Yes, right. Cool. What kind of financial reports do you need? What kind of integration [...] do you need?" Then working those into the app in an elegant way.

I think its value is to actually just build a feature and just throw it in another tab and just grow your tabs of different things you offer. Everything has to play with one another really well so that you actually create an experience that anyone can come into. From a person with one house and a couple of tenants to someone with 50 homes and hundreds of tenants and make the most of the platform. I'm more interested in that side of things—the post-integration bit.

Jason: Right. Well, if you're open, in the future, I think there's a whole target audience that could use this that have lots of college housing clients. Rent Manager has an open API, Buildium has been doing integrations with Property Meld and Happy Inspector and others, and so I think there's a possibility there. AppFolio doesn't generally play nice with others. Usually, some people are finding workarounds, but they're still using third-party tools to do a lot of things.

This is how my brain works are is, I would imagine one of the biggest challenges that roommates have is they lose a roommate. I don't know if this is some sort of future sort of idea, but I imagine this comes up a lot. They lose a roommate, they got to figure out how to pay rent, they need to find a roommate, and they want to make sure that they get the right fit. I don't know if this is something that you guys plan to tackle or this is a problem that Roof helps with it at all.

Joáo: Yeah. I'll let Tyler explain, but I just want to say that, we sit and throw around ideas every single night. The most frustrating piece is just sitting on just like ledgers of great ideas. We're like, "We'll get to those. We have to do this thing that's in our face right now."

Jason: How do you decide what comes first? How do you make the decision? Is it the noisiest customers or your biggest customers? As a software company, how do you decide which features to focus on, and which ones to throw away?

Joao: It's a great question. It's the hardest part of the job, right, of making sure everyone's on the same page and has a shared belief of the direction we're going in. Oftentimes, I find that short-term goals can make the most sense when everyone sees with the opportunity that exists one, two, three years on the line. They still have to sit down and execute for three months at a time in particular feature set or particular go-to-market strategy or something like that, keeping these chunks of time open for discussion. Then, once everyone feels good that the product, that the users, marketing and the sales align, to basically, ink it all, sit down, get to work, knock it out and then go through your evaluation phase and then repeat the process. It seems like the most productive way to go about it.

Obviously, I think as your cash flow increases, you're able to grow your company then you can kind of bring more heads, more brains out of the team and start to see if you can scale more horizontally. For the time being, I personally love working on a small team where we each kind of know each other intimately, know how we work and share [...]. It makes the decision making a little scarier because you have to pick a couple of things and do them, but you do them so well, I think. Whatever you choose to spend your time on, you just got to do the hell out of it and really believe that is the right way to go and then be truthful with yourself along the way if you need a correction.

Tyler: Speaking to the scope of how user feedback, and what some of our customers are interested in, speaking of how that fits into the picture of what do we build next, there's certainly not any kind of rule for that. In fact, a lot of times, the two are sort of in odds with each other; the sort of things people would like to see us build versus the things we decide to build. Those are really tough decisions to make, especially when you have to make a decision and then respond to somebody in the email who's saying, "I love your app. I can't wait for you to build this." Then I got to come in and say, "Well, actually, it's going to be a couple of months before we can do that."

A great example of that actually is right now, for the last couple of months, Joao and I have been invested in working on the new iOS and Android apps that we'll be shipping soon. Add the expense of otherwise, started addressing some urgent feature there's a couple of bugs that we'd love to be fixing in the current apps. Every single time something is brought to our attention where it's like, "Hey, this would be really helpful to have right now." We start to balance and say, "Okay. Well, do we take a couple of days away from this other project we're working on to do this thing that will help now? Or do we just buckle down and continue to invest time in something that's going to ultimately be an investment, and how well we'll be able to scale in the future?"

The big reason that we're rebuilding the apps in the first place, from a tech perspective, the new stack that we'll be using to maintain those new apps will be a lot easier to maintain and so, adding a feature six months from now will take a lot of less effort than it would have taken now or a couple of months ago just because of how we're rebuilding things. The short answer is that it's really tough. Sometimes, one of the most frustrating things to deal with is having to tell people, "While you're suggesting is great, and I wish I can give you that. We've got to make a tough decision and focus on something else right now.

Jason: I think every entrepreneur listening gets that. We all have situations in which we have our vision as an entrepreneur or as a business owner of what we want to do and accomplish, and then we have what our target audience is really screaming and begging for that we want to do. Every property manager probably has some sort of process they want to change or something they want to improve or something they're dealing with. I think that's the thing to realize is that the software that you're developing or the business that you're building, if you're a property manager that's listing, anything, it's always a living, breathing thing, it's never done.

Just like, as human beings, we're never done. We're all still in the oven, so to speak. There's always going to be bugs, there's always going to be tweaks, there's always going to be changes—that's just the nature of software. You release new features, there's going to be little things, little nuances, and little things to change.

Over time, you build something that just gets better and sharper. Then sometimes you have to completely rebuild something. You're like, "Okay. It'll be better to start over and do this really well now that we've learned so much than to keep building on a scaffolding that was not as strong." That's just how it works. I think our own main program, our seed program, we're on our third total revamp that we've done. I already have a whole list of old stuff I want to change, and add, and do—that's just how my brain works.

Joáo: I think what's really important though is the fact that you've learned over time. It's not about always questioning, "Are you doing the right thing?" To me, it's all about knowing you are doing the right thing. If we make a choice to build something, "Let's build it. Let's ship it." There's going to be corners that need tying up in a good sense but, "Let's ship it. Let's learn from it. Let's move forward. Let's put weight on it and then let's see how far it can go until it stretches. Let's let it stretch." Let us not be afraid to let it stretch and feel comfortable like, "Hey, the work we did can hold that weight." But at the same time, we have to be evaluating, "Alright. Cool."

If we then want to add more people or scale our transactions a hundredfold, "Will the stretch break?" At that point, you have to make a decision, "Yes. Let's go and do the remodel." I think the analogy for a lot of real estate investors is the remodel where maybe you have a house and you have a really janky kitchen. The whole house is beautiful, but something about the kitchen is off. People living in the house, they know that they would rather have a nicer kitchen that's going to take a long time. Meanwhile, you have a sink in the bathroom that's a little loose, and you have just a tweak off in the garden or something. The tenant will be like, "I get it. Yeah, you need to fix the kitchen. Spend time there. I'll deal with the sink and the little [...]."

Jason: Meanwhile, I need a kitchen.

Joáo: Yeah. A big thing for us is our Android app currently is running our web app on mobile, so it works. You can do everything you need, but the experience, the actual motion, the feel of it doesn't compare to what we built nearly iOS. We have a ton of people on Android who’s like, "Oh, I could use a new Roof experience in Android." Meanwhile, a lot of people already in iOS or on the web are kind of hoping at more sophisticated problems. But we’re like, “Look, by building a native Android app, we can also be able to offer this experience to a ton more people." Actually, [...] of doing that, we're now able to build for iPad, for desktop, new tablets, etc. It's exciting.

Jason: Yeah, cool. I think it's exciting to hear what you guys are doing. I think you've done something really unique in the roommate space. It sounds like to kind of solve some problems. You've probably, solved a lot of passive-aggressive issues, and some [...] properties and created a lot more peace out there. It really sounds like this is software that creates a peaceful environment for all parties involved, including the landlords. To wrap this up, how can people find out more about Roof, and how can we get in touch?

Joáo: Our website is roof.io. That provides an overview of the features that we offer, the different sides of it, you can read about how roommates use Roof, how landlords can use Roof. There's this little button that says 'Extra' which you click on, and we try to provide a lot of documentation to our accompany, it directs to the website also. You can go in there and find some more detailed information like FAQ and some guides for how to get started as a roommate or as a landlord or a renter. There's a lot of information on there.

We also use Twitter to put out some updates as well as Instagram. We try to stay pretty up-to-date with that. There's also our Facebook page. We'll put some links to those wherever Jason thinks the best place to put some links. Reach out to us at team@roof.io—email address. Get directly in touch with us. We'll schedule a phone call with you, see what's up, see what's on your mind, see if Roof is a right fit for you. We're open to having a pretty open discussion. We've doubled a lot of users at this point, so we know kind of the ones that's really just a [...] value of what we offer them and those who are still in the edge of being the perfect fit for them. We'd be happy to kind of walk you through and making the right choice for you.

Lastly, it cost $2 a transaction to use Roof. You can assume that yourself as a landlord or you can pass it on to your tenants, in which in case, it'd be free for you. If you do choose to assume, whenever your tenants come to pay, we give a little shout out for you in the app saying, "Your landlord is covering it for you. They're dope." But if you want $20 of transaction fees for free, use a code 3875 DoorGrow, it's a proprietary code just for the show, just for the audience here. You can get started, put some tenants there, try it out for a lease, you won't pay or tenants won't pay for about a year of that and see if it's right for you.

Jason: The code one more time.

Joáo: Code is 3875 DoorGrow.

Jason: Okay, thanks for that. Those listening, property managers, that [...] college housing or deal with shared housing situations, I’d be be curious to get their feedback and see how it works for them. That’d be pretty cool. I appreciate you guys coming on the show. Have you guys thought of starting a shared housing property owners’ community? Like a Facebook group or something. It sounds like you’ve got this going in your Slack channel.

Tyler: Speaking of Slack Channel, that would be another way to get in touch with us. Just scroll down to the bottom of the landlord’s page on the website, you can request to join there. Creating a community like that, it's not something that I think we have plans for.

Jason: It's cool when you get them together, man. We’ve got our DoorGrow Club Facebook group, and you get these people together, and they start sharing ideas, helping each other, and the momentum is just awesome. I haven't heard of anything in the shared housing sort of space, this idea of having a property that is shared and this type of owners. College housing or whatever it might be, a cool little community out there, I guess. Anyway, check these guys out. Get into their Slack channel. Go to roof.io. I appreciate you guys coming on the show and excited to see what you guys do over the next few years here.

Joáo: Thanks, Jason. Thank you for having us. It was a lot of fun.

Jason: Alright. For those of you who are watching, make sure you get into our Facebook group, our community, which is doorgrowclub.com. You can get to that, it will redirect. If you are watching this on YouTube, make sure you like and subscribe so that you get these videos. We release the videos on YouTube before we release them to iTunes.

If you're listening in iTunes, make sure you go to our YouTube channel, it's youtube.com/doorgrow, and click the red subscribe button there. Click the subscribe button and get subscribe and start getting notifications usually on your browser when we release or drop new videos. You can get this information and see some of these people instead of just listening. Until next time everybody. To our mutual growth. I hope you have a fantastic day and week.

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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DGS 83: Streamlining Property Management with Hemlane 0

Jun 18, 2019

Do you own single-family properties, but rent them out? Are you tired of dealing with tenants? Incompetent contractors? Why do-it-yourself (DIY)? Why waste your time? About 70% of owners self-manage their properties. You can’t and shouldn’t do it all. Help is available.

Today, I am talking to Dana Dunford of Hemlane, an all-in-one rental property management solution. After being encouraged by family and friends, Dana decided to do real estate investing on the side while working at Apple. She tried self-managing her properties, only to discover how difficult that can be - even tougher than calf dressing!

You’ll Learn...

[02:50] Moving from self-management to hybrid solution involving experts in real estate/property management to streamline and mitigate risks.

[04:15] Property Management and Technology: Taking a different approach to build communities of agents, owners, and managers to work together.

[07:50] Potential for property management industry: Buying real estate is easy; property management is much more difficult, but determines the success of your investment.

[10:27] Property managers have to do everything and need to be Jack-or-Jill of all trades (maintenance, lawyer, therapist, sales, marketing, etc.).

[10:56] Dana’s driven toward challenge; something new happens every day in property management and risk needs to be mitigated.

[11:27] Subject matter experts should provide best practice, place, and process; there’s only so much technology and robots can do.

[13:05] Entrepreneurs/Gluttons for Punishment: Highly adaptable and enjoy challenges.

[14:56] Turnkey: When something goes wrong, property manager gets blamed.

[15:47] Hemlane: Flexible and transparent property management platform that helps property managers solve problems.

[19:55] Hemlane’s Ideal Prospect: Under 200 units and wants to grow portfolio/clientele.

[22:36] Hemlane offers automation of administrative tasks and competitive advantage by building relationships and services over time.

[27:10] Real estate investors find out about Hemlane on social media and blogs.

[31:57] Are you trained and qualified, or just pretending to be a property manager?

[35:15] FAQs from Property Managers: How can I communicate with owners? Will Hemlane take my clients? How do I know if I need help?

[41:07] People aren’t buying property management; but safety, certainty, and trust.

[48:40] What is a hemlane? House Differentiation: Hem is house in Swedish; lane is a path that divides you from others.

Tweetables

Property management is challenging; something new happens every day.

Whether you love or hate them, industry isn’t ready for robots to show properties.

Turnkey is a terrible word; if something goes wrong, the property manager is blamed.

People aren’t buying property management. They want safety, certainty, and trust.

Resources

Hemlane

Dana Dunford’s Email

Dana Dunford on LinkedIn

Hemlane on Software Advice

Industrial Calf Dressing - California Rodeo Salinas

Russell Brunson’s Value Ladder

DoorGrow Website Score Quiz

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.

Today's guest, I'm hanging out here with Dana Dunford of Hemlane. Dana, welcome to the show.

Dana: Great. Thanks so much, Jason, for having me.

Jason: I'm really excited to have you here. You have such a bright personality. I was really, I guess, curious with people. I was really biting my tongue, resisting just getting into figuring you out, and asking you questions. It was always a challenge for me. Now, I can do it. Let's get into this.

Dana, why don't you share with everybody a little bit of background on you and who you are. Then, let's transition into getting into how Hemlane came to be.

Dana: My background, by accident, I actually ended up at Silicon Valley. I'm just through studying here for university. My background was actually always been on technology and I've always been fascinated with that. I actually got into real estate and looking at real estate investing coming through two different people. One was my brother-in-law, who was investing in real estate and saying, "Dana, you need to get into investing as well. Do that on the side." I was working at Apple at that time doing new product introductions. Then, the second was actually who my co-founder is today, Frank, who has rental properties across the US.

I haven't been on the property manager's side until we started self-managing. We ended up self-managing our properties remotely and trying to figure out how to make that work. Essentially, starting with self-management and then actually moved to a more hybrid model that worked out really well, where we were working with local managers and local real estate agents to help us with the management while we were still controlling the financials, the rent, and still be involved in it.

So, a little bit of a hybrid solution which today I don't see actually in the market. It's either full service or do-it-yourself. I think do-it-yourself is really a horrible one to take because then every single person, all 43 million renter households, with 20 million people are looking for ways to essentially streamline and mitigate risks and all of that. Having property managers and experts in the industry really makes a ton of sense. That's what brought me to a more of a hybrid model.

I left Apple then and went to business school at Harvard. After that, came back to Silicon Valley, was working at a company called Nest which is home technology, got me more excited about real estate technology. They were actually acquired by Google and I realized I want to actually start my own thing. Property management is one of those incredible industries where technology to date, there's a lot of players out there, a ton in the property management software space—quite frankly too many of them—but taking that model and saying how do we do it in a different approach, think about it differently, and really build communities of managers, communities of agents, communities of owners to work together because 70% of the owners, as you know, Jason—I think actually you were the first person I learned that from—self-manage, so how do you connect those 70% to get some sort of help?

Right at the beginning, they're going to say, "I don't need help," but sure enough they call and they're like, "I had a nightmare of a tenant. I hate this. They're selling my portfolio," or, "I need some help." Really helping them and being there at the right time—a lot of times that right time for them—is getting involved with them even when they're self-managing.

Jason: Yeah. I got the 70% stat from the Iceberg report which says, "On a single family residential, about 30% are professionally managed." I need to point out in your bio because this is the only bio I've ever seen. It says that you're an avid equestrian, paraglider, and skier. She is the first woman to win a calf-dressing championship belt buckle at the California rodeo. Are you kind of a cowgirl, then?

Dana: Yeah, I did. I grew up in a farm in Salinas, California. We had horses, some cows and stuff in the backyard that really did teach me a lot of hard work. I did enter and I was the only woman. I don't why women don't enter these events. Salinas has the largest rodeo, the largest across the entire nation, largest prize pool of money, [...] and stuff they give you. I entered something called calf dressing.

Actually, the huge advantage being a woman because you have to dress a cow in these Wrangler jeans. What's fantastic about it is you actually have to be able to get under the cow so you have to be small. These big burly farmer guys trying to do it and I came in with a team of two other guys. It's three people on a team and then me. I think there's a huge advantage to being small and just being able to dress it really quickly while they're holding down the cow. Anyway, we got a huge massive belt buckle, the same one that the pro bull riders win at the rodeo, which is pretty cool.

Jason: This is so unrelated. This just fascinates me. You're actually putting pants on a calf, that's what's this is?

Dana: Yes, that's the event. It has the same credibility as the pro bull riders that win the top belt buckle. You get the same belt buckle. It's like the best hack to getting a professional rodeo belt buckle.

Jason: This is funny but it reminds me of listening to some of Tim Ferriss' stories where he just figured out how he could win some sort of a competition that was just random so that he could be a world champion. Very cool.

You mentioned the property management industry and something about it got you excited which either says you're crazy or you see something maybe similar to me. What potential do you see the industry is having? In the US, I feel like it's underperforming in its potential. People just don't see it, awareness is low, perception is low. What's your perception of what the potential is for the property management industry as a whole?

Dana: I think it's two things. It falls into two buckets of the potential. The first one really has to do with real estate investing in general. This happened to me when I was at Apple. Most people when you ask them, "How did you get into real estate investing?" it's usually, "Oh, someone told me. I have friend who is doing it and doing it successfully." All of these companies out there where they have these employees who have great savings and could be allocating money into real estate, they're literally going into stocks, bonds, and other things. It's sad.

The biggest thing with property management was that's a biggest pain point. When I look at buying properties here in San Francisco, it didn't make sense. The numbers just didn't make sense for investment at that time. Maybe things changed. Some people want the appreciation gain that they'll invest in San Francisco, but it's really investing out of state. That’s the biggest thing is property management. I quite frankly think buying the property is the easy part of it. You put the numbers on spreadsheets, you're not emotional, you go and you purchase a property. There's not too much rocket science to that part.

Where it really comes down to the success of your investment is in the property management. It's the most difficult part to be in and it's the one that you're stuck with for 20-25 years. Buying the property, it takes you maybe a year, depending on how long you're looking. Some people buy within their first month. The property management in actually being able to make sure you have that stable, steady, cash flow, is the most difficult part of it. There's no focus on it, I think, because it's the most difficult that people push it off. One of my biggest frustrations with property management is people thinking like, "Oh, maintenance is going to be so easy." That kind of stuff is really difficult to do.

I always think of property managers as Jacks of all trades. They have to be good sales people. They have to be good at marketing. They have to be a lawyer because they have to know these lease contracts. They have to be a maintenance person because they have to know how to troubleshoot, push back on service professionals, and understand, "Am I getting screwed over or not?" They have to be a therapist because tenants get emotional because it's their home.

One of the things I've always been driven towards this challenge, if something's not challenging and they get easy, I usually just leave the job. It's just boring. Then it’s just a nine-to-five. I think in property management it's not that. Something new happens every single day and you're constantly saying, "How do I take that and mitigate that risk?" That's really where I do think that there's just so much value to it. There's, quite frankly, not a lot of focus on it. That's where, Jason, this show's incredible because you actually bringing those people to talk about how do you mitigate that risk, how do you set it up for success, et cetera. I believe it has to be a subject matter expert that do it. There are certain things that technology can do to just say here's the best practice in place and process.

Then, you also have to have the people component because you still have to talk to people. You still need someone physically there. The worst thing, I think, is when they talk about these robots showing the properties and stuff. Some people love it. I don't think the industry is there yet, go and show some of these properties. I don't think the industry is quite there for some of these stuff. That's just my own personal opinion from dealing with them, being hands on, showing properties, and doing all of these stuff. Inspections, move ins, move outs, maintenance coordination. It still needs that human component and it’s much better to say, “Here are the subject matter experts that do it,” versus every single person trying to do it. As you know, that happens with single family homes but still the majority doing the self-management themselves.

Jason: Yes. I love what you said. Buying is easy, managing the property, hard. It's really simple. That's so true. When you get into real estate investing, they're hoping that they’ve got some turnkey magical easy thing, money is just going to be flowing in, and then they have to manage the property. That reality sets in. I think that's good pointing it out.

Property management is the most difficult part. The other thing you pointed out is that property managers, these entrepreneurs are highly adaptable creatures. You call them Jacks of all trades or Jills of all trades. They're highly adaptable creatures as entrepreneurs. I think that's why I get excited about them because they're my type of people.

What's interesting is some people maybe call entrepreneurs gluttons for punishment, but I think we love challenges. Just like I've said in the intro, we love unique challenges. I think that really we would be bored without challenges. We would [...] entrepreneurs. We want to be tested. We want to have some challenges to work on. I think the trick is finding the challenges we enjoy working on versus the ones that are kind of thrown into us that we don't want to be dealing with. There's a difference but I love that as well.

I think the industry as a whole has a massive potential. You mentioned, the first one is real estate investing, that they need property management. What was the second thing?

Dana: The second one, the challenges associated with it is just property management in general is such an afterthought of it. The first is real estate investing and thinking of it as stocks and bonds where you can purchase a property anywhere. But I tell people you shouldn't purchase in your backyard just so you can self manage it. You should be looking elsewhere. It's not like I say, "Okay, my neighbor rent this small little company and that's the only one I can do best in." When I'm looking at stocks, I'm like, “What stocks out there across the world should I invest in that's going to give me what I think is best return, diversification, and things like that?” It's the same with property management. The first is just that investing outside the area, but then the second is property management like you said.

I think turnkey is actually a horrible word for that because when people say turnkey, it makes you think you don't have to do anything at all. It's going to be easy. The problem is that when something goes wrong, the property manager is first to get blamed. The first to get blamed. They actually don't even get credit because the word turnkey makes you think, "Oh, I'm going to get this casual." The turnkey companies put it like, "Hey, you're going to get this straight number, this is what you're going to get, and there aren't going to be any problems." What happens is you think you're going to be at the top of that and everything is going to go right. When something goes wrong, it's the property manager who gets blamed which we know there are women, tenants, out there, a bunch of different things. Those challenges and mitigating those are really that second component of it.

Jason: Okay. Now, let's get into Hemlane a little bit here. Property management business owners have a lot of different pain points, challenges, and problems. There's a lot of pain points and challenges that owners, tenants, and everybody are dealing with. Businesses only exists, technically, to solve a problem. If a business exists that is not solving a problem, then it's just stealing money. Let's get into the problem that Hemlane helps solve. Tell us about the problem. I think this will help people transition into helping them understand Hemlane and what you guys do.

Dana: Hemlane is a flexible and transparent property management platform. What I mean by platform is that we have software. Software, if you think of Buildium or AppFolio but for the smaller guy, not for 500+ units. It's got the software built into it where it automates things and sends reminders on what you need to do next, and it walks you through a risk-mitigated process. For example, people say, "Why don't you integrate PayPal? Why can't I pay with PayPal on Hemlane?" That's not a good process because tenants can dispute that. We're not going to flip that in there.

Building the best practices in place, it's got the software. The second component of it is really saying that, “Hey, most of our clients are people who own rental properties and they don't locally.” What do they want help with? A lot of them are trying to self-manage or they're illegally using handymen to show the property and trying to haphazardly put together a process which we see a lot of the market doing especially the tail end of it. They usually do it with these B-class properties where it's not that they're having to deal with the Section 8 or much lower income, but they're saying, "Oh, I can probably manage this remotely myself."

We actually come in and say, "No, if you want someone to show your property, they have to be licensed here, or managers we worked within that area, or real estate agents. They can show your property for you." That's why we call it a platform because we're not a brokerage. We're not trying to take clients from anyone. We're just looking to connect to them.

There's basically two packages. Property managers and real estate agents use our software-only package because they don't really need us help connect them or do maintenance coordination. Owners will use the upgraded package, so owners of rental properties, and they'll say, "Hey, I still want to control my rent, have rent go to me but I want to pay someone a full leasing fee for them to do the leasing." Whatever it is, we don't get involved in that price negotiation. We just set them up with someone local who can provide those services for them.

We have partnered with property managers and real estate agents across the nation based on where portfolios are or where the needs are. We're in all 50 states but our actual agents and managers are only in some of the major cities. We focus on certain cities. Then, what happens is when we have a real estate investor come to us, whether they purchased, they're in some group, whether they just come to us and find us online, we say, “Great. Here are the managers in the area, get on a call with them, and see what you want them to do. Whatever you want them to do, they'll just charge you for their services in the system.”

It is in full service. Sometimes it does get to full service. Sometimes they just ask the manager to take over their account in our systems. It downgrades to the software-only package and then managers charges them a whole management fee. A lot of our owners are more in that category of, "Hey, we used to do it ourselves and we're looking for something else." They really fall into that do-it-yourself, that 70% category, and we're trying to push them into saying, "Hey, there are other things out there that are much more efficient than you trying to spend your time on doing your own property management."

Jason: Let's make this super clear. For those that are listening, that have property management businesses, they're property management entrepreneurs, who's your ideal prospect when it comes to them? Help them self-identify if somebody that should be reaching out to Hemlane.

Dana: Yeah. Great question. From that perspective, it's typically someone who has under 200 units, they're looking to grow their portfolio, and they're also open to doing a combination of multiple things for clients to expand their clientele. What I mean by expand their clientele is saying, “Hey, I'm going to offer a full service is one option and I'm going to offer some unbundled service as well, say, listing only, maintenance only, whatever it is.” When a customer comes to you, it's not saying, "I charged 10% on this. You don't want that, don't work with me." It's saying, "Hey, what do you want? What do you want me to do? Here's what I'll do. Here's what our contract says." Then, you can do everything yourself.

They can jump on our platform. They don't even have to be using our software to actually get access to owners. They can create an agent manager profile for free. If we do connect them with people, we do have requirements and property management questions that we ask them to make sure that they're qualified, reference checks, things like that. Usually, it's for the smaller manager that doesn't have enough referrals yet, who's just starting out, saying, "How do I get an advantage in my market? I’m new, I'm a hustler, kind of crazy, in that sense of doing property management. I'm working around the clock, I know myself, but I'm just right now starting to grow my portfolio."

In property management, there's only two ways to grow your portfolio. Starve yourself, do it slowly, and go door by door, or acquire brokerage. I have a tons of friends who just acquire property management brokerages. They just run on them, but they have capital. A lot of people don't have that capital. So, if you don’t and you're going door-to-door because your parents didn't hand down their property management business to you—doesn't happen a lot of the time—if you only have 10 doors and you're saying, "How do I get to 20?" working and partnering with companies like Hemlane makes a ton of sense to get you out there, your name out there, more referrals, et cetera.

Jason: Love it. I know that we have quite a few that are under 200 doors who are listening. The fact that this could help them generate some more leads creates some more relationships and drum up some more businesses, I think is enticing.

Let's focus just on the growth aspect. How does Hemlane help somebody, say they're stuck in that first sand trap, they've got 50 or 60 units under management, they're solopreneur, or maybe they just finally broken past and they wanted to get into that next level, which is that 200–400 door range I called the second sandtrap. How is Hemlane going to help them build up their book of business?

Dana: There's two things. One is automation and stuff like that. Anything technology can do better that is administrative, we take off of you. Everything from a tenant just said that I’m interested in a showing and just reached out to you on Zillow, you shouldn't be manually responding to that. You should already have your calendar. You should already have your qualifications of what minimums they have, criteria to qualify. That showing calendar needs to be sent right out to them at that second. They can respond. If they don't, you can give them a personalized call. Everything from automation, so you're not focused on that and you're focused on sales and marketing of your property management business, which is the most important thing to grow at. That's number one.

Number two is saying, why don't you give yourself a competitive advantage against everyone else by saying, "Hey, you know what? Everyone else has this 10% model." A lot of times these people who've been self-managing and they are saying, "Hey, I want a property manager," taking them from going to 0%–10% takes a while over time for them to do that, because they have to build trust in you, they've never worked with you. Starting them and saying, "Hey, let me just do your leasing for you. Let me just do your leasing. You can manage everything else on Hemlane." The next year, coming back and saying, "Hey, do you want me to take over this from you as well?" Letting them ease into it, it's like when you give a price. A lot of companies do 30 days free or you get those [...] and open door things. They're like, two-for-one. You try things at a low barrier to entry. Then, you're liking it, you're hooked, and you're connected to this person. Then you're like, "Hey, I trust this person. Now they can have more of my business."

I think a lot of it is like, that doesn't happen today in the industry. The industry is just saying, "It's all or none." You're getting the same price quote from every property manager and you don't want to cut your prices. You don't want to say, "I'll give you everything at a lower price." You don't want a discount because then, there's quality problems there. Or when you say, "Hey, maybe I'll just takeover this little part from you." [...] with that and then, that's your biggest pain point. "Let me solve that. Now, let me solve your other ones."

From that perspective, Hemlane can really help you set that up to provide your clients, new clients, and clients across the nation who may just be even looking in your area. With some sort of competitive advantage that you have, when you're trying to get new doors until you get more of them quickly, and then build those relationships and build that deal value on customer size, over time.

Jason: Hemlane would also help expose this small business to investors in other markets and other areas?

Dana: Yeah. They usually come to us. The investor will come to us and say, "Hey, I'm interested in this plus this." Usually, investors will come just across the nation and say, "Hey, I'm in Kansas City and I want to put my properties on Hemlane." We go, "Great! Sign-up and try us for free." Then we say, "What do you need?" They're like, "Oh, I need some advertising tools." "Great! We can provide that to you. Do you need someone to show your properties?" "No, I don't think I do." "Okay, when's your next turnover?" "In two months." "Great. We'll follow up then. Do you need someone to show you your property?" "Yeah. Actually my husband and I are going to Europe, things changed." "Great. Here's someone who can help with your leasing."

From that perspective, it's capturing people at the right time because timing is everything. If you can just get your foot in the door, it makes a lot of sense. For us, because we're nationwide, we're a platform, people come in. Where our managers and agents are is where we focus on upselling them, connecting them with local professionals.

Jason: Property management listings that maybe haven't heard of Hemlane, they were probably naturally inquiring or wondering how are these investors find out about Hemlane?

Dana: There's a ton of places that they find out about us. The biggest ones that we actually find are actually in social media. Most of these real estate investors, I think, we have one of the best algorithms in place from this person we use from marketing. It is really social because a lot of them aren’t searching for property management software. They just don't search for that. They don't search for [...] software. A lot of it is on social. Whatever algorithms is being used is working for that. That's been huge for us.

For example in the US, the top rated on Software Advice, if you look at their top products, you'll see us at the top for software solutions. They'll find us on Software Advice. They’ll find us on Capterra. They’ll find us on GetApp. The other thing is blogs and content. I write a ton of content on like, "Why is Venmo the worst way to collect rent?" "What do you need that's concrete in your lease?"

A lot of times, when they're searching for something, they're not searching for a software or a manager. They're saying, "I have a problem and I need it fixed." They're searching that term. You can give them the solution in a blog post and say, "Here's some ways to get connected locally with folks in your area who do property management." A lot of times, I just set them up for a coffee. I just say, "Hey, so and so meet so and so for a coffee. I know you're self-managing, but it would be a great way for you guys just to connect locally in your city in case things change, in case your mind changes." That's a great way to start building those relationships without being too salesy. Those people come back to you and they do remember you, especially if you made that impression and you meet them for a quick coffee.

Jason: You guys are pulling in traffic from Capterra, GetApp software sites, blogging all these. You got traffic coming in. For the property manager, what is the buy-in or what's the requirement for them to start working with you? Financially, what does this typically cost for them to get onboard? How much work does this take? What's your vetting process? How can those listing self-qualify to become part of the Hemlane network?

Dana: Great question. In every area, we actually personally get on a call with you to understand you because if we're going to refer you out, we actually think of you more as a partner versus you created a profile. If we are going to refer you out, you actually do need to do some interviews with our team knowing who you are, asking questions, prequalifying. The minimum we've taken is someone who's done 10 doors. As long as you have 10 doors, even if they're your own doors or something like that and you're just starting your own property management, we need, as a prerequisite, that you have some experience [...] seen in property management because we're not [...] to that. Then, we ask you questions of what would you do in this situation, understanding how well do you really know property management in leasing and complex situations. We'll walk through those situations with you. The third and final thing is reference checks. We do some reference checks on you.

There's two things in each area. The first is if you're using our software already, we obviously would refer people to you first before we refer it to someone who's not using our software because we don't take a cut. We don't believe in taking cuts of however how much you make so when you charge an owner for something, we don't take a cut of that. You get 100% of it. That's really important to us because we never want anyone to think, "Hey, we're working with this person because they give us 20% of their income." We don't care. That's yours. We make our money off of our software and our platform. The connections help make our software much more differentiated than others. We don't take a cut of anything that you made. That's really important to note. You build your own business, we build ours, we have the tools to help you with that. If you are using our software, we'll put you higher range assuming you fit our qualifications. Then, someone who's not using our software but just free on our program that just says, “Hey, I'm in this region.” In a lot of cities, we don't have anyone, any partner in that city. There's no one using our software that's good enough, that's qualified. Even if you're not using our software, we'll still refer you out just because we want to make sure those people are happy. That's the first things with it.

What's even more important to ask to keep the business and keep traction going is asking reviews. When we refer owners out to you, we actually ask them for their opinions on you after working with you the first time. You might have done something really small for them by just saying, "Hey, let me do an annual inspection and drop by your property, you haven't been there," or we ask the owner, "How was it? What reports did they give you? This and that," because we want to make sure that you are trained and qualified.

There's a ton of people out there pretending to be property managers who's like, "Gosh, if I have my property in their hands, this is a lawsuit waiting to happen." We found it's quality not quantity. It's the quality of the individuals we work with. In each city, we don't need 500 managers on our platform. "We have everyone on here." All we need is the top. The people who say they pick up their calls, they respond to emails, you don't need three weeks to respond to an owner, and they're fair with the owners. They set these owners up or the owners like, "Thank goodness I have this person on my team." They went in and did an annual inspection and saw leashes hanging and dog holes, but they're not supposed to have pets in the place. That takes us [...].

That's really where I do think the value comes in. It's really asking for reviews on that as well. You can even set it up if you use our maintenance coordination where you get reviews on how you did on maintenance coordination, how well your service professionals did. "I think, Dana's really big there," to understand how are people doing and performing because you can't do everything yourself. For us, it’s the same thing of how are our local agents performing. Sometimes we have to kick people off and say, “You know what? They're not exactly who we want our reputation to be surrounded with.” That's why it's just important if you don't have any leasing or management experience, you do need to go out and get some. We won't take someone who's a newbie and try to train them via meetings.

Jason: This sounds like something ideal for probably most of our clients to get onboard with. If nothing else, you have that listing and be one of the boots-on-the-ground partners that you guys have in your database.

Dana: Yeah. We would love for our team to interview you, have a call with you, and stuff like that. Like I said, it doesn't take too much time and adds free value. We don't ask you for marketing dollars. We have those inbound coming in already for our marketing. From that perspective, we'll just work directly with you and we won't take a cut. From our perspective, we’re not trying to make money off of you, we’re just trying to create a much more valuable community.

Jason: We probably should have started the show saying, “If you’re a good property manager, Dana’s going to send you leads. She’s just going to send you some free business and you don’t have to pay for it,” and we probably could have just ended it right there and give in a link, and you probably would have gotten a few phone calls.

Dana: That sounds good, yup.

Jason: Okay, cool. What else should those listening know about Hemlane that we haven’t covered already? What are some of the most common questions that you’re feeling may be from the property management side?

Dana: On the property management side, it’s really interesting. One of the things that we get most often image is with owners. When people come to us with owners of, “Hey, I’ve got too much going on, I can’t do it all, I’m stressed, I’m working around the clock, I can’t grow my doors, these owners are upset, blah, blah, blah…” One of the biggest things that I see is communication. When things go wrong, it’s usually because the owner wants to have communication and we see it on our side. When owners come to us, we say, “Why are you signing up for Hemlane?”

Because I want some transparency in communication and for property managers to know that we have it in the solution wherein you can add your owners and decide what they get an access to. But you can also decide they get access to all of it but they don’t get notifications. Once the request is opened, they don’t get notifications on that but they just get a summary email once a week, once a month, depending on what you have set up.

I think from the perspective of Hemlane, one of the things that we see as really valuable and the solution is having that communication. You’re not having to field 500 calls from owners everyday saying, “How many leads did I get today? How many showings did you do for my property this week?” All of that is in the system for your owner to just view and look at, and having that data and having that transparency to them it’s like, “Wow, you’re on top of what you’re doing,” and that makes them feel good.

When they see an email it’s like, “We got 20 leads and 10 of them showed up for showings, and three of them completed an application,” and they go, “Okay, things are moving along.” So even if your day is back-to-back, you’re running around and you got some fire drill with plumbers, some tenants who wants to move out tomorrow, and all these other stuff going on, at least that technology is working for you. It’s one of the biggest things that we see that is really valuable on the software side.

Other questions that we get from property managers is, “Well, what about if you’re going to take clients, and clients are just going to use you and not use me, and this and that?” We’ve never seen that happen. If you’re a good property manager which are the ones on our platform, that doesn’t happen.

There are two types of owners. There is that 30% in the single family homes than Jason is talking about, who say, “I’m handing you the keys, I don’t want to hear about the property, take it and go with it,” and it changes based on different life events, especially when people have kids for some reason, that’s when they’re like, “Please take my properties now. I’ve got something worse than properties, I’ve got children. I’ve got something worse than properties, I can’t deal with them.” There’s these life events that happen that can signal, “Maybe I should check in with them and see if they want more full service.”

For us, what we find is people really fall into different categories and they spiral into that. There are people who would say, “Take everything, I’m willing to pay for it, do everything for me, and send me my owner distribution.” There are other people in the system who want to be so hands on that quite frankly trying to do full service management with them is a nightmare.

Jason, I love that you tell people to say “no” to clients. I think more property managers just need to do that, to fire clients, because they’re so hands on, they want to do everything. It’s double the work for you, then they get involved in things they shouldn’t, they mess up things, and it’s just way more for you.

That’s another thing from Hemlane and what we offer and what people come to us for, what property managers ask us about is, “Hey, would you ever take our client?” we say, “No, we’re a platform.” People can use us but they sought just physically do the work and there’s still physical stuff to be done.

The big question is, “Do they want you to do it, or do they want to do it themselves?” It’s based on life events and based on their personal preferences of whether they are going to do full service, whether they are going to do some hybrid, or whether they’re going to do everything themselves. I think that’s also another question that sometimes we get from managers and we just never seen that, we’ve never seen someone coming to us and say, “My property manager uses your software. Now we’d like to use it.” It’s not that, because that person doesn’t want to do it, right?

Jason: Yeah. There’s a reason. Nobody generally wants to go from somebody’s taking care of something to I think I’d just be fun to start doing this on my own, when it comes to property management.

Dana: Yeah, that’s true. The reverse definitely happens, and it happens in increments because they’re like, “I want someone to help me but I’m not quite sure, I don’t know if I trust this person, I’ve never worked with them.” So, it goes in increment. The only time they see someone who doesn’t work with their property manager, who isn’t someone on Hemlane but elsewhere is when something goes wrong or when they haven’t been communicated to, which honestly, if you have a really good process in place, you’re communicating with your owners everyday, you’re writing them mail, and they don’t have surprises, they shouldn’t have that.

On our system, we have it set up wherein the property managers can just tell the owners on day two, “Here are your tenants who haven’t paid rent, we’re following up with them, but just as heads up, they haven’t paid rent, so we want to give you a forewarning,” so that when you call them on day six and tell them, “We’re serving a three-day notice,” they’re not saying, “Oh wait, now this is a surprise. I thought I was getting the money.” I think communication is really, really important there.

Jason: Yes, you’re talking about this. A lot of times, property managers are just hoping for somebody to just get married to them like, “Let’s just get married, without the dating,” and I think people aren’t really buying property management. They don’t want just property management. What they really want is safety and certainty. That’s what they’re hoping to buy. People don’t buy property management, they’re buying trust in you as a property manager and asking somebody to turnover the keys and give you everything, for some, is just too big of a risk.

I love the idea of they’re being some sort of stepping stone in leading into this safety and certainty. How much safety and certainty do they have initially? It’s pretty low and if they can just hand you a little bit or a piece of this, then it would be very easy to transition them.

A major component of business is retention and upsell. If you can retain them and you can upsell to them, then you’re significantly increasing lifetime value and you have this funnel of people coming into this pipeline that you can build a relationship with over time and you can get them into something bigger.

Russell Brunson, this crazy marketer that some are saying, got this concept that I’m sure he got from somewhere else called the Value Ladder. The idea of the Value Ladder is that you need these different price points that get marginally larger that you start people with, You don’t really want to start people with a really big, high-ticket item. You usually need to start with something small initially, which usually the very beginning is something free, like offering something of free value, or free content, or free information and then it incrementally builds. This gives property managers a little bit more of a Value Ladder to step people and seduce people or convince people into full management.

Dana: Yeah exactly. I think you’re spot on there, Jason, in the sense of life events change where people upsells do happen. But you rarely see people say, “I’m going for full service with someone I trust” to “Now, I’m managing myself.” Once they have already committed, they’re done. The only time that happens is if you dropped the ball and what’s important for you is to have the software, have the communication, have the processes, have the team in place, build your team in order to do that.

You’re right. A lot of times, I see it with property managers and I see they have a call and the owner says, “Hey, I’m looking for a property manager,” and they go, “Okay great. Well here’s all the services that we offer, we’re end-to-end, we charge one month’s rent for leasing, we charge 10% of [00:43.46] for monthly rent to do everything, and we’ll take the keys. When is the good time for me to meet you at the property to see at?” and the owner’s like, “Woah, woah, woah.”

Instead, you should [...] the conversation about, “Great, thanks so much for reaching out to me. What can I help you with? What’s the one thing that you hate with your property management? Is it maintenance? Is it doing your showings? What’s the one thing that just drives you insane that you want to do?” That will change your game and differentiate you because they’re giving that same exact price quote, that same exact spiel from everyone, and it doesn’t differentiate you from that perspective.

Jason: Going back to that analogy of marriage and dating, a lot of property managers are like, “Hey, you might need some help with your property?” is the equivalent of saying, “Yeah, I might be interested in, maybe, connecting with you.” “Great, I’ll be moving in tomorrow, like, we’re together.”

Dana: Yup. All the way like, “Here’s my contract, sign it. It’s annual, there’s no free trial, and there’s a huge termination clause.” For an owner, it’s like, “I haven’t actually, physically worked with you.” It’s like hiring an employee. If you worked with someone in the past, you’re like, “Okay, I’m ready to go,” but if you haven’t worked with them, you’re like, “I need to do these interviews, I need to do these background checks, I need to do these,” and you’re like, “I’m not even quite sure if they’re going to work out.” There’s this much larger barrier. As much as you can, avoid and take down that barrier really will help your business.

Also, it goes the other way. You’re dating now but sometimes you want to tell the client after doing just the leasing for them, “I’m so glad you’re taking over the management,” and then they reach back out to you to do the leasing next time and you’re like, “I would love to do the leasing for you but I’m completely booked,” because they were a freaking nightmare to deal with. I never want to deal with them again.

Jason: “Please call our competitors down the street. They would love to help you, we’re a bit overwhelmed right now.”

Dana: All of the competitors think. I think the dating goes both ways because one of the things, Jason, I love about your show what you’ve said time and time again is, a lot of these people who are really stressed in property management, it’s because they have 10% of their clients or 150% of the time they’ve spent of overworked, overwhelmed on these properties and you probably shouldn’t be doing those ones. So. I think the dating goes both ways.

Jason: Yeah. I tell clients all the time that sales and deals and contracts happen at the speed of trust and it’s that simple. I love that with using Hemlane, based on what you’re saying, what this allows you to do is to start that relationship with trust. Once you build that, it becomes very easy to upsell or to get them into a more committed relationship with you of doing more stuff with you once you earned that. Once you earned that, if there’s anything that they’ll need, they’ll be happy to use you to do that and you then have more opportunities. That’s all property management entrepreneurs need is more opportunities to build trust and the more opportunities they have, the better. It sounds like Hemlane is another channel or possibility for them to do that, that they may not have considered before.

Dana: Absolutely. Great way to market from that perspective.

Jason: Dana, it’s been awesome having you here on the show. How can people get in touch with Hemlane? How can these property managers that are listening get started with you guys? How do they sign up?

Dana: If you’re interested in our partnership program, we don’t do just regular sign ups through our partnership page. Instead of going there, you can just email me, dana@hemlane.com. I’ll send that out to our partnership team. Brad will give you a call, schedule, and find some time to go through things with you. That’s for the partnership.

You can also go to www.hemlane.com and from there you can click the try us for free. You can watch our videos and see what we offer as well, features everything in there, so you can see that as well if you’re interested in using our services. If you just have some questions on property management in general and you’re in this rut or whatever and you think there is some way that potentially we can get you out of that, we’re really happy to hear about that, too, but the fastest thing to do is email me dana@hemlane.com because I’m always on my email.

Jason: Cool. Maybe this is the last question so, what is a hemlane? Where does the name Hemlane come from?

Dana: Great question. We wanted something that had an international feel to it. We wanted something that was easy to say, easy to pronounce. DoorGrow, really easy to say, really easy to pronounce, two syllables. We wanted something that didn’t have any branding behind it. When we looked international, we basically took multiple languages for the word ‘home,’ and we went through and looked at ‘home’ in multiple different languages.

Hem is house in Swedish, and then Lane is a path that divides others from other people. When you think of a path, you’re always looking to get ahead of others and differentiate. So, we put how it’s differentiation from that perspective together. We wanted to make sure that we didn’t have rental in it, or something that didn’t really have its own branding around it.

What was funny is when we started Hemlane, it sounded like a horrible pair of cut-off pants like hemline, and everyone I would go to is like, “Do you have a clothing company?” and I was like, “No, it’s not a clothing company. It’s like the opposite.” Now, when you look up, Hemlane it’s all Hemlane, it’s all property management, but before that, it was a lot of just really bad pictures of people’s cut-off pants, hemlines, and stuff like that beforehand.

Jason: Good. I love branding, so I love hearing about how people come up with the name and I love that there’s this meaning behind this, so it’s interesting. Well Dana, it’s been a delight having you here on the show, always fun to hangout with like-minded business people and entrepreneurs. I love that you’re helping the industry, you’re helping growth. I think this is a great fit to have you here on the show and I’m excited to see what success you guys create.

Dana: Great. Thank you so much, Jason, for having me on the show. I love your show and I love the content that you have.

Jason: I appreciate that. Cool. We’ll let you go. It’s really great having Dana on, so if you are a property management entrepreneur that wants to have doors, then maybe check out Hemlane, sounds like interesting channel for growth. If you’re struggling, you want to optimize your business, optimize your warm lead funnel, you’re tired of playing the game of SEO, pay-per-click, content marketing, social media marketing, paper lead services, it’s not working, you’re spending a lot of money, and you’re not getting the return on all that money, then you’re probably worse off than if you just not done the marketing in the first place. Those are the people that we would love to help. Reach out to us at DoorGrow and we might just blow your mind, and help you figure out how to target that 70% and grow your business.

I had a really cool morning call this morning with Regis [...] one of our clients. I haven’t really connected much with him over the last year, but he dialed in our program, did what we said, and he had it over a hundred doors in just the last year, just by doing the stuff that I told him to do. All these success story were keep popping up and I probably should stay better connected but if you’re looking to add 100, 200 doors in the next year and you feel like growth, you’re losing more doors than you’re getting on right now due to the sell-off in the market, and you’re focused on cold lead advertising just trying to grow your business and it’s just not working, have a conversation with us at DoorGrow. We would love to help you out and our mission really is to transform this industry and help grow it. I believe this industry have massive potential to be as big as probably the entire real estate industry here in the US.

There are a lot of rental properties and we’ve only scratched the surface in terms of growth. I’m excited to see what happens here in the future, so reach out. If you are watching us on Youtube, or you’re watching this, make sure to like and subscribe. I want to build up our Youtube channel and get our first 1000 subscribers. We’ve got, I think a few hundred there right now but I’d love to get to that thousand-dollar market subscribers and you will see these episodes first. You’ll be the first to be notified when we put these episodes out. We release them to Youtube as videos before they show up on iTunes. If you’re hearing this on iTunes, make sure to go to Youtube and subscribe to our Youtube channel to youtube.com/doorgrow. You load it from your phone right now. Do it and click subscribe. You’ll even start getting some notifications from Youtube in your browser occasionally when we pop up a new video and you’ll be excited and able to hear some of the latest and greatest material connected to property management industry and the growth. That is all for today, until next time everybody to our mutual growth. Bye, everyone.

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DGS 82: Real Estate Revolution with Nat Kunes of AppFolio 0

Jun 11, 2019

Do you use AppFolio? Word on the street is that it’s one of the most intuitive and easiest platforms to use, especially in the property management business.

Today, I am talking to Nat Kunes. He’s the senior vice president of AppFolio, which is an all-in-one solution for property managers to grow their business and be more successful.

You’ll Learn...

[03:05] Shifts in technology solutions: AppFolio started as software as a service (SaaS), Web-based product and then added mobile ability to access anywhere.

[04:29] Fourth Industrial Revolution: Applying artificial intelligence (AI) to property management problems.

[05:18] AppFolio acquired Dynasty, which provides AI options for the real estate market. Digital employees lease properties, schedule maintenance, and perform other tasks.

[08:16] Decision-making behind-the-scenes at AppFolio:

Customer Input: Constant communication to identify core problems.
Market Trends: Leasing, occupancy, and construction rates to fill units.
Technology Shifts: Leverage leading-edge game changers to solve problems.

[10:56] Integrations: Growing awareness of APIs to choose different vendors and tools to create custom connections.

[12:51] AppFolio Property Manager PLUS Product: Geared toward larger property management firms.

[13:30] Future Feature Request: Integration with Zapier to connect to more tools, save time, and increase productivity.

[14:05] Employee Experiences: Meeting customer expectations and talent management by hiring and retaining great people is a challenge.

[16:08] Recent survey conducted with John Burns Consulting found that factors inhibiting growth include retention and talent shortage.

[17:57] Broader Benchmarking: What makes a good leasing agent? What makes a great maintenance technician? What is expected?

[18:42] Switching software to grow business and move forward: Partner with progressive company focused on future.

[20:43] Internally, AppFolio uses external tracking, HR, sales, and other software that offers insights and feedback to make better decisions.

Tweetables

Fourth Industrial Revolution: Applying AI to property management problems.

Future AppFolio Features: Decisions based on input from customers, market trends, and technology shifts.

The growing awareness of APIs integrations to choose tools to create custom connections.

Resources

AppFolio

AppFolio Acquires Advanced Artificial Intelligence Technology Provider

AppFolio Property Manager PLUS

John Burns Real Estate Consulting

Zapier

DoorGrow Website Score Quiz

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, 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, finally, we’ve got AppFolio here on the DoorGrow Show. I’m hanging out with Nat Kunes. I said your name correctly, I think.

Nat: Yup.

Jason: Awesome. Nat, welcome to the show. Really excited to have you here.

Nat: Thank you. So very excited to be here as well.

Jason: Cool. Nat, you are the senior vice president of AppFolio. Tell us a little bit about yourself. Give us a little background on you and then let’s get into the topic at hand.

Nat: Thanks for the introduction. I’ve been at AppFolio now for about 10 years, so pretty early on, in our company history, gotten to grow with the company as well. Our products are really geared around being that all-in-one solution for property managers. From everything that we wake up in the morning to do, it’s really to accomplish that one vision which is helping our property managers grow their businesses, be more successful, pretty much everything that sounds like you guys stand for as well. That’s why I’m really excited to be on the show with you.

Jason: Great. Glad to have you here. I was telling you right before the show, most of our clients use AppFolio. Word on the street is that it’s one of the most intuitive platforms to use, easiest, that says a lot about software. I mean, the number one challenge with software is adoption; getting people to just use the thing. Let’s be honest, that’s the number one challenge with software is just getting people to use it and it being easy to use. Kudos on that.

Nat, you’ve been with AppFolio for a decade now. That’s like a miniature lifetime. Tell us some of the changes you’ve seen while you’ve been there. I’m curious about that.

Nat: Yeah. Really, we’ve seen some major shifts in technology solutions over that time period. One of the things people are really fortunate in our timing when we started the company, we started out as a web-based product, so Software As A Service from day one. By being web-based, we’re able to offer really complete solution that people could access from anywhere. When we started selling AppFolio in the early days, what we’d find was people were oftentimes using either Excel or QuickBooks or maybe some old solution that was on a CD or a server in our closet.

Over time, what we saw was that technology shifting. We started web-based, quickly moved into mobile, knowing how important mobile was to our customers and their customers—the tenants, the residents of these different units, the property owners as well—and all that communication, it needs to happen. We drew a line in the sand and said, “Hey, anything that you do on your computer, you should be able to do on your mobile device.” That was kind of a different take when we first started down that path. Because originally, people were coming out with apps that would do just like one little maintenance thing here or one little big sync thing there and we said, “Really, everything needs to work on a mobile device.” That was kind of the first major shift just since we started AppFolio.

The second major shift just happened in the last couple of years and you’re seeing us invest a lot in it. It’s really what we’re calling kind of the Fourth Industrial Revolution. It’s tied to artificial intelligence. What we’re doing now is applying artificial intelligence technology to property management problems. Doing things like having opportunities to create digital employees that help people do things like lease up properties faster, handle maintenance issues in a much faster fashion.

That’s kind of the new major shift that we’re seeing in the industry. Over the last decade, we’ve kind of lived through a couple of these transitions. Our goal is always to be leading the charge on behalf of our clients to make sure that they always have the most modern property management software is available to them to help them grow their business faster.

Jason: We always hear this idea of AI. A lot of times when I’ve looked at different AI systems, it really, a lot of times, just looks like a really elaborate tree structure where they’ve just created a bunch of ‘if then’ statements and they call it AI. How is this actually coming into AppFolio? What are you guys doing to stay at the forefront and bring AI into your platform? Maybe give an example.

Nat: A great example, you guys might have seen, we made an acquisition earlier this year of a company called Dynasty. What Dynasty does is artificial intelligence for the leasing process. When you give out a phone number for someone to inquire about an available unit, what it’ll do is it will start a conversational AI experience with the tenant via text messages. It will have full on conversations talking about availability of the unit, pricing of the unit, setting up a time to show the unit as well.

You can imagine all the things behind the scenes that have to work for that to happen, it has to be able to have access to your leasing agents showing calendar, it has to interact with the prospective tenant, find times that work with them. It has to know full on availability of your units and then be able to book showings. Then follow-up with confirmations on these showings and then follow-up with, “How was your showing?”

What we found is, using artificial intelligence, we’re able to close people for showings at a much higher rate in humans alone and it takes away all the mundane tasks, as you can imagine, of just the back and forth of calendaring and all that time that kind of goes into that and lets your leasing agent really focus on what they do best which is closing the unit, getting that prospect in there, booking it as fast as possible so that you can focus on showing the unit and doing that.

That’s a great example. All of that’s done through conversational AI. If you talk to prospective residents, they really have no idea that they’re conversing with an AI device. They really believe that they’re talking with a human. That’s what makes it so effective in closing those showings, in getting those guys to actually show up on property. That’s a great example of it in action in.

I think that you’ll see that manifest itself in many different areas of the property management business. Think of all any mundane tasks that doesn’t really require your best staff to do. Booking a showing is just a calendar activity of back and forth. Imagine that in other areas of your business where you can apply your resources to higher priority projects that let you grow your business.

Jason: Maybe you could give listeners a little bit of insight behind the scenes there a t AppFolio since you’ve been there for so long. You’ve acquired Dynasty, you’re implementing this leasing conversational AI which sounds really cool, how do you guys go about deciding what is the next feature? How do you guys go about deciding internally? Maybe you could share a little bit what sort of the culture is. Because I think a lot of people see you as this big player in the market and I’d love to hear what goes on behind the scenes into the decision-making area.

Nat: We use a few different inputs in terms of how we decide what to focus on. First and foremost, we look at our customers and we say, “Okay. What are our customers desires? What problems are they trying to solve in their business?” We have constant communication and feedback loops with our customers. Our customers are very diverse. We have customers with sometimes 50 doors, and we have customers with tens of thousands of doors. They could span a lot. We have customers that focus on single families exclusively, some do multi-family, some do commercial units—it kind of crosses the gamut there of community associations as well. We’re constantly gathering input from our customers trying to identify, “Really, what are the core problems they’re trying to solve?” And then we take that back and say, “Okay, how can we apply technology solutions to solve that?” That’s kind of one layer.

The other layer we’re looking at is market trends. We’re trying to stay out in front of, “Okay, what’s leasing and occupancy rates look like this year? What does the macroeconomic market construction rates?” All that kind of stuff to try and stay ahead and say, “Okay. If it looks like, for instance, a lot of new construction is going to come out of the market, that’s going to flood a bunch of supply which means it’s going to be harder to fill those units.” Focusing on leasing experiences for our client thus can be critical for their success over the next couple of years. That’s kind of another layer.

The third layer we’d look at is major technology shifts that we believe would be kind of game changers in the market and we need to get ahead of on behalf of our customers. Like I mentioned, AI is a big one. That is really the big shift in technology solutions, we’re calling kind of that Fourth Industrial Revolution. We believe that will change the trajectory of software and how businesses operate just as much as mobile and the web did previously. We’re getting ahead of that for our customers and focusing on areas within our product that can leverage that technology to solve our customers’ problems in their businesses is yeah, their main input.

We take all those, amalgamate them up, and then that’s the focus of our teams. We have a lot of resources at our disposal to execute against that for our customers and deliver great products consistently to them.

Jason: One of the trends we noticed inside our DoorGrow club group and one of the trends that we’ve seen a lot of people pushing and asking for, is there seems to be this heightened awareness of APIs, integrations and being able to pick and choose different vendors and different tools. I’m curious, is that anywhere on the roadmap for this? I know you guys are doing some really innovative things with the AI but as far as allowing AppFolio customers to create connections to other tools and third-party tools, is that on the horizon at all for AppFolio?

Nat: Yeah. That’s a great question. What we take a look at when we look at APIs in general is, we really dive back to the problem that we’re trying to solve. We talk to our clients and say, “Okay, what’s the API being used for?” A good example of that in action is someone said, “I have this business intelligence database that I want to pipe my data out of and into, so I can do this custom queries or reports and it’s something for my investors or my owners that are unique to them and I want to do that.” Other examples that we’ve seen is, “Hey, I want to use a particular collections firm to do my tenant collections.”

What we do is we tend to look at those on individual basis, say, “How can we provide the best experience for that particular use case?” Instead of a generic API structure that doesn’t really work really well with a lot of different vendors and you can wind up with broken integrations and different things that you’ll hear complaints often about, we tend to focus on particular vendors that we can partner up with. Right now, we actually have hundreds of integrations with different vendors behind-the-scenes. Some of them are out there and we talk very proudly about them and partner up with them. Others are enabling our customers behind-the-scenes as well.

Late last year, we actually launched a new product that’s geared more towards larger property management firms called AppFolio Property Manager Plus. As part of that, one thing we heard from them is, “Hey, I need that data via an API to input in two things like my data warehouse and my business intelligence applications.” There is an actual API that comes with that product to do just that. On a case-by-case basis, we do look at those things. At this point, we’ve done that enough that we, like I said, hundreds of different integrations with different third parties. But that’s the approach that we take when we hear customers. We ask that, say, “What’s the problem we’re trying to solve and let’s figure out a way to solve it together.”

Jason: I’m going to throw a feature request because I’ve been asked by every property management software that comes on for this, because I think it’d be a game changer, but Zapier integration. I don’t think there’s any major property management software that’s come up with Zapier integration which will allow them to connect to lots and lots of different tools and resources. I’m throwing it out there. Maybe you guys will do it in the future. We’ll see. I think the first software that will do that is going to get a lot of attention because it really opens up to a lot of tools and it’s one integration.

Nat: Yeah.

Jason: Alright, cool. Let’s talk about this idea of your employees’ experiences outside of just meeting customer expectations. You would this over and it’s just that many firms are still struggling to overcome the challenges with business growth and talent management. Let’s talk about that a little bit.

Nat: What we hear when we talk to our clients is one, we’ll say, “What’s the biggest challenge in your business?” A lot of times, it doesn’t actually necessarily boil down to software or technology or things like that. It’s the people element of business. Hiring and retaining great people in the businesses is a struggle, it’s a challenge. There are definitely talent shortages in some key areas, amongst them, maintenance and some of the other areas of the business.

What we’ve been able to find through our technology is two-fold. One is helping you do more with the team that you have. That’s a great way to solve talent shortages. As I mentioned that leasing situation, if I have five leasing agents then I can add 100 more doors and still have five leasing agents, that’s huge. You don’t have to continue to find new people. The counter to that is retaining those people. One thing we pride ourselves, as you mentioned earlier on, is our software being extremely easy to use.

What benefit that gives our clients is a, the day-to-day work of the employees of the firm is much richer because it’s just easy. They’re not struggling with our software constantly day in and day out and complaining about that and causing them productivity loss. And then the other factor that comes into play there is when onboard a brand-new employee, you can train them so much faster. Because it’s so intuitive and easy to use, instead of handing them a big binder and saying, “Read this for two weeks and then maybe you could start using the software,” they can get in day one, start using, and be a productive, effective employee much faster.

Those are the areas that we really focus on to try and help our clients with that talent piece of the equation.

Jason: You’d sent this over and it says that you work with John Burns, a real estate consulting firm, and you discovered that four of the top five factors inhibiting growth were employee related. What were these five factors? Do you have that?

Nat: One thing we should do is perhaps we could actually share out the report with you guys and include that at the end. Because it’s a lot to go through the whole things right now but a lot of them were retention of existing employee, key talent shortages. It’s the ones that I’ve already hit on, add it up to the five. But there’s a lot more nuance detail behind each of the five. I think it behoove you guys to read through that report because it is actually extremely valuable as companies look to grow their business to read through that, because there are some good strategies in there, how to counter that, and how to continue to grow despite those five headwinds that might be against the business.

Jason: Yeah, we see that. I have the sand traps, at least that I’d call. We’ve got the solopreneur sand trap which is about 50-60 units and that’s where they’re trying to hire maybe their first team member and that’s a challenge to just offload anything or to get a team member on and retain them. The next sand trap is getting to that 200-400 door category. This is the team sand trap where they now have a team and they’re trying to figure out, “How do I keep good team members? How do I have A players instead of B players? How do I get people that aren’t just showing up for a paycheck, that want to go home at the end of the day and complain about me and the business and the job, and they live for the weekend?” I think that’s a big challenge. Property management is a tough business to be in. They deal with a lot of difficult things and so sometimes it is difficult to keep the team happy, positive, and motivated and not too stressed.

Nat: And benchmarking as well. It’s like, “What makes a good leasing agent? What makes a great maintenance technician? What makes being able to see what’s normal, what should be expected of them in a day-to-day basis, to being able to look broader?” That’s another key area. It’s like, “How do I know if I have a great leasing agent? If they’re turning a unit in 15 days, is that good, is that bad, is that short, is that long?” Being able to have that benchmark to compare against industry normal and then also geographic normal—all that kind of stuff—is critical as well to, like you said, building a great team and making them productive and effective.

Jason: Alright. Let’s take the listeners. Listeners are challenged with growth a lot of times. They’re dealing with team issues, they’re dealing with operational stuff, they’re usually pretty in bed with their software. If they’re with AppFolio, it’d be difficult to switch. If they’re with somebody else, it’d be difficult to switch. What ultimately do you think we should leave with the listeners as a takeaway from this for them to be able to grow their business and to move things forward?

Nat: The things that I always give guidance on is just make sure you’re partnered up with a company that’s looking to the future. You want a future-proof your business. You want to make sure that you’re keeping that long-term view in mind when you choose software solutions. You may have some short-term pains, I’d say, it’s hard to find a software solution anywhere, in any business, in any market that sounds 100% of everything you want. But to make sure that you’re partnering up with a company that you feel is like-minded, that’s progressive, that’s constantly pushing forward towards new things. Like what I talked about AI, if you believe that AI is the future as well, then you want to partner up with a company that is investing in that space, that can provide solutions there. That kind of like-mindedness I think is one of the most important things that I say that can enable growth.

We see a lot of our customers are able to grow their business because they invested in solid technology early on. That would be one thing that I would say as a key takeaway. I’d say that even at AppFolio, we offer software solutions from other companies and that’s what we look for when we buy software to help us run our businesses. “Who’s going to be with us in 10 years? Who’s going to be in it for the long haul?” Switching software every year is extremely painful and it can set your business back. You want to make sure that when you do that, that you’re really investing for the future.

Jason: That brings up a really curious question. If you’re a software company, what software tools do you use internally? I’m sure listeners will be a little bit curious that.

Nat: We use lots of different software. We use a lot of software to help us make better decisions as a business. We’ll use things within the product to serve up insights so we can see, “Oh, hey. People are spending X amount of time on this page.” Or, “People are clicking on this a lot. Why is that?” It helps us serve up insights that we can then talk to customers and say, “Hey, I notice when you’re looking at residence, you always click this one link. Is that because it’s not as easy to get there as it could be?” Helping us make the product easier to use. We use a lot of tracking tools like that to try to make better decisions within the product.

We’ve use lots of product that’s on the market. We’ve used a few over the years that do that. We’ll have those types of things. We’ll have tools that help us gather feedback. We are constantly gathering feedback from our customers, actual verbatims, and they’ll see that borrow sometime and show up at the bottom of the screen that says, “Hey, would you recommend us to a friend or colleague? What do you think about AppFolio? Help us make it better.” Anytime we roll out new features, we have software that lets them click and provide direct feedback and say, “Hey, I would change this. I would change that.” We’ll iterate on that.

Then we have obviously lots of backend software just like any company of decent size. We have companies to help us manage payroll, and HR, sales, all those kinds of things as well. But those are kind of generic company products as well. A lot of what we invest in is technology to make our products better and provide more value to our clients.

Jason: Alright. Well, I appreciate you coming on the show here, Nat. This was interesting. How can people get in touch with AppFolio? What’s the easiest way?

Nat: The best way is to contact your client services rep if you are a customer. They’ll always know exactly where to direct you to and help you get any help. If you’re looking at new features, functionality, you need training, whatever, we can help with that. For prospects or people that are interested in checking out our software, you can definitely go to appfolio.com, there’s a form right there, it gets routed right to one of our agents that can help you take a look at the software, take a deeper dive, learn more about the features, learn more about where we’re headed with it, a little bit about the AI stuff I talked about today, you can learn a lot through that as well. That would be the two main paths that I’d say if you’re a current customer versus someone who’s interested in checking out the software for the first time.

Jason: Cool. Nat, thanks for coming on the show. Glad to have AppFolio represented here on the DoorGrow Show. I wish you guys success in helping the industry.

Nat: Awesome. Thank you so much for having us. We’re happy to join anytime.

Jason: Alright. Thanks, Nat. Cool. For those of you that are watching, make sure you check our AppFolio. If you don’t have a property management software, it’s definitely on my list of the top ones to check out for sure. Take a look and check out AppFolio at appfolio.com.

If you are a property management entrepreneur that wants to add doors, you’re struggling, or maybe you just need a better website, or maybe you want a little bit of coaching, something related to growth, reach out to DoorGrow. Check us out at doorgrow.com, schedule with me or my team, and we will get you connected and help you move things forward. Make sure you join our community, connect to this podcast which is the DoorGrow Club. You can get to that by going to doorgrowclub.com.

If your website is more than two-three years old, it’s probably getting stale, it’s probably leaking money so go test it out, go to doorgrow.com/quiz, raid your website, check it out, and it’s going to give you a letter grade—like going back to elementary school, people. You’re going to get a grade on your website based on how effective it is at making you money and meeting your needs in terms of growing your business. Websites are not built to just please Google; they’re built to please people. If they please people, they make you a lot more money. Ultimately, that’s Google’s goal as well, to please people. That’s how they sell ads. Alright, everybody, check that out. Until next time, to our mutual growth.

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.

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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DGS 81: Building Your Business and Team with Melissa Prandi of PRANDI Property Management 0

Jun 4, 2019

Building your property management business and team can be challenging. As a business owner and entrepreneur, you are wired to fix problems. So, get out of the way, and hire people who have different skill sets to solve them.

Today, I am talking Melissa Prandi of PRANDI Property Management. Everybody in the National Association of Residential Property Managers (NARPM) knows her name. She helped establish it and has been in the property management business for 37 years.

You’ll Learn...

[03:13] Brand new baby, brand new company, but no bank loan.

[04:23] Beginning of NARPM and best practices for property management software.

[05:25] Solopreneur Sandtrap: Can only handle 50-60 doors before getting stuck.

[05:48] Team Sandtrap: Bottleneck of 200-400 doors when building a team, creating a culture, and systemizing processes become painful.

[06:33] How to build a team: Different personalities and skill sets.

[09:15] Success comes with your willingness to change.

[12:15] Good at growing the company and letting people grow or go.

[14:50] End-of-the-day (EOD) Report: Rate your day, workload, challenges.

[15:50] Working from home: Nobody can touch you; a physical disconnect.

[16:44] Modes of Communication: Basecamp, Voxer, and email. Analyze styles to know what tools to use.

[21:10] Entrepreneur’s Ego: Nobody can do it as good as me.

[24:57] It’s not always about business. Something’s going on. What can I do to help?

[28:42] Face-time and morning connections to catch awesomeness and say thanks.

[31:30] Making mistakes and ‘aha’ moments; what did you do/should have done?

[34:15] Be a student and fan of what works, and be willing to fail. Never stop learning; speak and teach. Share your knowledge because people soak it up.

[38:20] Keep yourself well to be a good leader. Health is #1 thing to impact productivity.

[44:40] Reach out and lean on others who have been through the same things.

Tweetables

Success comes with your willingness to change.

Be a student and fan of what works and be willing to fail.

To grow your business, you have to build a community. You can’t do everything.

Listening to chipmunks all day long telling you what needs to happen.

Resources

Melissa Prandi

PRANDI Property Management

NARPM

Tony Robbins: DiSC Personality Test

Basecamp

Voxer

Bluefishing: The Art of Making Things Happen by Steve Sims

EMDR Therapy