#DoorGrowShow - Property Management Growth

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

Transcript

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

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

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

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

Jo: Hi there.

Jason: Hi, welcome.

Jo: Thank you. Thanks for having me.

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

Jo: Correct.

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

Jo: Jo.

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

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

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

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

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

Jo: All the room.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jason: This is number two?

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

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

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

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

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

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

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

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

The training speaks for itself.

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

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

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

Jason: Shiny object syndrome.

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

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

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

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

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

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

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

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

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

Jo: I think some of them do.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jason: Right. Any relationship can be ended amicably.

Jo: Absolutely.

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

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

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

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

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

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

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

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

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

Jo: Thanks, Jason. Bye.

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

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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Nov 19, 2019

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

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

You’ll Learn...

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

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

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

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

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

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

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

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

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

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

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

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

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

Tweetables

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

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

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

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

Resources

Mark Dolfini on Facebook

Landlord Coach

The Time-Wealthy Investor 2.0

Marriott

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

Transcript

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

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

Jason: It’s our manifesto, I call it.

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

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

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

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

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

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

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

Mark: Exactly.

Jason: [...] winds. Always.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mark: Absolutely right. That’s exactly right.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mark: Absolutely.

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

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

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

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

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

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

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

Download this Episode

Nov 12, 2019

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

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

You’ll Learn...

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

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

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

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

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

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

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

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

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

Tweetables

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

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

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

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

Resources

Tenant Turner

James Barrett’s Email

National Association of Residential Property Managers (NARPM)

PlanOmatic

HomeJab

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

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

DGS 103: Growth via Propertyware with Inaas Arabi 0

Transcript

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

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

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

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

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

James: It was a great time.

Jason: It was a great time.

James: Dance floors everywhere.

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

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

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

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

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

James: We'll see.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jason: Okay, you said 250%?

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

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

Jason: Right. Yeah, makes sense.

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

Jason: More relevant.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

James: Exactly.

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

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

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

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

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

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

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

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

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

Jason: Rent it.

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

Jason: You can offload it.

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

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

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

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

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

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

James: Yeah, I agree.

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

James: That's right.

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

Jason: No, we’re not dancing together.

James: Good times.

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

James: I could be your wingman.

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

James: I got you covered.

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

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

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

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

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

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

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

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Nov 5, 2019

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

Today, I am talking to Inaas Arabi, Vice President (VP) of Single Family Rental and General Manager (GM) of Propertyware. He understands the importance of developing new and innovative ways to help property managers attain profitability and growth.

You’ll Learn...

[04:37] Past and Present Perception of Propertyware: Before becoming GM, Inaas was a customer because of ability to customize system based on business models.

[06:38] Who uses Propertyware? Typically, larger companies wanting to scale and grow.

[07:45] Room to Grow: Never buy a solution for where your business is today; always buy a solution for where you want it to be.

[09:50] Directions for Growth:

Add units by differentiating services via customization and special offers.
Increase revenue per door by offering add-on products and services.
Reduce expenses via automation for manual and repetitive tasks.

[20:33] Propertyware stands behind its platform; serves as business advisor, not only technology provider, to solve pain points.

[23:54] Facilitating Future Integrations: Freedom to connect with third-party tools, vendors, and services.

[27:40] API Connections and Challenges: Propertyware provides two-way data exchange that’s maintained in one system.

[34:50] Status of Property Management Industry: Advocate, educate, and train others on legislation and awareness to protect tenants and landlords.

[45:38] Should you switch software? Break up dysfunctional system to experience freedom by having good data, building relationships, and improving processes.

Tweetables

Never buy software for where you’re at today; always buy software for where you want to be.

Pick property management software that you can live with for the long-term to grow.

Automate mundane tasks performed by property managers via software.

Kiss of death is double entry and manual input.

Resources

Inaas Arabi on LinkedIn