#DoorGrowShow - Property Management Growth

Transcript

[00:00:00] If you have team members you don't feel safe giving up a chunk of your business to run for you, it's because they don't share your values. And if they don't share your values, you'll never trust them.

[00:00:09] Welcome DoorGrow Hackers to the #DoorGrowShow! 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 in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.

[00:00:48] At DoorGrow, we are on a mission to transform property management business owners and their businesses. 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 here with Sarah, the COO of DoorGrow. And now let's get into the show.

[00:01:16] So what are we chatting about today?

[00:01:18] We are going to talk about profits.

[00:01:21] Okay. I'm noticing this trend lately in talking with some clients, in talking with property managers, that some companies that are struggling with profitability-- which tends to happen when you have a team, usually in the 200-600 door range. Some are now maybe two to 400 range, which I call the second sand trap. A lot of times I'm noticing that they're trying to figure out profitability. They're like, " we don't have a good enough profit margin and-- Oh, we just did a cool video.

[00:01:53] We did.

[00:01:54] Called what?

[00:01:55] Profit Martian.

[00:01:56] Profit Martian

[00:01:58] Little silly play on words. It's this silly video, make sure you go do a search on YouTube for Profit Martian. So you need to focus on your profit margin, right? And a lot of property managers have really bad profit margins. Like some of the gurus and mentors and coaches that you look up at out there, some of the people with tons of doors, their profit margin actually really sucks. It doesn't matter how many doors you have or how few doors you have, you can have a really bad profit margin.

[00:02:26] Yeah. So actually, um, I was talking to somebody just maybe two days ago and he sent me some data from NARPM. So they do all of their little, you know, tests and data gathering and all of that good stuff. And this is from, I think, not 2022, but I think 2021. But there's like a whole breakdown. And if you're in the 50th percentile of property management companies, regardless of size, the average profit margin for companies in the 50th percentile is only 1%. Like one 1%, like one whole percent, which is... I almost threw up when I saw that document. Like, oh, whoa. I felt so gutted. And, I don't know, maybe I was just doing something different when I was running my company, but my profit margins were insane. They were insane. It can be--

[00:03:18] Define insane. Can you tell them?

[00:03:20] I was well over 50% profit margin.

[00:03:22] Yeah.

[00:03:23] Like well over 50%. She's kind of efficient. I ran a tight ship. We did. But I almost couldn't believe the data, but I have to believe the data. It comes from NARPM right? So it's like, well, that's the data. So I don't know what's happening. And I think, I think we made the connection.

[00:03:42] Yeah. And wait, can I brag by you for just a sec? So in--

[00:03:45] Yeah.

[00:03:46] So she has, she was managing over 200 doors.

[00:03:50] 260

[00:03:51] Okay.

[00:03:51] Okay. It's a difference.

[00:03:53] That's a lot. Some companies only have 60 and they're struggling. So 260 And these are C class properties?

[00:04:02] Yeah.

[00:04:03] Small multifamily.

[00:04:04] And lots of single. Single and small multi.

[00:04:07] Yeah.

[00:04:08] Our like big multi was like 10 units, like a 10 unit building.

[00:04:11] Okay.

[00:04:11] We don't have in that area, big, big buildings.

[00:04:14] And these are like not necessarily the easiest tenants normally.

[00:04:18] No.

[00:04:19] Now she did this with only one part-time person that was boots on the ground.

[00:04:27] Mm-hmm.

[00:04:28] And Sarah was so bored. She was so bored, she came to work in DoorGrow like she was like--

[00:04:35] Twice.

[00:04:36] Yeah.

[00:04:37] Yeah. So I came and then I left and then came back.

[00:04:41] Yeah so I just want to point out like she's super efficient and she was able to do that. After looking inside of like, and talking to thousands of property management companies, like, I know that's exceptional. Like, I know that's rare and a lot of people are like, how's it possible? And some clients of ours, after Sarah's gotten on a coaching call with them, have cut their staffing costs in half, or fired half their staff. Like--

[00:05:01] Yeah. I've had a few of them today.

[00:05:03] Yeah.

[00:05:04] And then they thanked me for it.

[00:05:05] Yeah.

[00:05:06] Yeah.

[00:05:06] Well, the team members probably didn't.

[00:05:08] Well, not them, no. They weren't too happy.

[00:05:11] So what we're noticing is a lot of times property managers are like, "we need more KPIs, we need more metrics, data. We need more data, numbers, we need more micromanaging and more process documentation because we're trying to squeeze blood from a stone. Like " how can I get a little bit more juice out of my team?" when they don't focus on the actual real problem. And the real problem is you have a shitty team. Like your team--

[00:05:38] The wrong team.

[00:05:39] And maybe they're good people, maybe they have good values, but they probably do not match the three fits. Did I do an episode on the three fits previously?

[00:05:49] Probably at some point. I think a lot of times what I see is-- and not just in property management, just in general, businesses-- they hire the wrong way.

[00:05:57] Yeah.

[00:05:58] So there are three different fits and they go cultural fit, then personality fit, then skill fit.

[00:06:05] Mm-hmm.

[00:06:05] And they should be in that order. Most of the times, what I see is the reverse. So they focus first on skill fit and then on personality fit and maybe culture.

[00:06:19] So the Three Fits of DoorGrow... trademark. So the Three Fits to the Ultimate Hire, this is a framework that I came up with because I was just noticing in my own business this became really important. I was also noticing in other businesses of other million dollar plus business owners we hang out with and in lots of our clients. Like a lot of people were having difficulty with team members. This is common no matter how big the business is or how small it is, if they had a team. And it's because they don't have people that are the three fits. There's sort of a similar concept I noticed in the Traction book, but I didn't really like that model. I wanted to simplify this. So here's how I look at it, I look at it through these three lenses. First culture fit. Do they share your values? You can assess your team right now. Does everybody on your team share your values? If you're not clear on what your values are, though, the answer is probably no. They might have good values. That doesn't mean that your team members might have bad values, it just means they might be different. Like for example, you might value things being done very efficiently. Maybe that's a big deal to you and your clients value that, and you want to make sure things are done as cheaply and efficiently as possible. But maybe you have a person that's a vendor or a maintenance coordinator or in-house maintenance staff and they value things being done, quality, and they take a ton of time. Or it might be the reverse for a lot of you. It's just different competing values. And so if somebody doesn't have the same values as you, what's the big problem with that?

[00:07:54] Well, the problem is they're going to make decisions differently than you make decisions.

[00:07:59] And so you'll never trust them. You cannot trust them. So this is the thing, if you have team members you don't feel safe giving up a chunk of your business to to run for you, it's because they don't share your values. And if they don't share your values, you'll never trust them. That's the bottom line. Let's talk about personality fit. Culture fit is the most important, like Sarah said. Personality fit. This means they naturally love doing this job. They naturally love doing it, which means they don't have to be motivated. They don't wake up in the morning and think, "I can't wait to for the weekend. I hate this job." They like, they love doing what they get to do. And believe me when I tell you, you may think nobody loves property management. Nobody loves this... there is a person. There are people out there that love changing bed pans. There are people out there that love doing just about anything if you get the right personality fit for that role. Not everybody loves sales, but if somebody's the right personality fit, they love it. They love the push. They love the hunt. They love the chase. They love the challenge. They love talking to people. They have no resistance to doing cold calling.

[00:09:04] Some people love that stuff. Some people hate it. Some people love accounting. Some people hate it. Some people love, you know, whatever it is. You can pick anything. And so personality fit means if they're good culture fit and a good personality, that means you just need the third, the last thing, which is skill. The skill fit means they have the training and the experience to do the job. So you can hire people that already have the skill, which is somebody that already knows how to do it well. They're what we would call a "who." They're looking for somebody who can do the job, or there's those that you can train and teach how, so that would be like hiring a "how". There's a really great book called Who Not How, which is a really great book, and in the beginning, early stages you have to hire "hows" and you're going to teach them, which means you have to be the "who" that knows everything.

[00:09:56] And later on you're going to start to hire people that are beyond your level. Like I hire people beyond my level that are better at these things than me. I hire "whos". They're much better at these things. And so here's how this works. I usually have a Venn diagram, three circles that are overlapping. I've got culture, personality, skill, and if they have culture and personality, they can be trained-- is what shows up in the middle of those two. If they have culture and skill, but they're not the right personality fit for the role. They don't love it. But they believe in you. They love your company. They share your values, and they have the skill to do the job and the training. Here's the caveat, they'll never be great. They'll never be great at that role because they'll always have friction and resistance. Let's say you hire somebody to be a bdm, but they hate talking on the phone. They don't like reaching out to people and it's uncomfortable. You've trained them. They have the skill to do it. They believe in your values and believe in your business, and they share a belief in you. Like they like want to support you, but they're always going to have friction and they're going to avoid it. "Well I tried texting them twice," you know, and you're like, you have got to call them, right? So if they are personality fit and a skill fit, but not a culture fit, you'll never trust them. And so that's how these play out. If you have all three, they're the ultimate hire. Okay, so what I want you to understand is if you're focusing on profitability right now, KPIs, metrics, more micromanaging, it takes an infinite amount of processes and micromanaging to try and create the results you'll get from the three fits, and you'll never get close. It just won't happen. And so it doesn't make sense to go sign up with profit coaching companies and working on your NARPM accounting standard and all these metrics, when the easiest low-hanging fruit to increase profitability is to tackle the biggest expense in your business if you have a team. And what is that? What's the biggest expense?

[00:11:47] The biggest expense on your team? Well, all the people.

[00:11:49] Yeah. If you have a team, it's your team. People are--

[00:11:53] You have got to pay people. They like that.

[00:11:55] People are expensive. They're way more expensive than software. They're expensive. And you need people in a property management business. It's a people based business, right? It's about relationships and communication and all this. And so the first thing we want to do is decrease the unnecessary work, which Sarah's really brilliant at. We decrease the unnecessary work. That alone can cut your staffing costs in half.

[00:12:18] And redundancy. I've talked to like a lot of property managers where it's like, "who handles your leasing?" And they're like, "oh, Joe and Sally." Nope. have one, one person. Because if Joe and Sally does it, that means nobody's actually doing it. Because Joe will say, "oh, I thought it was Sally." Sally will say, "oh, I thought it was Joe." and he goes back and forth and that's how things fall through cracks. That's how things get missed. That's how mistakes happen. There's no true ownership...

[00:12:43] Yeah.

[00:12:43] ...of that thing. And if there's no ownership, you can like guarantee that it's not going to happen.

[00:12:49] If it's not clear who owns the particular job or task or thing to be done, then nobody does, and then they'll be stepping on each other's toes so there'll be double work or it'll just get left undone. Or "I thought they were going to do it." It becomes a mess. Right?

[00:13:01] Mm-hmm.

[00:13:02] What else should we talk about about this? I think the thing is if you've seen our DoorGrow Code, and if you haven't seen that, I highly recommend you reach out to our team, get a copy of the DoorGrow Code. It shows the roadmap to go from basically zero to 1000 doors and how to do it as quick as possible. A lot of people focus on the profit system, which we have way later at like maybe the 600 door red belt stage, but they've skipped really dialing in their pipeline system. Maybe your sales CRM right now is still like a spreadsheet and you don't have your sales process defined. You don't have maybe a process system, so you don't have some sort of system like we're launching DoorGrow Flow, which is really cool. Vizio like flowchart software for mapping out your processes and for your team running the processes in the business consistently. But you don't have a really solid process system where the processes are clearly defined. But even if you have all the processes in the world, if you don't have a good people system in the business, which is the next thing that you need to have, this is your hiring system. This is how you vet your team. This is how you make sure everybody are the three fits. And I should point out the most important, who's the most important business that should be the three fits?

[00:14:14] The CEO.

[00:14:15] Yeah.

[00:14:16] Yeah. So those of you listening, if you're the business owner, it's you. You should be making sure you are the right personality fit for the roles that you're in. And I guarantee if you're wearing every hat right now, or a lot of hats, you're not, you're not the personality fit. That's why you don't love doing some of those things. Those are the first things we've got to get off your plate.

[00:14:33] Yeah. I talked with an owner yesterday and he's like, "oh, I do everything." I'm like, "all right, let's talk about what is everything? Tell me what you do" "I do this and this and this and this and this. So the list is like 20 things long. I'm like okay so out of those things, like what are the things you actually enjoy? "Like I love building systems." He's like, "I love it." He's like, "that's what I do." I'm like, "okay, cool. So what are you doing right now that you hate, that you like, if I could like just snap my fingers, you would never have to do again? What would be?" He's like, I hate doing sales, which is really--

[00:15:02] This was a business owner... bizarre

[00:15:04] Really unique because a lot of times the business owner loves doing sales. That's the role they want to keep. They're like, "I love doing that. I love talking to people. I love networking. I love selling. I love promoting my business. I love that." He hated it. I'm like, "you're an operator and that's great." I'm like, that's cool. Like you're that operator personality type. The operator is not going to do sales. So if you're hiring somebody and you're like, "oh yeah, you're going to help me out with admin work and operations, and then they're also going to be like BDM and doing cold calls and..." no, they're not. No, those are two different personality types.

[00:15:34] Yeah.

[00:15:35] And they clash hard. They clash hard. So in that case, like he should not be doing sales because he hates it. So does he do it? Yes, because he has to. But does he like doing it? No, absolutely not. So if you don't like doing something and you're forcing yourself to do it, it means a few things. First of all, it means you're probably not going to be really super good at it because you're forcing yourself to do it. So you're just going to like, all right, how can I hurry up? How can I get through? Like you're not intentional with it. You're not. Because your heart isn't in it. You're like, I hate doing this. This is just something I have to do. Um, and then it also means that it will fall on his list of priorities really low, which means it will happen last. So he'll go, oh, these are all the things I could do instead of doing sales calls and he'll do 20 million other things instead of doing the sales calls. And the sales calls are the thing that actually are going to help grow the business. But since it's such a painful thing for him to do, it's going to come so low on his list of priorities that that will be the thing that either gets done last or gets skipped. So in that case, like take off that hat and hire it out. You need a bdm.

[00:16:47] So one of the things that we recommend that you do is you need the process system. You need a people system. And so that's something we help our clients build out is a hiring system. We have DoorGrow ATS that stands for Applicant tracking system and software, and then we have an AI assessments partner that we partner with to assess you and your team and your potential new hires.

[00:17:08] Mm-hmm.

[00:17:08] Then we have things that we help you map out, like R Docs, which are the ultimate job descriptions, which will filter out and help also attract some people that are the right personality fit. And so we have this whole system for--

[00:17:21] the right culture fit.

[00:17:22] Yeah.

[00:17:22] Yeah. Your R doc will attract the right culture fit.

[00:17:25] And so the hiring system we put in place reduces that risk because one bad hire is going to cost you probably about 10 grand minimum. You'll probably have a month for three months. You'll be paying them some sort of amount of money each month, and they will probably also cost you some business, especially if they're connected to the front end at. So it's going to be expensive.

[00:17:45] Yeah. Plus your time to train them.

[00:17:46] Yeah.

[00:17:46] Or somebody else's, like on your team is training them so their time.

[00:17:51] Yeah. So you're losing money.

[00:17:52] Plus they missed opportunity from finding the right person. Yeah.

[00:17:55] So bad hiring is super costly in the business. It eats your profits up like crazy. Bad team members or weak team members or team members that are not solidly the 3 fits. Eat your profits like crazy.

[00:18:09] Yeah.

[00:18:10] And then we have people that have somewhat mediocre teams or they're just not in the right seat on the bus, as a lot of people like to say. And then they don't have a planning system. And that's the next system we want to put in place a planning system. Once you have an operator and you have, you know, a team, a planning system, it really is the rocket fuel for your business and the planning system that we've built is better than EOS. It's better than Traction, all that kinda stuff out there, those are very top down. It needs to be bottom up to where your teams start to work and function like business owners thinking strategically in helping you grow these different arms and pieces of the business that you put them over on your executive team. And so DoorGrow OS allows that to happen. It's software that we've built and this allows you to come up with your annual, quarterly, monthly, and weekly goals as a team to figure out how do we eat this elephant one bite at a time and break it down. And it creates ownership, it creates accountability. Everybody can see whether or not people are getting things done. There's green "yeses" and red "no's" at the end of the week on this software and everybody's accountable and can see it. A players, people that are the three fits, they love this, they love this accountability, they love being in the system. B players will quit.

[00:19:30] Mm-hmm.

[00:19:31] I've seen it multiple times. We implement something in a business, a planning system like this, and then team members quit. They're like, forget this. I don't want to be seen. I don't want to be accountable. I don't want them to know whether I'm getting stuff done or not. I just want to do my day-to-day tasks. This really is where you have team members that are now moving the business forward instead of you dragging them up the mountain towards the goal, which a lot of you feel like that. And if you're dragging your team members up the mountain, they're all sitting in the wagon and you're pulling them and you're trying to clear the path with the machete and go up the mountain towards the goal, you have the wrong team. If you get your team in the right alignment and you've got your values defined, you've got your process system, your people system, your planning system, your pipeline system, you've got all these, you will be infinitely more profitable.

[00:20:15] I find that I get three times the output from team members if they are the three fits easily. And so what would that do? Imagine what that would do if you got three times the output from the existing team, how much more capacity you could have. How would that affect your business? Like it would be, it's pretty magical, I will tell you. So our clients grow pretty rapidly. And so focusing on those after we get all those systems in place, then at DoorGrow we'll focus with clients on the profit system.

[00:20:43] Mm-hmm.

[00:20:44] After all that, going to the profit system and KPIs and metrics and trying to squeeze team members and all this is kind of like you're trying to do body building and you are taking creatine. You're like, creatine's supposed to help my muscles. Yeah, it can help a little bit, but you need to eat food. You need to get sleep. You need to exercise, like you need to do the basics. So don't jump to the end and now start to squeeze more money out of your team and more profitability when you haven't solved all these earlier problems that need to be solved.

[00:21:18] Don't put the cart before the horse.

[00:21:20] Yeah, it really is putting a cart before the horse.

[00:21:23] And everyone wants to, because they all want to focus on profitability and there are ways that you can focus on profitability. in your company early on, like door number one, you should be focused on profitability and there are things that you should be tracking in your business, but when you hire a team member and then you're like, oh, I'm just going to put in like 10 metrics that they have to do every day and I want end of day reports and I want weekly reports and I want this and I want that, I want this. It's just not going to be the same thing. Those are not going to be the things that actually help you be more profitable in the business, and that's what everybody thinks, but that's a really common mistake. The things that are actually going to help you be profitable in your business are things like looking at your P and L. Whoa. Crazy, right? And it's okay if you don't, right? Because this is what we do. This is how we learn. But you are not looking at your P and L every month making decisions based off of your P and L, then that's a missed opportunity. And then if you're not tracking your profit margin, if you're like, "I have no idea what my profit margin is, I don't know," then there's a missed opportunity. So those are the things that you could do even early on with or without team members. That will actually help you and you can make decisions accordingly and based off of that information, instead of saying, "all right, now I want to micromanage my team more and I want implement this and this and this and this, I need 12 tracking systems and I need all this data and all these metrics and all these spreadsheets," then what you're doing is you're just paying your team to do more work.

[00:22:51] And that work isn't even moving the needle, which everyone thinks that moves the needle it doesn't move the needle.

[00:22:57] So let's talk real quick about having the wrong team. Really, if you've been stuck at maybe the 200 to 400 door range for several years, you can't figure out how to get ahead, usually, the problem is you. Whether you want to admit it or not, you have the wrong team. You're micromanaging them. They come to you asking every question, and you can't trust them to think and make decisions the way that you would, and this is because you've built the wrong team and that's on you. And so there's a couple myths. One myth is the clone myth. I see this early on. They think, "well, if I could just find somebody else like me then I could clone myself. I just need that one person. They'll be just like me, and that's all I need. Entrepreneurs, I want you to understand it takes like 10 people to clone yourself. It takes like 10 people because you're so adaptable. You can do so many different things. And so it takes like 10 people to clone you. There's not just one.

[00:23:52] And if you found somebody that actually was like you that could wear multiple hats and be highly adaptable and like was intelligent, you could learn all this stuff and do all of this, guess what? You're just training your next competitor. They're going to leave you because would you work for somebody? Probably not. You want freedom, you want fulfillment, you want the Four Reasons you are an entrepreneur. If you find somebody highly adaptable like that, they're going to learn what they can from you and they're going to go, "I can do this better myself. I can have more money, more time, more freedom, more fulfillment if I do this myself. I'm going to go do that." So if you find a good clone, they will be a clone, but they will also start doing what you're doing, and that-- I've seen that happen a lot. And they'll take some of your portfolio with them sometimes, regardless of what sort of legal stuff you think you've got protection on. I've seen that happen over and over again.

[00:24:42] So the other thing is if you have the wrong team, this is something we can help you with at DoorGrow. We can help you figure out your team, assess, and we'll help you figure out which things are your strengths, which things do you most enjoy doing so we can build the right team around you.

[00:24:56] Mm-hmm.

[00:24:57] You can't build the right team around the wrong person, and so if you're showing up as the wrong person in the business, you're not doing things that you love, you're not focused on those things and then you're hiring team members based on what the business needs. This is the big failure I see why people get stuck at 200-400 doors is they built a team based on what they think the business needs instead of based on what you personally need as a business owner. We will help you figure that out. We have processes for this. We do time studies, we help you with R docs, all these things. We're going to get you clarity. We'll have you do our AI assessment as well. We'll get you clarity on what you should be doing and what you love doing, and then we will help you figure out very clearly what the next right hire is based on your time study instead of based on what you think the business needs because where the pain in the business is.

[00:25:45] That's going to change your life because now your business gets easier and easier and better and better the bigger your team gets, you are focusing more and more on what you love the bigger the team gets and the more doors you have, the more revenue you have. And that means you're now building the right team and your business becomes more and more effective and more and more efficient as it gets bigger instead of more and more stressful. So we can help you get out of this. We can shift you from the wrong team and you showing up as the wrong person and wearing the wrong hats that you don't enjoy very quickly. It'd probably take us about a quarter to make significant movement on this. Even in the first month, you're going to get some serious insights and we'll make some shifts, but in a quarter, we can usually get you to a much healthier place where you feel like you have more fulfillment, more freedom, and we've restructured your team so that we can help you out.

[00:26:34] We've done that. I just did that with the client recently and he thought, "Hey, I'm the operator."

[00:26:39] Yeah.

[00:26:39] "This is what I like. I like being the operator. I'm good at this. I'll do this." And then we assessed him because we built out his r doc for the operator. We assessed him in that role and he was like, "oh. I should not be doing this role."

[00:26:51] He was not an operator.

[00:26:53] : I actually don't like this and I don't function well in that capacity." So he realized that he should not be running the business in the operator capacity.

[00:27:02] Mm-hmm.

[00:27:03] Which means he needed to hire an operator. So that allowed him to focus on the things that he actually does like, which is the sales and the bdm, not surprisingly. So he's now in that role in the business and he was like, "Hey, I'm going to hire an operator, and he had someone on his team that he thought was going to be able to ascend into this operator position. He was going to start him out and then kind of ascend him and give him like a little bit more and a little bit more. We assessed this team member the same way, and it was very clear, "this is not going to be your operator."

[00:27:35] Yeah.

[00:27:36] "So if you put him in this position for right now, like it will be like, you know, a butt in the seat, but this is not your long-term guy. This is definitely not your forever guy. There's just going to be too much friction because he doesn't function in that capacity. He doesn't." And he said, "well I think I'm going to try it. We're, we're going to see how it goes." He tried it and very, very quickly he realized, "oh, this is not the right move. He's not going to be able to handle these things that operators handle." He could handle like a few pieces. So he's like, "I have to change, I have to change the role and I have to continue looking for the operator." and it was so funny because he was like "the AI assessment showed me very clearly, like, I am not the person for this. and he is not the right person for this."

[00:28:24] Mm-hmm.

[00:28:24] But he was able to make those decisions and have that, like, have that clarity in his business because of those assessments and because we built out the R docs and aside from doing that, he wouldn't have known and he just would've been the operator. That's what he thought he was supposed to do.

[00:28:39] Yeah. So we have these R docs, we feed them into this AI tool. It helps us assess the different personality qualities and then we can adjust those levers based on what we think, whether it's accurate or not. And so it's very easy. Like we can sit down with a client like this client and look at this and go, what's the ideal operator? "Well, they would have this attribute, this attribute, this attribute." Cool. And then we have him take the assessment and it shows that's not him. It's pretty obvious. I mean, and then he looks at those, "well, what are my attributes? And then he can say, yeah, that's true about me. I can see that now." so it really provides some clarity.

[00:29:12] I just want to say one more thing on that. So since we ran the business through that assessment we had his results.

[00:29:18] Yeah.

[00:29:19] And then we ran this other person that he thought was going to end up being the operator through that same assessment. And we had his results and we could see, first of all, that the business owner was not going to function as the operator. But it also staff ranks them so we could see the business owner out of two candidates. Right. We had the business owner and this other, the other team member.

[00:29:36] Yeah.

[00:29:36] The business owner scored the best, which still was not great. And then this person scored less than the business owner.

[00:29:45] Yeah.

[00:29:46] Which means that he definitely cannot do the role because he actually would do a worse job in the role than the business owner. And we already know that the business owner was not the right fit for role.

[00:29:57] Yeah.

[00:29:57] So it was like super clear. He's like, "oh, I see that now very clearly."

[00:30:01] You want people that are better at these jobs, and that's the ideal. Everybody on my executive team are better at their job than I would be. I used to do every role in the business. I can do their jobs, but I don't love doing their jobs, which means I'm not going to be as great at their jobs, and I wouldn't put as much attention on it. Right?

[00:30:23] Okay. So to sum this up, if right now you feel like you need more metrics, more KPIs, and more processes, and that's your gateway to profitability and freedom and everything else, you probably have the wrong team, and you need to get the right systems in place. You need a really good planning, communication, people, hiring, pipeline. All these systems in place that we have in our DoorGrow Super System to get your business in alignment. And then you're ready to start eating up other companies. You're ready to start buying and acquiring companies. You're ready to start, like you can see team members into this and hire. You can scale infinitely. Once you have these systems in place, you can scale. And that's our goal at DoorGrow is to create scalable businesses. And so if you want some help with scaling your business, getting out of, you know, the crappy day to day and the frustration, and you feel like your only way out of this business is to sell it someday, you can exit certain pieces of the business without exiting the business.

[00:31:23] I've exited almost all the pieces... I've exited all the pieces that I really don't enjoy in my business. And I will continually be exiting pieces until maybe someday actually exit everything in the business and just an owner. Well, maybe eventually I die, or whatever, right? So you want to figure out which level of exit you want and you don't have to exit the frontline work or the stuff that you don't enjoy doing. This myth that you're the only person that can do it is bs. "Nobody else can do it better than me" is bs. This is what early entrepreneurs usually say that aren't well seasoned or haven't realized there's people out there that are smarter than you, better than you at most everything that you don't enjoy doing.

[00:32:02] And you need to find those people. And we can, we can help you with that. We can help you get out of that situation and you're going to be way more profitable. You will have so much more profitability if we do that stuff first. And then after all that, we can focus on maybe some metrics and some KPIs, but most companies probably don't even need that granular sort of stuff once they have all this other stuff dealt with and taken care of. So, anything else you want to add?

[00:32:29] I don't think so. I love doing this stuff. This is how my brain works, so like the clients that are like in our program and going through this stuff, I love it. I'll talk about it all day long. And I do think it's something that you can do that really will propel you. It's going to move you into that world that you really hoped that you would get right, because I doubt very much when you started a property management company, you were like, "man, I can't wait to talk to tenants every day. I can't wait to deal with maintenance. That's going to be so fun. Oh yes, dealing with tenants and evictions and like, all the nonsense that comes along with it, like, yeah! I can't wait for that. It's going to be so fun." It's like, probably not really your dream job. Like it sure as hell is not my dream job. I will tell you that. I've been offloading like more and more to my assistant and I'm like, "oh, this is so nice. I don't have to deal with a lot of the stuff that I used to have to deal with."

[00:33:23] But I think a lot of times what business owners forget, or at least they don't realize it for some reason, is this is your business and you get to build it the way that you want to. So all of the, "I should do this" and "I have to do this," and "I'm the business owner, so this is my job." No, you create your job. You decide what your role is because you started the company. So all of the, "I have to do the accounting because I'm the owner." False. Like "I have to do the sales because I'm the owner." False. Like all of the things that you think that you need to do, do they have to be done? Yes. Does it have to be you? No. So you get to be the one who decides what seat do you sit in in the company, and I have clients that say, "I don't want any of the freaking seats at all." Awesome. Let's make that happen for you.

[00:34:12] Yeah. I mean, if you wanted to be the receptionist, you could just be the receptionist, like it's your business. You can do whatever the hell you want.

[00:34:18] You can do whatever you want.

[00:34:19] Yeah.

[00:34:19] If there's a thing in your business and you're like, I love this piece. Then keep that piece and let that be your role, and then hire out around that, like that piece. Don't give that piece away if that's the thing that you like.

[00:34:34] One of my mentors said something to me that really hit me in the gut, and he said-- and I've shared this on the podcast before-- but he said, "Jason, if you don't yet have the business of your dreams, it's because you're not yet the person that can run it yet." and so that's our goal at DoorGrow with our clients, is we want to teach you to be the entrepreneur that can have the business of your dreams. You can have it. There's no reason why you can't have it. If anyone can do it, you can do it too, and we can help you get there. So That's it for today. So hopefully this was helpful. Until next time to our mutual growth, everybody, be sure to like, subscribe, follow us on all the different channels. We're on everything and we appreciate it. And leave us a good review somewhere. We would love that too. And check us out. Go to doorgrow.com and for those of you that want to be part of a free community, get some free stuff, and hang out with some other entrepreneurs and kind of be nurtured by us, and learn more about DoorGrow because you're not just ready to pull the trigger. Go to doorgrowclub.com. You can join our free Facebook group, and get in there. And if you're ready to have a conversation with my team and us map out a roadmap and a plan for you to get out of some of the suck that you don't want to be in, go to DoorGrow.com and book a call with our team. All right, bye everyone.

[00:35:51] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!

[00:36:18] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

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DGS 198: A Simple Solution To Eliminate Landlord Paid Water Utilities In Your Property Management Business With Kal McDonough 0

Mar 3, 2023

In this podcast episode, property management expert Jason Hull talks to Kal McDonough from True Submeter about how their product helps eliminate landlord-paid water usage and increase net operating income in rental units.

Kal explains how their product is different from competitors, how it works, and why property managers should consider using it to benefit both themselves and their clients.

You’ll Learn…

[01:18] Introducing True Submeter

[04:06] A Submeter that uses WIFI?

[08:48] Tracking Usage in Multi-Family units

[10:24] Warranties and Replacements

[11:25] Early Warning Systems and Alerts

Tweetables

“True Submeter eliminates a middle ground and coordination with the tenant and the city.”

"We have finally developed a significant product that is used across the country to eliminate landlord paid water usage and increase net operating income in rental units."

“A lot of owners are paying for their tenants' water usage.”

“It also eliminates you having to kind of coordinate with the tenant, coordinate with the city. That's completely on us.”

Resources

DoorGrow and Scale Mastermind

TalkRoute Referral Link

Transcript

[00:00:00] A lot of owners are paying for their tenants' water usage. We have finally developed a significant product that is used across the country to eliminate landlord paid water usage and increase net operating income in rental units.

[00:00:17] Welcome Doorgrow Hackers to the DoorGrowShow. 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 in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. 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.

[00:01:18] My guest today is Kal McDonough. Did I say it right?

[00:01:22] Yes, you did. Jason, I appreciate you having me here today.

[00:01:25] Glad to have you. So Kal, you are with a company called what? What's the name of the company?

[00:01:32] True Submeter.

[00:01:33] True Submeter. Okay. So can you explain to us a little bit of background on yourself and how you got really excited about submeters?

[00:01:43] Yeah, absolutely. I'm a recent grad from the University of Minnesota and we started this company, me and my partner, in 2016 because we got interested in real estate. Now being so young, we didn't know how to start investing with nothing. We didn't have the capital to do it. So we tried to figure out a product that real estate investors would like to have, that we could make that no one is really doing. And that's how we figured out a lot of people, a lot of owners are paying for their tenants' water usage. So we wanted to create a product to eliminate that, which is our True Submeter. It's a true submeter. We started this project in 2016 and we have finally developed a significant product that is used across the country to eliminate landlord paid water usage and increase net operating income in rental units.

[00:02:40] Okay.

[00:02:42] Yeah, so basically we have two major products. We have our main line meter and our point of use meter. And the main line is our biggest seller, as you only need one per unit. These get attached to the plumbing to each, and it remotely tracks bills and shows live coverage of water usage for each month. So if someone were interested in purchasing our product, we set up an account for you. We send you our product, you install it, and from there on we take care of all the billing that is necessary for your tenants to receive the water bills, and then they will pay you, the landlord, and it's completely covered from there.

[00:03:23] Got it. So people aren't using anything like this currently? Often?

[00:03:30] So we have few competitors, however their products do not do the same thing as we do. Most of the time. If you would like to buy a submeter, you get the physical submeter and it has readings on it that you can physically take. Most people will need to hire someone to go read those. However, ours connect to wifi and automatically trans mit that to your account and to the tenants. So it eliminates a middle ground there. And it also eliminates you having to kind of coordinate with the tenant, coordinate with the city. That's completely on us.

[00:04:06] Got it. How do you solve the wifi challenge, or whose wifi are these using?

[00:04:12] Right, great question. So we set up our own routers and ship them with each order. These are specifically only to connect to our sub meters, so no one else can use these routers. There's special wifi, username and password that only our meters get connected to and we completely take care of the cellular payments and everything. So this has nothing to do with the landlord. You don't have to set up a new wireless connection. And it's great that we can troubleshoot it knowing that it's our own wifi.

[00:04:42] Got it. Okay. So tell me, what are some of the big questions that people have about this and why should they do the extra work to get this set up and pay attention to this? Most property managers are probably thinking: how's this going to make me more money? How's this going to benefit my clients? Maybe you could go into that.

[00:05:01] Yeah, absolutely. I can start off with a pretty simple example. Just saying if a landlord that owns a simple duplex is currently paying for their tenant's water bills because the property only gets one water bill. A lot of cities have a legal rule where you cannot split it down the middle because one tenant is using less.

[00:05:20] Right.

[00:05:20] You can't have them billed for more than what they're using. And that's one of the key reasons why our product is so great is if you're now recording the specific usage for each tenant, now you're able to bill them. A lot of people question is it worth the money? Is it worth the investment? A great thing about our product is for a lot of the people that we sell to, this is a one-time investment that now you're saving all of this monthly revenue that you don't have to pay for your tenant's water bill. I would like to get into that a little bit more as we do charge a monthly service fee, which is $5.90. Per unit. So say you have a duplex $5.90 per unit, that's $11.80 per month. However, we are able to bill this to the tenant. So this could be a one-time investment for a landlord owner or a property owner or property management company. And I think that's really what sets us apart of from any competitor that we have as well is we minimize our costs of the investment there. There is no one else that is able to accommodate the pricing of this for an original investment. Like I said, we have two main products, our mainline meters, which I touched on a little bit, and then we also have a point of use meter. Now the difference between these two products depends on the plumbing of the property. If plumbing is separated between units our mainline option is going to work fantastic for you because you only need one meter per unit. And these come at a flat price of $79 each. Now if plumbing is not separated and it flows through the entire property, we have our point of use option, which gets attached to every single point of use in the unit.

[00:07:11] For example, a kitchen sink, a bathroom sink, toilet washer, shower et cetera. Now, this is a little bit bigger of an investment being that you need more meters and it comes at the same price per meter, $79 each. But it does the same function. They do the exact same thing. We group these point of use meters together. They all still connect to the same wifi router and still bill monthly. Now this is another reason why we are kind of special in that we are the only people that have this point of use option. Otherwise it's completely mainline meters from our competitors. And that's really something special that we set ourselves apart from. Although we recommend if possible, our main line meter is just easier and more affordable. We can accommodate those interesting plumbing scenarios.

[00:08:04] Got it. And so how difficult is it to attach the mainline meters or the point of use, meters? Is this something they need plumber to install or is this something they can typically do?

[00:08:16] Yep. So we do not do installation as we're based out of Minnesota and we sell to across the country. A plumber is recommended. Although we do know a few of our customers have a maintenance team on hand if it's a property management company or whatnot. We send an installation guide that goes step by step. If someone wanted to save money and do it themselves, they would have the opportunity to do that, although we do recommend a plumber on site.

[00:08:43] Right. That's probably a good idea for liability reasons.

[00:08:47] Of course.

[00:08:48] Alright, cool. So how do you justify this to people that have multi-unit properties and, they're low rent. How are you convincing, the property managers to do this and how are they convincing the owners to do this? Right, of course. Well, a great tool that we have, which is included on our website, is an ROI. This is a simple tool that you can plug in simple math equations and find out how much money you will be saving or how much return on the investment you will get from us. I think that's an easy way to, really show that we are worth it. And if that's not enough, then we just want to provide the simplicity of eliminating something like this for a property management company. What's nice for multi-home owners is that the account that we will set up for a personal owner, all of your properties in one are in one. It's easy to use. We, like I said before, we are very pleased with the simplicity of our website, our accounts, how they function. And along with that, I would like to offer my support and troubleshooting techniques to give any customers that we have an opportunity to connect with someone real instead of just looking up on our website and trying to find a solution.

[00:10:01] So Kal, you mentioned your website several times. What's the website address?

[00:10:05] It's simple. It's truesubmeter.com.

[00:10:07] Okay. And there's no clever spelling with True. It's t r u e.

[00:10:11] T r u e s u b m e t e r.com.

[00:10:16] Got it. Great. Truesubmeter.com. Okay. What other questions might property managers be curious to know about this or concerns?

[00:10:24] One question that we get quite a lot is, do we have a warranty? As our warranty is that if our meters break due to natural use, we'll replace 'em. We have a few to minimal to none replacements necessary in the time that we've been a company, which is quite impressive. We do know that some people have interesting tenants that will like to not cooperate in the ways that we would always like them to. And we offer a major discount based off of that if a meter happens to get tampered with broken due to outside circumstances. So that's one question that we get quite a bit.

[00:11:02] And they can pass that along, to the tenant. They can fee the tenant for damaging. You agree?

[00:11:08] Correct? Correct. We have had a couple of issues with some tenants that were not supposed to be there anymore. And we had to redo an entire project based off of that. And they weren't, they were not happy with that bill. But yes, we're very confident in our products which also I think sets us apart. And. . I'm trying to think of all--

[00:11:25] So curious, related to that, if a property is vacant, is there any sort of warning system that could be in integrated with this? Maybe in the future if somebody is flushing toilets or using the sink or something and no maintenance people and no tenants are in place like it's vacant? Absolutely. I mean, one of the key things to that is if the property is vacant and there is usage going. You will get a monthly bill saying there's usage. Obviously unless we know from the landlord that the property is vacant and there shouldn't be we're going to be assuming that it should be in usage. But otherwise-- another thing just to add on to that is our leak detection system where if we get weekly usage rates that show us if there's a abnormally large amount of usage at a property which will trigger us to contact the landlord and say, Hey, there's quite a bit of usage here. There could possibly be a leak. We know sometimes tenants do use this amount of water, but if not, this should get checked on. And then that's saving the landlord numerous amount of money as well. They don't have to pay the city for all the leaking.

[00:12:34] Got it. Okay. Yeah. Very cool. All right. Did we miss anything?

[00:12:40] Not off the top of my head. I think we kind of covered everything. Very cool. Leak detection. If it's vacant, you'll be alerted by the monthly bill. Like, Hey, what's going on here? You've got the main benefit. Why don't you sum up the main sort of benefit here and we'll wrap up.

[00:12:56] Right. I mean, like we've stated a couple times here, the main benefit of our product is to eliminate landlord paid water utilities. I mean, that's the main goal of our company. It's a small investment to a large return. And I think that's why people should look into our company and partner with us going forward.

[00:13:15] Cool. And this can be a profit center for property managers.

[00:13:20] That is a good question. This cannot be a profit center for property managers. As there is strict rules with how much tenants get billed for usage and utilities we make sure that they are only getting billed for what the city bills them. And that is due to legal terms.

[00:13:36] Got it. But they can charge a monthly fee for the use of this tool or service?

[00:13:42] Correct. That is correct.

[00:13:44] Okay.

[00:13:44] And this monthly fee is from True Submeter ourselves.

[00:13:49] Yeah. Can they mark that up?

[00:13:51] We have had a few customers in the past mark this up to combat the investment, and that is allowed. However, we don't recommend it as tenants most likely would not like to pay higher bills for, probably for something that they might not have wanted in the first place.

[00:14:09] Sure. Okay. But at least they don't have to pay the water bill for their neighbor.

[00:14:15] Correct. Correct.

[00:14:17] Okay. Very cool. All right, well Kal appreciate you coming on the show and sharing this. Everybody, check out truesubmeter.com. And thanks for being on the DoorGrowShow.

[00:14:27] Jason, I appreciate you being-- letting me be on here. Thank you.

[00:14:31] Awesome. So if you are a property management entrepreneur that wants to add doors, you want to scale your operations, you're tired of being frustrated with your team, then reach out. We would love to see if we could help you grow and scale your business, get the right team in place. You can check us out at doorgrow.com and we hope to hear from you soon.

[00:14:54] Bye everyone.

[00:14:55] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!

[00:15:21] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Download this Episode