Tax season is upon us. Every property management business owner knows the struggle of trying to navigate IRS regulations each year and find the best outcome.
In this episode, property management growth experts Jason and Sarah Hull sit down with Mo Hussein with Balanced Asset Solutions.
[02:05] Talking tax code and regulations
[10:02] Why you need an accounting tool/software
[18:38] Reducing your tax liability
[23:21] Writing off education costs
[26:24] A few more tips for the road
“The experts are worth a lot more to me than software.”
“You're going to pay for everything in business, whether it's going to be in time or in cash.”
“If a handyman shows up with only a multi tool instead of a toolbox to do a job, the property manager is probably not going to call that guy back.”
“There's certainly a wrong way to do taxes, but there isn't a right way or one way to submit your taxes.”
[00:00:00] Mo: I think what's most important is having a single source of accounting truth I think that's probably what one of the biggest things that a lot of businesses struggle with, especially when it comes to tax season.
[00:00:10] Jason: Welcome doorGrowers 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 a business and life, and you're open to doing things a bit differently, then you are a DoorGrower. DoorGrower property managers 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. We're your hosts property management, growth experts, Jason Hall and Sarah Hall, the owners of DoorGrow. Now let's get into the show. All right.
[00:01:08] And today we have Mo Hussain back on the show. What's up Mo?
[00:01:12] Mo: Hey, doing well. Pleasure to be here.
[00:01:15] Jason: So we're going to be chatting a bit about tax strategies today. Yes. All right, cool. So let's dig into this. This is something that is near and dear to Sarah's heart, which is super weird.
[00:01:25] Sarah: I hate paying taxes. Fun fact, I don't want to give more of my money away if I don't have to.
[00:01:31] Jason: I know if I see something on Instagram about a tax strategy, I should just send it to her and she'll find it interesting. Like she just gets into this stuff. So Mo, what do you got for us today?
[00:01:42] Mo: Yeah. Sarah, you are definitely probably the first person I've come across that has actually made a comment that you actually love going through this entire process.
[00:01:50] Taxes is one of those things that, there's a saying, there's two things guaranteed in life, death and taxes.
[00:01:55] Jason: And I'm trying to avoid both. So how do we avoid some of the tax?
[00:01:59] Mo: I don't know if we can help with the death part. Maybe over time.
[00:02:01] Jason: We'll probably all be somewhat avoid some of the death maybe.
[00:02:05] Mo: Unfortunately, the tax code is very thick. It's honestly created an entire industry of professionals like myself and other CPA firms that are specifically just dedicated to decoding it and maximizing savings with our clients and with taxpayers in general, there's, there's a litany of information that's on the IRS website.
[00:02:22] It's very difficult to parse through and and there's also consistent changes that are happening each year. I think probably the biggest changes that are happening this year that a lot of property managers are being impacted by is the new 1099 filings and the IRS portal. Prior to 2023, you'd be able to file your 1099s via paper as of 2023 now, for any filers that are filing more than 10 returns, those have to be filed electronically on the IRS has created the iris. The IRS has created this new portal called the IRIS and allows for you to be able to submit your 1099s electronically. And there's some changes that have happened between the fire system that a lot of folks were using before and the new IRIS system, of course, making things more and more, more, more complex as usual.
[00:03:07] Jason: Got it. Why would they make anything easy? Yeah, it's definitely not the goal to be audited next year. Now, it seems when it comes to tax strategies, you've got every everything ranging from across the spectrum from risky, maybe not even actually viable strategies all the way to really safe and conservative.
[00:03:31] And some will save you a lot more on taxes on the risky side, going towards more conservative. How do you balance this?
[00:03:39] Mo: Good question. Medium. Good question. The interesting thing is although our CPA firm will file taxes on behalf of our clients. And there'll be another CPA firm maybe the client was working with before that filed taxes the year before. And maybe even though the deductions or maybe other things haven't changed significantly the return and the actual filing and the composition of it is different. And but it doesn't necessarily mean 1 way to do it is wrong than another way. There's a lot of different strategies, especially when it comes to things like depreciating assets and taking advantage, for example, of a bonus depreciation.
[00:04:12] And just give you some context, bonus depreciation was a tax incentive that was enacted by Congress and in 2002 and it basically allows for accelerated business tax deduction on a large asset over an accelerated period of time versus over the duration or the lifetime of the actual asset.
[00:04:30] Real estate is a great example of that. In 2023, you have bonus depreciation of up to 80 percent that can be taken advantage of, and then it drops to 60 percent in 2024, 40.25%, 26%, and 0% thereafter. However, a lot of these deductions, you may not want to take advantage of depending on where your revenues are at, so you can actually minimize your tax liability.
[00:04:53] And so there's a lot of strategy around in different ways that a tax account or CPA will file your tax. And so that's where we see the variation what you mentioned about risky. There's certainly a wrong way to do taxes, but there isn't a right way or 1 way to submit your taxes.
[00:05:09] And that's why you see a lot of different tax accounts and CPAs have different ways and strategies of submitting their clients' taxes.
[00:05:15] Jason: Okay. All right. What are some things that property managers should be paying attention to this time of year here at year end? Yeah. Max this out.
[00:05:24] Mo: Yeah. All right. One thing that we always urge our clients is the tax season shouldn't be an annual kind of activity or flurry at the end of the year, but a lot of folks wind up doing is nobody really thinks about taxes until after the new year and it's February and you're looking at March and April when the tax deadline is due for both your business and your personal taxes.
[00:05:44] And honestly, that isn't the best time that you should be thinking about it. You should be thinking about it throughout the duration of the year. You should have some accounting system that's keeping track of all your expenses with the path act that got enacted in 2015, real estate agents and brokers have some additional relief when it comes to business related purchases that got that made changes to the IRS section I believe 179 deduction. And for example. In the tax year 2023, you can expense or write off up to $28,900 of the price of a new car for the tax year in which you bought it another certain limits of the type of vehicle that qualifies for this tax break. However, these limits are part of allowable deductions.
[00:06:21] And if you're thinking about your taxes throughout the year, certain decisions that you'll make about acquisitions or things that you may be purchasing for the business may make a material impact at the end of the year on kind of your tax implications. And it's important to keep a log of all your receipts, expenses and everything throughout the year.
[00:06:37] A lot of times when clients wait until February to start putting together all the prep work and the receipts and everything for their expenses, a lot of times you'll miss things and we always suggest you should take your time and file an accurate return. Versus just trying to be beat the deadline and not get hit with a potential fine you have in April when the taxes are due, but you can always file for an extension. And if there is a tax liability that's assessed, there will be interest that will be accrued during that period of time. But again, it's better to be accurate and maximize your deductions versus being in a hurry.
[00:07:08] Sarah: Got it. Are there any deductions or obvious tech strategies that you would recommend for property managers or real estate agents in general?
[00:07:18] Mo: Yeah great question. Some of the most common types of deductions for agents and brokers and property managers are marketing expenses, such as sales, open house signs, flyers, web development, business cards, mailers.
[00:07:31] If you're leveraging a service, like DoorGrow, just consider real estate coaching and training. Those are considered education cost. Licensing and renewal fees. Things like association dues for MLSes, brokerage desk fees, any type of transportation kind of expenses, whether it be automobile maintenance or repairs, gas, mileage, travel, home office expenses, and even gifts, although there is a limit on gifts of a 25 dollar deduction for per client per year, and so there's a lot of different things that you can deduct. And a lot of times what happens is, you may be a broker or a property manager that's going to show a property and you need to go buy some flyers or handful flyers or something like there's some type of piece of marketing collateral.
[00:08:13] And so you may go to FedEx and just use your credit card. And although at the time, it's registering in your head, that may be something that you forget to enter into the accounting system later. And so you're not leveraging that and as an actual viable business deduction.
[00:08:26] And so this is why it's important that you're logging kind of your accounting activity and have a easy system to use something to use that's on the go as well. So you can easily kind of catalog and log these expenses. All these minor costs add up over time. And, you need to make accounts so you can maximize your deductions here.
[00:08:43] Okay.
[00:08:43] Jason: What do you think is the easiest system to use?
[00:08:46] Mo: To stay away from words of easiest system or things like that, because it's very subjective, right? It's, we're all creatures of kind of habit. And some folks are tethered to their phones and are okay with using a litany of different applications.
[00:08:57] A lot of our clients will use kind of QuickBooks for their management system, and for their to manage the kind of their corporate books, there is a mobile app can easily log things as you're going. You can connect that directly to your bank account and your credit card. And so as transactions occur, you can make sure that those are logged correctly.
[00:09:13] I would say that, having a system that has an integration to whatever banking and credit cards that you're using and reconciling that account on a monthly basis to ensure that you're logging all the transaction. And then also keep in mind in scenarios where you're paying out of pocket for something or loaning something to the business, even though you may be the sole owner and want to take advantage of those.
[00:09:33] There's a lot of different pieces of software that are out there that can help with that. We usually suggest for clients is, if you're already using some type of a property management and accounting system to manage your business, let's say Appfolio, there is a way to also manage your corporate books.
[00:09:45] A lot of these property based accounting systems also have the ability to manage your corporate books. And it's not only specifically for real estate. They're an accounting system at the end of the day. And you can just create kind of things like a fictitious property labeled your corporate business and run all your financials and keep track of your finances that way.
[00:10:02] Sarah: Now would be a really good time to send a reminder to property managers that your property management software is probably not the best software to do your internal accounting. So a lot of times clients are like, "Oh yeah, I have software for that. I use Rent Manager or Appfolio or Buildium. And that's fantastic to manage your client's accounts, but it's not the best system to like internally manage your accounting, it's not going to have the same functionality as something like QuickBooks would.
[00:10:36] Jason: But you're saying some that's what they do.
[00:10:39] They use a lot. That's what they do.
[00:10:41] Mo: What I'm saying is that so these accounting systems. So the main difference. So if you think about something like a QuickBooks, it's a general accounting system. So it's meant for any business. The chart of accounts is very malleable, if you will, something like property based accounting system there is no such thing as like a business. There's a property, there's tenants, there's owners, there's vendors. Now, you can finagle or manipulate and come up with work around so that you can manage your books there. However, you'll have kind of an entire different chart of accounts for your corporate business, which would be different than, what shows up on the financial owners.
[00:11:13] And so there's a trade off. You can use another system that's maybe tailored specifically to your business, like a QuickBooks and you have the flexibility of things like integrating credit cards and stuff, which is a nuance when you come to property based accounting systems. But then you have to manage 2 different platforms, or you can figure out some work arounds and try to manage and keep track of your financials in 1 of these property based accounting systems.
[00:11:35] But then have to keep in mind about some of these work arounds, like reconciling, like a credit card, which isn't the same thing as reconciling like a bank account. But. So there are trade offs. But I think what's most important is, what we say having a single source of accounting truth I think that's probably what one of the biggest things that a lot of businesses struggle with, especially when it comes to tax season. Is that. " Oh, I have a bunch of receipts and stuff that are in my inbox. I have some screenshots on my iPhone. I have, this random Google Drive folder with other information. I need to call Sally, who's my, maintenance supervisor or whatever about some other transactions and stuff," and there isn't a single place of accounting truth. And having that will definitely save a lot of time, especially when it comes to prep.
[00:12:15] Jason: I would think that grown up property managers are probably at least using something like QuickBooks because at some point they really should be on the NARPM standard accounting, standard of accounting chart of accounts. There's just some advantages.
[00:12:29] Especially if they're wanting to exit that business someday, having clean books that are not commingled with your client's stuff inside Appfolio, for example, would make your business a lot more appealing and you'd probably fetch a prettier penny.
[00:12:44] Sarah: And I think a lot of times people think, "Oh this is an accounting software because it does all of the accounting for my clients."
[00:12:50] And there are differences for sure between how your PM software and how something like QuickBooks doesn't have to be QuickBooks, but we use QuickBooks. I like it and I can use it and I don't like technology. So something like QuickBooks functions, there are differences. And the other thing to keep in mind is if you have a team and your team has access to your property management software and you're putting all of your bookkeeping and accounting and financial data in there, your team has access to it and you may or may not want that. Some people might be very open and they have an open books policy and they don't care at all.
[00:13:30] Some people, they hear that idea and they go, "there is no way I would do that." So if you're one of these people who's using your property management software as your own internal accounting system, you might want to think about doing that maybe a little differently.
[00:13:44] Jason: I think this is where there's a challenge in business and in this industry that a lot of business owners don't recognize the differentiator between all these systems that you need in order to run a business.
[00:13:55] You definitely need something like Property Ware, Appfolio, Buildium and Rent Manager, Rent Vine, whatever as a back office. And as a billing system as the main system for getting paid basically, and then you need an accounting and financial system. And those are different, the accounting and financial system, you need a system for how to manage money, how to do finances. So for example, Profit First is a nice baby step for a lot of businesses that are just getting started and have Frankenstein accounting as Mike Michalowicz calls it, and then you need a sales CRM system, which is usually very different than the CRM, which they're calling their back office where it's focused on bringing clients into the business. They're like "I have a CRM. It's Appfolio." And it's not the same thing. And and then there's several other systems that you need in a business process system, planning systems, et cetera.
[00:14:47] When people start to think that they have a one system, they're like "I've got Appfolio, so I've got every system I need." This is where they struggle then to be able to scale their business because they don't have the knowledge, the insights and the transparency that they would need in order to get to the next level.
[00:15:03] And they don't have the right tool to do all these other jobs. It's not the Swiss army knife. And what's funny is I sometimes equate this to the little multi tool that a handyman might have on his belt. If a handyman shows up with only a multi tool instead of a toolbox to do a job, the property manager is probably not going to call that guy back.
[00:15:23] "Oh yeah, I've got a hammer. It's right here." It's not the same. It's not the same. So same thing in business. You can't just run it off of one system. There's no magic one system. Everybody has to build a stack of tools. I'm sure in your business, you have a stack of tools that use as well.
[00:15:37] You don't have just one system, right?
[00:15:39] Mo: That's right. It's all about using the best tool using the best tool to get the job done. That's an example that you mentioned about the handyman. At least when it comes to business, it's a huge cost when it comes with time and you're going to pay for everything in business, whether it's going to be in time or in cash. And where you take shortcuts on investing in certain systems, you're going to pay for it in the amount of additional time it's going to take for work arounds and manual things and processes, which is also brings up another point that we always stress to our clients is always consistently read like evaluating the business and your processes and the tooling that's being used so that you can constantly as we say, evolve forward.
[00:16:15] Jason: Yeah, it's interesting. I had a mentor and he taught me this concept he called the five currencies. And basically there's five currencies you have to invest in life and in business. And it's time, energy, focus, cash, and effort. And what's funny is there's you get early on stage entrepreneurs that I think are trying to just avoid cash.
[00:16:35] They're like, "I want to be cheap. I want to not spend money." And these are the ones that struggle to grow the most because they don't understand that their money is something that you can renew and earn. But time, as far as our life goes, is the scarcest resource. And what's really crazy to me is that our team members, we're buying their life. We're buying chunks of their time. They're trading time of their life for money. And they're trading probably the cheapest commodity for the best, or the trade and the best commodity for the easiest to get it seems like, but that's where they're at. And so as entrepreneurs, our goal is to move beyond just giving up our time and to get money.
[00:17:16] And, we can invest more effort. We can invest more focus. We can limit the stuff we're focused on to grow faster, but in business, same thing with these tools, if we think we are saving money by only using one tool, we've got our crappy multi tool instead of building the ultimate stack,
[00:17:36] then usually they just end up spending more on payroll. There's having to buy more time to do less stuff. And get less stuff done. So technology is a lot cheaper than people. That's I'm sure everyone listening realizes that, but.
[00:17:49] Mo: Yeah, there's a difference in business when you're looking at things from the lens of a perspective of an expense, versus looking at the total cost of ownership for a particular solution or process or something like that.
[00:18:02] And and and in that regard, you can actually, assess the amount of time that's wasted and there's always going to be some opportunity cost. You are a business owner, nobody gets into real estate because they want to do accounting or because they want to work on taxes and whatnot.
[00:18:16] And so there are professionals out there who's, sole service and focus and business models is focused on that. And and that's not something that's going to differentiate you from your competition. So those things that are not going to differentiate you, those are the things you should be outsourcing and the things that you should be seeking help to take off your plate.
[00:18:31] So you can focus on the things that actually drive your business forward. And allow for you to be able to grow your portfolio.
[00:18:37] Sarah: Yeah, for sure. All right. Now I know this won't be the same for everyone because taxes is this crazy like mishmash of information and what works for you might not work for me and vice versa. Knowing that there's no one size fits all here. We're not shopping like off the rack. This is all tailored. What are some strategies that property managers should at least look into? Now, it might not make sense for everybody, but what are some things that they should at least look into and see "hey, does this make sense for me to implement this? I love learning right? So I love learning especially like how I can save money on taxes. So what are some ways that they can look into and see if it's right for them?
[00:19:18] Mo: Reducing their tax liability Yeah, no, great question. . Of the biggest nuances are just things in accounting is that, there's no such thing as being a creative accountant, right? There's always a right way to do things.
[00:19:27] But there isn't just one right way to structure your business. And so one thing that we see a lot of clients struggle with is, they'll create a business initially, most folks don't start off in property management or they're either doing, they either own a brokerage firm or they're an agent and whatnot and they're doing actual real estate sales.
[00:19:45] And then they'll try to, get into property management and maybe they have also they're doing in house maintenance and whatnot and maybe like a leasing only service and and maybe they also have assets on the side that they own themselves. And one common-
[00:19:56] Sarah: yeah. They're like, "I do all of these things."
[00:19:59] Mo: I do all of these things, but they're doing it all under one entity. And so it's " hey, you should have a separate entity and LLC. There are liability reasons or mitigation for liability that you want to do this. And also, there are some potential tax benefits you can have an actual main corporation and you can have a sub entity or an LLC." That's your brokerage business. A separate LLC, that's the property management business. A separate LLC, that's the leasing only business. Separate LLC, that's the maintenance only business. And that, for example, that corporation can tax each of those sub LLCs, like a licensing cost, just to be able to actually use the name.
[00:20:32] Of course, it may be the same ownership structure, but that's a potential way of of having a tax savings. A great example is you have the largest Companies like Apple and Nike and stuff like that, they have separate entities that are outside the US that tax licensing fees, just to use like the check mark with the entity that exists, that's actually transacting with the customers.
[00:20:49] And then the other benefit of having all these entities that are separated out is that if you ever want to have a portion of the business that you wanna sell, you can demonstrate what the profitability, the profit and loss looks for that business. And you can have a separate valuation metric for that particular business and spin it off, especially if you have assets of your own, you want to have that in a separate entity, because you'll be able to take advantage of bonus depreciation. And that bonus depreciation essentially allows for you to be able to, take a rental property and take an immediate 1st year kind of deduction. If it's in 2023, you can start at 80 percent and whatever the bottom net losses on that particular asset, or that particular business that owns that asset that can now be offset the excess income. That's liable to taxes to offset against another entity. And so there's some strategies around that. There's also ways to be able to loan a particular asset or for example, if you have a car, you can rent it out to 1 of the entities, even though it may be the same individual that's using it.
[00:21:49] There's a way to structure your taxes so that. Even if you own the property, you can technically lease it to 1 of the other entities and that can be a business expense and write off against another against 1 of your other entities. And so there's a lot of kind of small things like that that can make a material difference when collectively put together. But what it will ultimately we suggested something that we don't see too much. And usually we see a lot of clients struggling with is rather than having all your different enterprises and your sales activities, just revenue generating activities wrapped up into 1 entity to separate them out based on business lines.
[00:22:22] And this also gives you as an owner perspective on what is working, what is not what needs help and attention and things that sort of be a little bit more prescriptive and data driven and how you make those decisions.
[00:22:32] Sarah: Like that. For sure. Yeah. And then it's. Different P and L's to see, "Hey, what part is actually profitable here and what part, if any, is taking a loss. Where does my attention actually need to be? Because what makes me the most money?" Instead of going "I think this looks pretty good."
[00:22:47] Jason: Things get mixed up. People make bad decisions. It's funny. Just for example, we'll get somebody that says, "oh yeah, I'm getting plenty of leads" and they're spending thousands of dollars on internet marketing.
[00:22:57] And I'm like, cool. And they justify it. But I say, "where are you getting the leads from?" The majority were word of mouth. And so you're spending a bunch of money and I'm like, "cool, let's separate this out. What's your acquisition costs on ones you can attribute to the internet marketing stuff you're doing?
[00:23:11] And sometimes they're like, "Oh yeah, it's 3- 400 a unit to like, to get on a client." And I'm like, that's ridiculous. And then they're like, "cool. I'll sign up for DoorGrow." I'm curious about the education costs and here at the end of the year, how do we help people justify signing up with DoorGrow leveraging education costs and getting that tax deduction?
[00:23:33] Sarah: Such a good question because that's R and D! Research and development.
[00:23:36] Mo: Yeah, it is. It is. Yeah. Real estate coaching training and education costs is considered an expense. It can be considered a deductible expense at the end of the day, especially a lot of the insight and kind of value that you guys add to the community is something that I think is priceless.
[00:23:52] And if it's going to make a material impact to clients, bottom line, the thing is that none of us can be experts in everything. And so kinda the reality in business is you can learn in two ways. You can either learn from somebody else's mistakes or learnings, or you can learn the hard way yourself.
[00:24:05] The latter is going to take more time, which you're not going to get back. And so the folks that are able to accelerate and grow their business, take advantage of like coaching and training and educational type of costs, I would say, "how do you justify that expense?" At the end of the year, if you're going to have an excess of income, that's going to be tax liable. And in these educational costs, and so you might as well invest instead of giving that money to Uncle Sam, give it to Uncle Jason and find a way to maximize and grow that kind of that ROI. I would say that's probably something that a lot of novice kind of entrepreneurs don't probably put too much emphasis on when they're 1st, embarking on their entrepreneurial journey it's just the importance and significance of education and insight, especially from those that have blazed the path before you, or have exposure to a lot of other folks that are in your same shoes.
[00:24:49] Jason: It really is probably one of my greatest secrets in how we've scaled and built DoorGrow and the success we've had is once I finally stopped being the idiot that thought they could do everything and watch all the videos on YouTube and read books and figure it out myself.
[00:25:05] I started to collapse time significantly when I got coaches and mentors and we shell out a lot of money to coaches and mentors and I've got some amazing ones right now, like really amazing coaches and mentors. And what it does is, yes, I'm spending more money, but I'm decreasing time. So it's collapsing time for me significantly.
[00:25:24] I'm making a lot less mistakes. I'm not having to figure it out because every stage of business, you're stepping into the dark. And it's nice if somebody has already been there before you 'cause they're not in the dark about it. So they're like, "Oh yeah, just do this and do this. I've already tried that and that, and it doesn't work." And I was like, that's what I was going to do. And the same thing, the majority of the people that come to me are like, "I'm having trouble growing my business." And I'm like, "cool. What do you, what have you been trying? Or what are you planning to do at the startup stage?"
[00:25:50] They're like, "I'm going to do internet marketing and SEO, pay per click," they're going to do everything. All the biggest companies that they're competing with are already spending way more money than them doing it. And they're just going to do it worse. And that's their strategy. "I'm going to do what the big companies are doing, but worse. And I'm going to try and charge less money. I'll be cheaper. And I will somehow provide better service." And I'm like, "good luck with that." And so we don't know what we don't know. And we make mistakes at each stage. And the secret to collapsing time is to spend money and invest in yourself. You get that back.
[00:26:21] There's a big ROI. All right. Thanks for helping us sell door. I appreciate it.
[00:26:24] Sarah: All right. So if you're looking for tax write offs at the end of the year, sign up with DoorGrow, we can help. Yeah. Don't give your money to the government.
[00:26:31] Jason: And then we'll help you make more money. Nobody stays with us unless we're helping them make more money.
[00:26:36] Sarah: Yeah, they haven't helped me yet.
[00:26:38] Jason: Taxes are not giving you an ROI.
[00:26:39] Sarah: Next year when we audited them, they're like..
[00:26:42] Mo: Another thing that I wanted to comment on, actually, a lot of people may not be aware of is between the COVID period of time, there's a Biden had released this this new initiative to be able to give back payable taxes.
[00:26:53] And so if you had full time employees, between 2020 and 2021, I think it's up to $25,000 for each employee for each year, and that you can potentially be entitled to up to that amount. And so if you had full time employees, and that's free money, that's not free money. Technically, those are Payroll taxes that your organization already paid, but the government is literally just give it back to you as part of this initiative.
[00:27:16] I'll take my payroll taxes back. That sounds great. The only requirement is that you had, you kept people on full time payroll during the 2020, 2021 year. And that those folks were with you for at least a year. And that those were actual W2 employees, not 1099.
[00:27:31] Jason: Okay. That's worth talking about it.
[00:27:34] Oh, she's up on all this.
[00:27:37] Sarah: I don't know. Did you think I would have missed that? Okay. I'm telling you, I'm like-
[00:27:43] Jason: She has some strange hobbies. Alright. I do, I know. Mo this has been really interesting. I appreciate you coming and hanging out on the show. Why don't you tell us a little bit about your company and how you can help people with some of this stuff if they're listening to all this going, "man, this is a bunch of gobbledygook I really could use help making this all make sense, and I thought Appfolio was an accounting system for my business" and they're just trying to figure it all out. How can they get ahold of you?
[00:28:07] Mo: Great question. Before I comment on that, one, one thing that I do want to the misconception of Hey, just because you bought accounting software doesn't mean you bought accounting experts.
[00:28:14] Sarah: Okay. Oh, that's so good. I love, I'm going to use that.
[00:28:18] Jason: The experts are worth a lot more to me than software.
[00:28:22] Mo: And usually there'll be priced a lot higher too, because the software, the proper application of it, it's like buying, It's like buying a seesaw or hammer or some tool, it's much cheaper to actually buy the tool versus buying or having the expert that's actually going to be utilizing the tool to build whatever. The peace of mind to me is priceless. So it is. I lead a group, a consulting group balance asset solutions been over for a little bit over 7 years. We are a CPA and technology advisory firm assisting clients with accounting, CFO services, like taxes, acquisition, disposition strategy, software implementations we're partners with a lot of the accounting systems like Yardi, and Appfolio, and Propertyware, and Buildium. We also help with Department of Real Estate audits and forensic accounting customer reporting, fund management. We're here to help maximize the value out of your subscription, streamline your business with technology and software, and give you time back to spend on the things that matter to your business, which is growing kind of your top line and working with your tenants and owners. We have clients in over 35 states and we have deep expertise when it comes to the trust accounting gap, the department of real estate compliance representation. So consultations are free and you can find us online at www. balancedassetsolutions. com.
[00:29:33] Jason: Man, that's an awesome combo, nerdy accountants.
[00:29:36] That's like the best combo ever, right? All right. Super cool. All right. So hopefully some people are reaching out to you right now when they're watching this and we appreciate you coming on the show.
[00:29:46] Mo: Of course. Thank you so much, Jason. Take care.
[00:29:48] Jason: All right. Take care. If you are a property management entrepreneur, you're wanting to grow your business, reach out to us at DoorGrow.
[00:29:54] We would love to help you out. You can check us out at doorgrow.Com and join our free Facebook group at doorgrowclub.Com. Bye everyone.
[00:30:00] 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!
[00:30:26] 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.
Savvy property management entrepreneurs are always on the lookout for new ways to expand their services and better serve their clients and residents.
In this episode, property management growth experts Jason and Sarah Hull chat with Nick Friedman, founder of College Hunks Hauling Junk and Trash Butler.
[02:08] Becoming an entrepreneur
[09:14] Daily trash removal for multifamily communities
[16:45] A butler service for trash? How does it work?
[19:47] Vetting team members
[27:50] Junk removal services for property managers
“Property managers are that front-line resource for all things community.”
“We've got to have urgency of effort, patience for the results.”
“Culture drives behavior. Behavior drives results.”
“Execution is a differentiator if you can out-execute everybody else.”
[00:00:00] Nick: I have come to realize, because we're in a blue collar industry ourselves, moving furniture and picking up trash at residents' doorsteps. Execution is a differentiator if you can out execute everybody else.
[00:00:14] Jason: All right. Welcome DoorGrowers 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 a business and life, and you're open to doing things a bit differently then you are a DoorGrower. DoorGrower property managers, love the opportunities, daily variety, unique challenges and freedom that property management brings.
[00:00:39] 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.
[00:00:56] We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. We're your hosts, property management growth experts, Jason Hull, the founder and CEO of DoorGrow and Sarah Hull, the co owner and COO of DoorGrow.
[00:01:12] Now let's get into the show. All right. And our guest today is Nick Friedman. Did I say your name right?
[00:01:20] You got it right.
[00:01:21] Cool. And Nick has two different businesses. And why don't you introduce the two businesses and then I'd love to get into your background of how you got into entrepreneurship.
[00:01:30] Nick: Absolutely. So two businesses that are relevant to property management, one is a doorstep amenity for apartment complexes called Trash Butler. It helps increase revenue and net operating income for the communities while also providing an amenity for the residents and that kind of incubated out of our first company that we launched, which is a company called College Hunks Hauling Junk and Moving. I'm a little more widely known for that business that I started back in college. It's a moving and bulk removal service that now has over 300 franchises across the U.S. So it's been a fun journey and a very entrepreneurial journey to say the least.
[00:02:08] Jason: Awesome. So Nick, when did you first realize you were an entrepreneur that you were a little bit weird?
[00:02:13] Nick: I would have to say in retrospect, it was all the way into my early days of childhood. My sister had a lemonade stand in front of our house. She wanted to charge 25 cents for lemonade. I went out and started a competing lemonade next to hers and I wanted to charge a dollar for my lemonade because I thought my lemonade was better and I think we probably sold the same amount of cups, but I made four times the amount of money than she did because I was charging a dollar then she was charging 25 cents. So in hindsight, I think I would always do some out of the box things. My teachers would call me a little bit restless. But really our business innovation took place when we were in college. Because we had always been brought up and told to follow the more traditional career path, work hard in school, get good grades, get a job after you graduate, climb up that ladder.
[00:02:56] And the summer before my senior year of college. My buddy's mom had a beat up cargo van from her furniture store and she said, "why don't you guys go do something with the van? You guys could move furniture, haul trash, you guys could be like college hunks who haul junk," and we just started laughing about it decided to put that on flyers and the phone started ringing so we were in business and realized that the name was catchy.
[00:03:18] People appreciated quality service and and that was the light bulb moment for us to pursue a career of entrepreneurship and not the traditional path.
[00:03:26] Jason: There you go. So thank goodness for that truck, right? That's right. Changed your life.
[00:03:31] Nick: Totally changed our life. We credit her with the name. Yeah.
[00:03:34] Jason: Competing with the sister. Yeah. Yeah. Yeah, I think for me, it was my entrepreneurial mom who was a real estate agent. She just, she was always hustling, trying to figure out how to make money. And she would have us fold flyers for her and canvas neighborhoods.
[00:03:50] Nick: And that's really when we realized the niche for us is very much so within property management, right?
[00:03:56] Because. A homeowner or business might move every couple of years, might have junk to be removed every so often, but property managers are that front line resource for all things community, whether that's residents who are moving in and out, whether that's bulk trash is being left behind and needs to get turned around for the next move in. And then that ultimately, as I mentioned, incubated our Trash Butler business, which is more of a recurring revenue model, but it produces income for the apartment complexes that we partner with. It was an evolution for us. I always tell the story when we 1st started, we were doing all the work ourselves.
[00:04:29] So we went out and we bought an 800 number. And we slapped it on the back of our truck, trying to make ourselves look bigger, but it was still routed to our cell phone. And so people would call to complain about erratic driving and we'd be in the driver's seat answering the phone, pretending like we weren't, saying, "Oh yeah, we'll fire those guys when they get back on the road, yeah, they're the worst." Yeah. Yeah. "We don't condone that driving in our company." So we probably fired ourselves at least three or four times. And I'm sure, your property manager listeners can relate to that. When they first started their business, you're doing all the work yourself.
[00:04:59] You're fixing the doorknobs, you're changing out the light bulbs and everything in between. And one of our mentors recommended to us that we read a book called the E Myth Revisited, it's by a guy named Michael Gerber. And in it really emphasizes the notion of working on your business, not just in your business, creating systems and processes for the business to scale, which is obviously what you're doing for folks.
[00:05:20] And so I think that was the next light bulb moment for us is if we're ever going to have another truck. Let alone another location, let alone eventually a second business. We've got to start documenting how we do everything.
[00:05:31] Jason: Yeah. And is that what kind of helped it take off?
[00:05:34] Nick: I describe ourselves as a 20 year overnight success because it feels like it took that long for us to get to where we are.
[00:05:40] It really did. And I think a lot of entrepreneurs, a lot of business owners and leaders have a level of impatience, which is good. But I always preach to our team, we've got to have urgency of effort, patience for the results, because if we get up every day, grind it out, and then we look a year from now, two years from now, three years from now, based on that consistent grind, we're going to see long term results start to manifest.
[00:06:03] And so none of it happened overnight but it was a process and it was putting systems in place, aligning ourselves with great people and just being committed to our purpose and our vision.
[00:06:14] Jason: Yeah, I love it. I think I love that. Urgency of effort, patience for the result.
[00:06:18] I think as entrepreneurs, nothing's ever fast enough for us.
[00:06:22] Nick: No, and that's a good and a bad thing as a business leader and an entrepreneur is, if we weren't optimistic, we would never start the business in the first place because we believe that the business is going to be successful.
[00:06:34] We may minimize how hard it's going to be. We may minimize some of the challenges that we're going to encounter along the way. And that sort of maybe, cognitive dissonance or whatever you want to call it, getting into business, I think is a good thing, but you then have to then have the grit and the resilience and the sophistication to muscle through the challenging times.
[00:06:56] But I don't think I've ever met an entrepreneur that says, "I made more money faster than I expected to." It's usually longer. "I didn't make as much as I had hoped for when I first started out." And when reality sinks in, some people give up and go back to their corporate grind and other people just stick it out and keep pushing forward.
[00:07:13] Jason: Yeah, I call that the fantasy stage of entrepreneurship. That's the beginning. We only see upside. It's all upside. It's going to be a success. I get property managers coming to me, potential property managers are like, I'm going to start a property management business. I'm like, "Oh yeah, how are you going to do this?"
[00:07:28] And they're like, "it's going to be amazing because all the other companies in my market suck. And I'm like, "okay, what are you going to do different?" "We're going to charge less. And we're going to provide better service." I'm like, "okay, good luck with that."
[00:07:38] Nick: So yeah, that's a tough recipe. Look, I have come to realize, because we're in a blue collar industry ourselves, moving furniture and picking up trash at residents' doorsteps. And execution is a differentiator if you can out execute everybody else. It's not easy. It's not the flashy, shiny objects that entrepreneurs like to chase, but we, coming through this past year, obviously, the market has shifted its leads aren't falling from the sky like they used to, we've had to assess are we doing everything that we're supposed to with every client touch point?
[00:08:09] Are we consistently delivering the service that we preach in all of our markets across all the apartment communities that we service? And that I think is something that that takes reinforcement and repetition. And sometimes it can be a little bit boring, but it matters because that does make a difference.
[00:08:25] I wouldn't charge less than everybody. That's not a sustainable business strategy. But if you can consistently out execute everybody else, that is an advantage.
[00:08:34] Jason: Yeah, if you can out execute everybody else, then you can probably out price everybody else, too, the leader gets to dictate the price, I think.
[00:08:41] Nick: That's right, and usually it's going to cost us more to be able to out execute everybody else, unless you've got just, these magic employees that are willing to take less money to provide a better experience for the customer so that you can charge less it becomes a difficult equation.
[00:08:56] Jason: Yeah. It's not too difficult to close the deal when somebody comes to you and says, "I want the other company's price, but I want your level of service."
[00:09:03] Nick: That's right. That's right. And that is hard to explain in the sales process. If they, having, don't have the relationship or don't have the trust built that, that takes time.
[00:09:14] Jason: Cool. Explain how Trash Butler works for people that have multifamily communities.
[00:09:19] Nick: Yeah, so as I mentioned, it incubated out of our college hunks business. We recognize this opportunity in the apartment space, particularly in a multifamily communities where there's a long walk for the residents to take the trash out.
[00:09:31] If you think about the garden style apartments, even mid rise or raps, where there's a long walk to the trash room or trash shoot. And so this industry has emerged doorstep trash service, where we've signed a contract with the apartment complex and then 5 nights a week, the resident can simply put the trash in front of their door and recyclables in some markets, and then our Butler will come by and take the trash and the recyclables to the onsite compactor, which is provided by the 3rd party hauler. So it saves the resident a trip to the dumpster or the compactor each night or every other night. There's a safety component for the residents, an amenity component for the communities and looking to try to enhance the their quality of life for the residents.
[00:10:10] And then it actually becomes an income producer for the apartment complex. I know that there's some, skepticism about upcharging services in the industry right now. We're staying very close to that legislation, but let's say we charge $10 a month per door to the apartment community.
[00:10:24] They have the ability to, charge anywhere from $20 to in some cases, $30, $40 a month per door to the residents. So it becomes an NOI. Producer, net operating income producer for the community, and it's an amenity for the resident, many times an expected amenity for the resident. So currently, we're the second largest provider in that industry.
[00:10:41] We service about 300, 000 doors nightly. We're the national partner with Graystar, of course, the big 800 pound gorilla of property management. And we started out as a side venture has all of a sudden, blossomed into a meaningful business that we've actually brought in some private equity money to help sustain that growth.
[00:10:58] Jason: Yeah, brilliant. So yeah, I've lived at a complex for a while, and I had to walk forever to go drop my trash off. I hated it. It was super annoying. So I had to have some sort of stupid cart or something just to carry all my trash and like...
[00:11:12] Nick: I used to live in an apartment complex that did not have this service, and I would put the trash either on the hood of my car or in my trunk at times to drive it to the compactor, and one day, I actually forgot that I put it in my trunk, and so I passed by the compactor and this was a hot day in Florida in the summertime.
[00:11:30] So of course, when I came back to my car at the end of a long work day and realized that I had failed to take the trash bag out of the trunk, it was a direct trip to the trash compactor and then the the car dealership. Oh yeah.
[00:11:42] Sarah: And then this is a service that the tenants pay for. Yes?
[00:11:46] Nick: It is.
[00:11:47] So we contract directly with the community, but the tenants pay for it through their lease. So what we do when we sign up a community is we have a what we call phase in pricing where it steps up over the 1st year of the service. And so the community is never out of pocket. It's never a cost to the community.
[00:12:03] The residents are either just paying a pass through, or even an upcharge to the community so that it becomes a profit center for the community. Yes, it does become an ancillary income stream for the apartment complexes. The resident is paying for it. It's part of their lease. It's not something that's opt in, opt out, but if they haven't had it before, it'll wait till the lease renews for it to be added in.
[00:12:24] And so we're not charging full rate during the first year. We're stepping it up during month one, month two, month three in order to ensure that the residents are all paying for it by the time we're fully phased.
[00:12:34] Sarah: Oh, very nice. And then is this nationwide? If someone were like, "Hey, I think that's a great idea. Can I?"
[00:12:40] Nick: It is. Yeah. So we're in about 30 states right now. Usually when you have a national partnership with a company like Graystar, they point to that direction and we run in that direction. So we opened up in the Northeast, we opened up in California. Our biggest presence is in the Southeast, Florida, Texas, Georgia, Carolinas. We've got a pretty big presence in Arizona. I know that's where you guys are. We're all over. We got boots on the ground. That business is not franchised. Our college hunks business is a franchise model that we have independent operators, but our Trash Butler business is all corporately operated.
[00:13:12] So we have managers and and sort of area supervisors in each market that we service.
[00:13:17] Sarah: Oh, very cool.
[00:13:18] Jason: Got it. Yeah. All right. And is there a lot of competition for Trash Butler?
[00:13:22] Nick: Trash Butler and College Hunts has a lot of competition. What I always like to say, there's low barriers to entry, but high barriers to scale.
[00:13:29] So there's probably a lot of similarities with the property management business as well, right? Any mom and pop can go out, hang a sign out or get a truck and say, "I'm in business." and you can do that with one or two communities or maybe one market. But when it comes to scaling out that infrastructure and providing a consistent level of service nationwide there's only a small handful that have done it and that's because it costs a lot of money to get to that scale. You've got to have software. You've got to have great people in every market. You've got to have accountabilities in every market. And that's been good and bad. There's always the people that will come in and try to undercut what we're charging or what their competitors are charging, but they can do that on a one off community or two communities.
[00:14:09] But at some point their systems are going to break because they're doing all the work themselves. Like we did when we first started.
[00:14:15] Jason: Yeah. And I'm sure occasionally you see the cheap, dumb property manager that wants to like, "Oh I'll just do this myself. And I'll just make my team members, I'll make my gal at the front office desk go haul garbage."
[00:14:26] Nick: And, we all know that employee retention is one of the hardest things right now to keeping good people. And you want your good people doing high value activities. At the property management level, you don't want your good people picking up trash from, 100, 200, 300 units every single night.
[00:14:42] That's a surefire way to lose your good people. We think of us as an outsourced arm of property management. We pride ourselves on being an extra set of eyes and ears because we're walking the communities in the night. Night walks and when we're doing our patrol, so we're able to report back if we see a safety hazard or we see anything, suspicious activity, we can report that back in our reporting tools.
[00:15:03] And so it becomes an extension for property management, not a cost center. And that's, I think, the most important piece. And there's redundancy. We've got backup butlers if a butler misses because he's sick or, has a wedding or something, I don't know. And so we send people in their place and that redundancy is important because, the residents will let you hear it if the trash gets missed.
[00:15:22] That's for sure. Yeah. And they're paying for it. So they expect it to get picked up every night that they put it out there.
[00:15:28] Jason: Yeah. If trash day gets missed, there's going to be some pretty unhappy people. It's just sitting on their porch for a week. "Do I bring this back inside? Where do I have to walk it over myself?"
[00:15:37] So how small of a complex do you guys take on? Like what are your sort of limits here?
[00:15:42] Nick: To be honest with you, the sweet spot for a trash butler is really a hundred units and greater. So I know there's a lot of property managers that manage smaller facilities or single family properties.
[00:15:52] Usually communities like that it's smaller communities, it's more difficult to create a scalable model for the nightly doorstep trash pickup service. But we do see a lot of partnerships with our College Hunks business and the single family rentals the smaller apartment complexes where there's tenant leave behinds, or they want to have a move in special, so they'll contract with our College Hunks location in their market to move the resident in or move the resident out because the move in and the move out are two very critical touch points of the overall living experience as it relates to a community. And so I think the property manager may, in some cases, undervalue the importance of that high touch experience, especially on the move in when they're moving out, unless they're moving to another 1 of your properties. "Have a great day. Sorry to see you go." But when they're moving in, you really want to make that a special, memorable, positive experience so that then it reinforces the positive experience they have while living there.
[00:16:45] Jason: Now, normally trash pickup by the garbage companies is weekly, but you get, you mentioned nightly that you're doing this.
[00:16:52] Nick: So we're doing the butler service nightly. We're not taking the trash off property. We're taking it from the doorstep of each resident to the onsite compactor. So if you think about it, the compactor pickups are still going to be weekly but the trash can be picked up from the residents doorstep on a nightly basis, typically 5 nights a week.
[00:17:09] This kind of industry standard is Sunday to Thursday night. And so that's where this is becomes a very attractive amenity because if your trash fills up, you got to take it out and you want to wait until the trash day or whatever. You can put it out five nights a week and the butler's gonna take it to the onsite compactor.
[00:17:24] Jason: Nice. . Yeah, that makes it really convenient. Okay. Got it. Cool. What do property managers typically. Ask about this service that I haven't asked yet?
[00:17:35] Nick: Ah, so what we like to do is we boil it down to three very simple things. What's most important in this service, the doorstep amenity is the trash going to be picked up on time?
[00:17:45] Is it going to be consistent? And is it going to be clean? In other words, is the trash butler not going to leave a mess or loose trash and all those sorts of things. And so we actually have what we call A 3x guarantee of Trash Butler, where we guarantee that those 3 things are going to be 100 percent consistent.
[00:18:02] If not, we're going to make it right financially by reimbursing for the night, or in some cases, the week. And so I think that's really important. Another question that we actually make sure we emphasize is that there are some companies that do this that will use independent contractors and we recommend steering away from that because there's a level of liability and also accountability that's missing if you've got independent contractors picking up the trash five nights a week on your community. And so having a W 2, uniform, background check butler that's walking the hallways, walking the breezeways, picking up the items is really critical as well. So those are usually the most consistent questions.
[00:18:41] I think not a lot of not all property managers really know how to charge the residents back for the service. So we try to pride ourselves on being revenue consultants and sustainability consultants as well. Not just the doorstep vendor for picking up the trash. And so I think, creating that partnership with any of the vendors is really critical, for your listeners not just our category but anybody who they're working with is having that trust and go to relationship.
[00:19:04] That they can, rely on. It's not just an invoice, it's not just a contract, but there's actually a relationship there to ensure that, stuff is getting done when it needs to get done. And again, that goes with maintenance, that goes with roofing, that goes with insurance which I know is a huge issue, with properties these days.
[00:19:21] And I think that we want to be a piece of that overall equation.
[00:19:24] Jason: Yeah. One bad independent contractor story could probably destroy a property management company. It certainly could destroy a relationship with one particular multi family complex or with that particular owner, but it could destroy a business if it were serious enough.
[00:19:41] So that's right. That's right. Yeah. So related to that, how do you vet your butlers?
[00:19:47] Nick: So we prided ourselves both in our college hunts hauling junk business and our trash butler business on really being a culture first team member driven organization. And what I mean by that is we want to get great people.
[00:20:01] It's a blue collar industry, but we want to get people to have pride of ownership of the work that they're doing. So it starts with the recruiting, our job posting, our recruiting machine, our interview process, our background checks, our reference checks, and then our onboarding. Our onboarding and retention is all about, we say, enrolling our team members in either the Trash Butler way or the College Hunks way of doing business.
[00:20:24] And so I think it's important anytime you're hiring employees that you've got a system and a process. For identifying who are the type of people you want to bring into the organization because that's going to help define the culture and we always say culture drives behavior. Behavior drives results.
[00:20:38] And so if you're just picking up any body off the street to fill a hole, you might get somebody good, but chances are, they're not going to be. Aligned with the core values of the company, the purpose of the company. And so we've viewed ourselves as our secret sauce as being able to recruit a widespread labor team decentralized across the country, train them, onboard them and retain them to go out and provide a good service on a consistent basis. And so I think again, relevant to your listeners and their businesses as they think about who they're hiring or teams that they're developing having a set of core values that you would abide by having a long term vision of what you're trying to become as an organization, what you want to be recognized for as an organization.
[00:21:21] And then and then work to the present, the action items that you're going to take to, to ensure that those values are upheld and that the vision is becoming a reality.
[00:21:30] Jason: Yeah, that's that's so in alignment with the stuff that we teach, you mentioned culture, behavior results.
[00:21:35] And when we focus on helping clients figure out their hiring systems, we focus on what I call the three fits, which is culture first personality fit, which relates to behavior and then skill. And skill's the only one that you really can move the needle hugely on. Usually it's about finding people that match your culture, that share your values, and then finding somebody that is the right personality fit to succeed in the role, and then you can train them.
[00:22:01] But most business owners do the opposite. They're like, let's just find somebody with the skill.
[00:22:05] Nick: Somebody who knows how to do it. Yeah you're 100 percent right. There's a mantra. I'm sure you've said it probably is, you hire for attitude, you train for skill. And if you can hold true to that now, look, obviously they have to be capable and competent of learning the skill. If you're providing them the tools to do the work and they still can't do it, then there's a competency gap there that's missing. And you, you have to have, we like to say results based, performance based objectives, but you also have to have good people who align with your values because, if you've got somebody who's not good at the job, but a really good person, ideally, you could train them or find a seat for them to fill. If they're a bad person, but good at their job, then you feel handcuffed and it becomes this poison seed and an apple pie that ends up making the whole thing rotten.
[00:22:56] Yeah, I want a team that can perform on the field, but you've got to have a good dynamic locker room. You can't have somebody in there that's upsetting the team dynamics, and that's where leadership comes in. That's where the leader of the organization has to champion the values, has to champion the vision, has to champion the culture, has to hold people accountable, especially their fellow leaders about, what are the behaviors that we value in our organization that matter to us?
[00:23:24] Jason: Yeah, love it. It's got to be pretty daunting task to run a large empire, especially in a blue collar industry of people to make sure you've got good leadership. Managing good people and a good hiring process.
[00:23:38] Nick: Yeah. It's like I said it was a 20 year overnight success for us and it never gets easier.
[00:23:43] Maybe, new level kind of different devil, but it's it's a lot of fun growing a business and embracing those challenges along the way. But, you hit it on the head, having the right leadership team to help support the founder of the entrepreneur in the journey.
[00:23:58] And another thing that I think your listeners probably can relate to is along the way as their business grows is sometimes you're going to outgrow your leadership team, which we've gone through, multiple layers of that. And it's not easy because somebody who helps you get from, 0 to 20 properties may not be able to take you from 20 to 100 properties or somebody who took, in our business that took us from, 0 to 50 franchises or or what have you.
[00:24:22] And there's a lot of parallels between our trash Butler business and property management. And so I'm sure we're facing the same sort of things and, making sure that you've got folks that... that's probably the hardest part is when they fit the culture, but the business starts to outgrow them.
[00:24:33] And so that's why leadership development is very critical and also identifying the skill sets to make sure they're built for the longterm.
[00:24:41] Jason: Yeah. It said that the number one indicator of success is actually intelligence. And if somebody has enough intelligence, they can rise to different levels of competency and improve.
[00:24:53] For example, like somebody might have a good executive assistant and maybe someday they're CEO, but I've had some assistants in the past that were not capable of that. They just weren't right. And then I've had some that were able to rise to different levels of, management.
[00:25:06] And I think being able to, I think it's a knack or a talent to be able to identify that light because you can't just give people intelligent tests.
[00:25:14] Nick: Although they, they do have some different tests out there. Now there's the wonder liquid, which I think is what the NFL uses.
[00:25:18] We use predictive index, which has a cognitive test and then also a personality profile matching, it's not an exact science, but it definitely provides another data point. Because hiring is probably the toughest thing. Even the sports teams get it wrong half the time, they can actually see the person playing on the field and they know from the other coaches, what type of person that individual is.
[00:25:40] And yet they still draft the wrong player or sign the wrong position. And we got to give us, give ourselves a little bit of a break too, because our managers and our franchise owners who view the leadership role as a blessing rather than a burden, I think are the ones that are going to see the most success because they embrace the challenges of turnover.
[00:26:01] They embrace the challenge, teaching their team members or empowering their team members to tackle new obstacles. They embrace the fact that maybe certain individuals on their team might have to be layered underneath the next layer of leadership. And so I think that's I think that's something that we got to keep reminding ourselves also as entrepreneurs.
[00:26:17] Jason: We've, we partnered here at DoorGrow for DoorGrow Hiring with an AI assessment company before AI was big. And it's pretty spot on and amazing at identifying people that are the right culture, personality, and intelligence level. I used to use Myers Briggs, human design, Wonderlic DISC, and I would get a pretty decent picture of a person incorporating all of these things, but I had to know all these different systems and and I can hire with pretty good accuracy.
[00:26:46] And so we started testing against this AI tool and it got the right candidate every time. And it was pretty obvious in the tool. We now use it with clients and it does a really good job. So it's pretty awesome. Very cool. That's how I got my current assistant, Mar, who's awesome. And I think all of our last several team members.
[00:27:03] Nick: So yeah, it's pretty cool. Are you able to share the AI tool or is that proprietary to you guys now?
[00:27:08] Jason: So we've partnered with a company called BRYQ, B R Y Q. And yeah, it's super cool. So it's usually not affordable for the small business owner.
[00:27:17] Nick: Got it. So you guys have like an enterprise platform for, because you do recruiting as well?
[00:27:22] Jason: Yeah, we help property managers with the hiring and recruit recruiting piece. 'cause if you get that wrong, that's a $10,000 minimum mistake. Minimum. And plus the opportunity cost of the money that you're just not going to get because they didn't do as good of a job. And I've seen it at the multimillion dollar level, most business owners just doing Russian roulette in hiring until they finally get a good team after a decade,
[00:27:41] Nick: I've been guilty of that myself.
[00:27:42] Jason: So me too. Yeah we're the summation of our mistakes when it comes to success. Super cool to have you here on the show. What should property managers know about the College Hunks Hauling Junk? How could that benefit
[00:27:54] Nick: them?
[00:27:54] Yeah. A lot of people don't realize that our college hunks business is nationwide. We have almost 300 franchise owners in that business. We're in about 40 States. And so that business is local moving as well as we call bulk trash removal. So it's not just homeowners that we're moving.
[00:28:10] It's not college campuses that we're moving, but we're moving anybody that's moving from point A to point B, whether that's a business, an apartment, a resident, a homeowner. And everything in between and we also do junk removal or bulk trash removal. So we're really the only one stop solution that can do both the move and the bulk removal as one brand, one company.
[00:28:30] And I think it's important for apartments and multifamily in general, because you want to know that the individuals and the companies that are coming onto your property are insured, have a reputable, accountable brand behind them. And so we've started to see a lot of traction with apartment partnerships where we've become this preferred mover for them to recommend to the residents in the moving leasing packets. So they know that, the trucks are going to be branded. The property is going to be protected. The elevators or stairways are going to be, wraps that are not damaged. The individuals are going to be properly insured, so there's no injury, no injuries, properly trained.
[00:29:09] We're not going to be blocking resident cars with the moving van, which, makes everybody upset. We've got a whole national platform and local platform for partnering with property managers. To be their go to solution for moving the residents in and out as well as the tenant leave behind the bulk trash removal, clearing out, for the turns.
[00:29:28] And whether that's, corporate removal or just furniture removal, we have a partnership with goodwill where we can donate anything it's reusable. So I think that's something that maybe a lot of property managers don't realize is our College Hunks Hauling Junk and moving business is a great resource for property management in general.
[00:29:44] Sarah: That's awesome. That was one of the things that was so frustrating is just waiting on the junk removal. Like it's finally vacant. Go! And sometimes they're like, "yeah, I'm a week out."
[00:29:55] Nick: Yeah. And we can do same day, next day. And look, there's going to be a wide range of prices on junk removal. I know that, there's a budget consciousness and property management.
[00:30:03] I get that. Anyone with the truck can come and claim to do junk removal, but he might not answer the phone the next time you call him, or he might be a week out or he might say he's coming and not come. We've got a national call center, a national booking platform, a national accounts program.
[00:30:18] So we've got responsiveness and that's something else again for your listeners. Nine out of 10 service companies don't even answer the phone. And so it's something as simple as just making sure the phone gets answered when people call if you've got a property management company, making sure your phone, you have somebody, even if it's an outsourced third party, answers the phone when your residents call or answers the ticket when, the client calls. That goes a long way. It's simple and often overlooked, but it gets back to what we talked about earlier about just being able to out execute what other people aren't doing.
[00:30:48] Jason: Yeah. That's the foundation of decent customer service is accuracy and availability, according to the Gallup polls customer satisfaction pyramid that they had in one of their books.
[00:30:59] And if you're perfectly accurate and perfectly available. They don't notice you like that's just default. They just assume that should be done. So it's a math that it's partnership and then advice. And so when you get to that level where you're giving advice, like you had mentioned, like helping them with their fees and helping them figure out how to make money off of this and get the NOI, that's where you're at an exceptional level is when you get to that peak of partnership and then advice.
[00:31:25] Nick, this has been a really cool, appreciate you coming here on the show. How can people get connected to College Hunks Hauling Junk and a Trash Butler?
[00:31:36] Nick: So the best way for Trash Butler, really simple, TrashButler. com and for our College Hunks hauling junk and moving business, really simple, CollegeHunks. com. So TrashButler. com, CollegeHunks. com, that's for the doorstep trash and recycling amenity as well as the moving and junk removal partnership opportunity and and look, I appreciate you having me on. I think it's awesome what you're doing to help, empower and motivate and inspire and elevate the property management industry because it's a great industry. And it's one that is right for people to continue to elevate and improve upon.
[00:32:07] Jason: Awesome. Thanks, Nick. Appreciate you being here on the DoorGrow show.
[00:32:10] Nick: Thank you.
[00:32:12] Jason: Thanks for being here. All right. So if you're a property management business owner, you're wanting to grow and scale your business.
[00:32:18] Reach out to us. You can check us out at DoorGrow. com or go to join our community and hang out with a bunch of property management entrepreneurs and find out if we're legit and see what everybody else is doing. Go to DoorGrow club. com, and hopefully we're talking and working together soon. Bye everyone.
[00:32:36] 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!
[00:33:03] 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.
If you’re a property manager, you know that property management is a tough and demanding industry at times. Property managers often feel pressure to make owners and tenants happy.
In today’s episode, property management growth expert Jason Hull sits down with Logan from Virtually Incredible to talk about how property management entrepreneurs can improve their company’s customer service.
[03:41] Making big impressions as a small business
[10:39] Does every other property manager suck?
[18:52] Things you can do to improve your customer service
[25:59] The importance of process documentation
[32:46] Importance of culture when hiring remotely
“If you are letting yourself get bogged down on the stuff that you can delegate and the stuff that doesn't need your immediate attention, you're going to be limited on the big impact stuff that really deserves your attention.”
“If you avoid investing cash, then you're going to have to invest more time and effort.”
“Phone calls are probably the biggest source of interruptions and the biggest source of staffing expense in a property management company.”
“Automation shakes hands with customer service.”
[00:00:00] Jason: Phone calls are probably the biggest source of interruptions and the biggest source of staffing expense in a property management company. And we've been able to cut some of our clients staffing costs in half just by convincing them to not do phone calls
[00:00:17] All right. Welcome DoorGrowers 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 in business and life, and you are open to doing things a bit differently then you are a DoorGrower, DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings.
[00:00:42] 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.
[00:01:19] And I'm hanging out today with Logan Breen of Virtually Incredible. What's up, Logan?
[00:01:25] Logan: What's going on, man. Thanks for having me. It's good to have you.
[00:01:28] Jason: So in our topic today, we're going to be chatting about small business, big impressions: mastering customer service for a professional edge. So before we get into that, Logan, why don't you give people a little bit of background on yourself? How did you get into property management? And give us some backstory.
[00:01:51] Logan: Okay. I'm third generation in property management myself. A lot of people might know my dad, Todd Breen. He is a pioneer in outsourcing and the property management industry. And I'm sitting today. I usually work from my home office, but I wanted to make sure I had a nice, bright background for our podcast today. So I'm sitting in our property management office here in South Florida. And I grew up with my dad being a one man show and running a small business without a lot of the automation and tools and outsourcing that has come with technology. And I can recall as a kid cleaning this same office with my sister. If we wanted to use the family company vehicle, part of our chores was to make sure all the office was clean and we would see stress pills and we would see a heart monitor what is it? Heart pressure monitors and stress tea remedies all over the place and we made a blood oath that we would never get into property management because it was way too stressful. And now fast forward to today, she's the broker at our management office and I'm helping hundreds of property managers across the U S implement the same best practice strategies, outsourcing strategies to make life a little bit easier.
[00:03:10] Jason: All right. So what was the consequence of this blood oath?
[00:03:13] Logan: There's a little bit of an exaggeration, but we promised that we would not be in the family business, but you know what? It's a complex business and we learned it just through working with dad growing up, we worked in a variety of ways in the management company.
[00:03:30] And with the tools of outsourcing and having a good team, it's not as stressful as it once was.
[00:03:35] Jason: Yeah. And now you're helping alleviate everybody else's stress, so they don't need stress pills and yeah. So let's talk about this topic, small business big impressions. And I think when entrepreneurs are starting a business, they all want to appear big. They all want to because their insecurity is they're small. Yeah. It feels small. And they're like, "people are going to know that I'm small. And if they know that I'm small, they're not going to want to work with me and trust me because I'm small." I remember feeling that way when I started my web design business decades and decades ago. And so I was like, "I got to make this sound really big and really official." like, you know, as openers, they're like adding the word group to the end of their business name. There's no group.
[00:04:17] Logan: That's great. Yeah. Yeah.
[00:04:19] Jason: So one of the things we would help with is we help them have branding website, like stuff to look like they are a larger, more established or more reputable company. And it does, it helps trust, but let's talk about customer service. How does this really play into people's perception and trust? And as everybody's heard me say on this podcast, a million times, sales and deals in this industry and every other happen at the speed of trust.
[00:04:47] Logan: I think you're right when you say that it's a mental thing as well, because there's benefits of being a small business and a level of personal touch that a small growing business can give somebody who's trusting you with their biggest asset.
[00:05:02] Depends on who you're working with, right? If you're talking about a big investor that has multiple pile of bricks that makes them a few bucks. If you're talking about somebody who, is an accidental landlord, that's just trying to be financially responsible with this asset they're trying to hold on to, having somebody they can get ahold of having somebody they can talk to, those are all strengths if you want to do a concierge side of thing, but regardless of how big you want to get and what your goals are, it comes down to time management. And if you're tripping over, what's that saying, tripping over dollars to pick up dimes if you are letting yourself get bogged down on the stuff that you can delegate and the stuff that doesn't need your immediate attention, you're going to be limited on the big impact stuff that really deserves your attention. And it's really going to help you meet your goals.
[00:05:53] Jason: Yeah, there's really this interesting dichotomy between the cheapos, as I call them, that are being cheap while trying to start a business in order to save money versus being smart and spending effectively so they can have even more money.
[00:06:10] Logan: Yeah. Yeah. There's definitely something to be said about, being smart with your money. It's something to look at. You need to monitor where your labor costs are going. For instance one of the biggest things we did at our management company. Is we started looking into the labor costs in our leasing on a micro level to where we're looking at each property, how much it's costing to rent it and the labor costs going towards it.
[00:06:38] And if you're not taking reports of your call volume per property, your super competitive properties are very likely exceeding your leasing fee, the labor costs to be able to rent them. So there's tools out there. And in fact, that's one thing we do at Virtually Incredible is when somebody is using phone tenders, or 24/7 call center, we give them a breakdown of their call volume per property.
[00:07:01] So that way you can look at, "okay, This really competitive three bedroom is getting 40 percent of our calls. We need to yank the phone number right off of that sucker because we're not going to make money losing money by exceeding our leasing fees on that specific one." And on the opposite side of the fact, if we're getting a really low call volume on a specific property, that's a perfect opportunity to tell your landlord, "Hey. You're losing more money than this place is sitting vacant." but if you don't take the time to invest in these tools and these procedures, and you're just spending money blindly or saving money blindly by doing it yourself, you're going to be time poor. Time poor is something you can't invest. You know what I mean? It's something you can't regain or build.
[00:07:41] Jason: Yeah. I talk about five currencies. I learned this concept from Alex Charfen and five currencies are time, energy, focus, cash, and effort. We have to invest some of these in order to grow and scale a business. And if you avoid investing cash, then you're going to have to invest more time and effort. But I think one of the biggest secrets that we have at DoorGrow is instead of time management, we get our clients focusing on energy management. We get them on which things give them life and energy and which things drain them. And the things that are usually the lowest level tactical type of work.
[00:08:19] It's not this strategic stuff of planning and being a visionary and dreaming about the business and learning new stuff. It's the stuff that's like detail oriented, nitty gritty stuff that should be offloaded and it's usually low dollar work, right? I think the very first person, any entrepreneur should hire, and usually they will get something the business needs.
[00:08:42] Not what they need. They'll get like a maintenance coordinator or they'll get something. But I think the very first thing that every entrepreneur should get is an assistant for themselves. They should take care of themselves and get rid of the stuff that's draining them because then they have so much more energy.
[00:08:59] And I think the biggest challenge I see in this industry and in any industry is that usually entrepreneurs in the early stages try to build the business around what the business needs. They started to build the team around what the business needs instead of building it around what they need. And so then eventually they end up with a business that maxes out their level of miserableness and they have an entire team.
[00:09:24] Yeah, so by default that means they have the wrong team because they should be getting more freedom and more fulfillment If they were doing it correctly. Even though they have more money, they have less of those things and so what we have people do to figure out what sort of assistant and what they could do is we just have them do a Time study and put plus or minus signs next to everything like does this give me life or take it away?
[00:09:46] Logan: I love that and you know. When people decide that they want to be an entrepreneurs versus have a J O B and, clock in, it tends to be because they want the freedom and they want the energy and then they end up giving themselves a job. And if you've given yourself a job, I wouldn't call that prime entrepreneurial.
[00:10:03] You know what I'm saying? Yeah. That's so cool. Yeah. Yeah. Yeah. Yeah. Delegation buys you freedom and it's a skillset. If your slogan is, if it's to be, it's up to me, you're giving yourself a glass ceiling. And so yeah, we're on the same page. I agree with you.
[00:10:20] Jason: Yeah. So why don't you let everybody know, how do we master customer service for professional edge? How do we solve this problem? Because customer service in this industry is generally considered to be pretty shitty. Yeah, property management has a bad rap. Yeah, most property managers I talk to, especially the startups and they always tell me, " I started this business because I had some rental properties and all the other companies sucked in my market." But it's never them.
[00:10:52] Nobody ever thinks they suck. Everybody else sucks. Yeah. So what do you think needs to happen there? Like, why is that?
[00:11:00] Logan: It depends on your goals. Okay. I talked to hundreds of management companies, maybe dozens every month, we'll say on what their goals are with their portfolio.
[00:11:09] If their goal is to have a not real demanding, residual income to just supplement a retirement or something like that. I would say, keep your current clients, the owners happy. And and, try to reduce turnover. So nobody's losing money. If their goal is growth and building, then it's going to come down to meeting the needs of your market. Now, what we're seeing in most markets right now is that our leasing market is getting back to normal. Okay. And what I mean by that pre pandemic, we had these seasonal fluctuations where summer was red hot.
[00:11:49] And fourth quarter and into the first quarter was a little bit cooler, and everybody tried to make their leases end in summer for quick turnover. And then 2020 was dead, but then 21 and 22 was a red hot leasing season. And people took leasing for granted. If you ask me. And what I mean by that is it was going to move, right?
[00:12:13] In most markets you were going to get that, and there's different theories as to why that is. I think part of it is people were a little weary to move if it was already in their agenda anyways in 2020. 'cause they didn't know what was going on. But then we had this super surge of a lot of different areas and people started working remotely. So they weren't really considering in 21 and 22 necessarily geography distance between them and their careers because a lot of people remote work when went way up. So I think that kind of played into it as well.
[00:12:46] But this is the first year that i'm seeing that we're back into this seasonal dip where people are having long times on market. And fourth quarter which to me is signifying business as usual again but you know a lot of people in my opinion treat leasing as their red headed stepchild because, you know when it's a healthy season, it's something easy to overlook as long as you know screen the applicants appropriately everything goes well. But when a leasing season gets tight that, separates the men from the boys if you will on how you're going to do it because when somebody's showing up and they need a property manager, it's generally not because they have a awesome tenant that's paying rent on time in place and they just are looking for somebody to split the money with. They're looking for somebody who's going to give them a good long term return on their investment. And when they're deciding who they're going to park their best investment with, they need somebody who's going to answer the phone and really juice every bit of leads when these tight leasing markets are happening.
[00:13:47] So that's one aspect. And then the other aspect, Jason, and I know this, in fact, we've talked about this before, but somebody who dumps a bunch of money and to getting management leads, but then lets those leads go to voicemail. Yeah. It's like cranking your AC all the way down and leaving the windows open.
[00:14:05] Yeah, that's a good analogy. Yeah, it doesn't make sense. We do a secret shopping campaign where we call management companies across the U S and we document how many of them answer the phones. And we call as both an owner. And as a prospective tenant and even for owner calls, which I would argue if scaling or even maintaining a door count matters to you, the management leads matter to you. And less than 50%. In fact, I think it was even less than a third. It's been a minute since I've looked at the numbers, but less than a third of people are answering that line live. So it's not really hard to stick out and do well. But if you're bogged down saying, "I don't want to spend any money," and "if it's to be, it's up to me," and "I'm the only person that's going to run the show," then you're limited and you end up letting what you consider low importance tasks fall off.
[00:14:59] And then, the cycle of suck that you just mentioned that nobody can answer the phone, give me good customer service. I'm going to start my own management company. You'll end up doing that to yourself.
[00:15:08] Jason: Yeah. It's a cyclical thing because if they're spending money on marketing and they're not answering their phones, and a lead's only good for maybe five, 10 minutes max, and then it drops I don't know, 80 percent in conversion rates, right? So then you're right. It's like leaving the window open with AC on. And then because they're spending all this money on marketing and they're allowing these leads to fall flat and they're not getting a good ROI, they're spending a bunch of money.
[00:15:34] Some companies spend 20, 30 percent of their revenue. And a lot, there's a lot of property management companies that don't even have that percentage of profitability in their business. And so they're wasting money on marketing. They're not answering their phones. And then that's going to lead to a lack of cashflow and a lack of cashflow means they can't hire good or enough people.
[00:15:56] And then there's bad customer service. And then it makes the problem worse. And for some reason they just bounce around like this rock in a tumbler rolling at the bottom when they could be flying, like it could be a lot better. And so that's interesting. So I'm curious what else you're, people that you're talking to are seeing right now.
[00:16:16] Are you seeing people in some markets, I've heard some complaints that it's becoming more and more difficult to get renters. Others, I think are like have a scarcity of property. And I think maybe it could be due to like migration. There's been a lot of migration, migrating happening due to, from COVID people gravitating towards States with more freedom.
[00:16:38] Logan: As far as the limitation of properties, that's going to vary a lot more market to market and I think that the higher interest rates on sales and deflating what sale prices are, is going to lead to more people holding on to their investments to regain their equity again, which I think that'll bring that back around if somebody's having a hard time finding accidental landlords who, for, I'd say the majority of our clients.
[00:17:07] I have people that work with hedge funds and people that work with big time investors, but would say the majority of our clients, our own management company is designed on the one off two off handful, maybe 34 units that somebody is a small time investor. And I think that for us has always been a good long term strategy of somebody just keep it being happy at splitting their money with and getting rid of the headache with a property manager So on that side of things, I think the interest rates are going to bring that back now when it comes to the leasing leads yeah, I do think politically and stuff like that, that can that likely has a lot to do with some of the inflows and stuff like that.
[00:17:45] But I think that we're getting back to the norm of people don't want to move during the holidays, especially you get up north of interstate 40. That'd be brutal to move in the winter up North during the holidays and in that time. And I think we're getting more into the steady flow. I'll tell you with leasing, I think that's a more quickly moving market, which is why those call stats that I mentioned before are so important.
[00:18:13] Like down here in Florida, we've had huge influxes and huge rate increases on both rent and own, and purchase prices. Yeah. Yeah. And being able to see the call volume in real time per property. Allows us to really make micro changes and what the market's doing on a seasonal basis and all that.
[00:18:37] Jason: Yeah. And that's from calls coming in on these vacant properties or up for rent properties that that your team are fielding. So this is an advantage using Virtually Incredible that you get data and metrics and insights that you just probably wouldn't be able to gather otherwise.
[00:18:52] Logan: Yes, it's a perk that we use.
[00:18:54] I'd imagine that somebody could make a system to do it. That is a big perk that our clients enjoy. Yes. Is that they get a call breakdown for their leasing calls per property and for mainline calls per caller type, for instance, at our own management company when we first started looking at our mainline calls, we noticed that current tenant calls made up almost 50% of our call volume. Meanwhile, we're using cutting edge management softwares with tenant interfaces, and yet people would still rather pick up the phone. So we took that insight and we created a newsletter that said " hey, it's in your best interest to be communicating with us in writing." In reality it's in our best interest too because we're saving on the labor costs and the time management and all that comes with it. But we were able to reduce that down to 12 to 15%. And if you're not looking at those stats, you're not looking at the opportunity to save on the labor cost.
[00:19:49] Jason: Yeah, it's interesting because phone calls are probably the biggest source of interruptions and the biggest source of staffing expense in a property management company. And we've been able to cut some of our clients staffing costs in half just by convincing them to not do phone calls and to figure out ways to do things through text and email so there's a record kept in a lot of instances. Now, and I've read some books on customer service recently, and nowadays people do prefer to be able to self serve like that would be better, but they always look for whatever's easiest. And if they can't figure out how to self serve easily, or they don't know, they're just going to pick up the phone because making a phone call seems like the easiest option. But a lot of people, especially the younger crowd today, they don't like talking on the phone to human
[00:20:38] Logan: beings.
[00:20:39] Automation shakes hands with customer service, right? So the more that you're able to supplement a "do it yourself," frequently asked questions, texting, whether it be, any interface like that with portals is absolutely great.
[00:20:57] And it allows you to have the budget for the customer service where it matters. For instance, you mentioned earlier, a management lead goes goes down in value you say in five minutes, I say in the moment that the voicemail is hit. The moment, because if it is a referral that you're getting, maybe that person wants to work with you more than anybody else.
[00:21:23] But if this was just a, if you're just a company they found online due to whatever marketing advertising, you have good reviews. That'll be a plus, obviously. But if they hit a voicemail, the immediate thoughts that they're thinking, "Is this company still taking on more management accounts?" Yeah. "Is my property even going to be a fit to their portfolio?"
[00:21:45] " If it's hard to get ahold of them right now, is it going to be hard to get ahold of them about my investment later?" And they're thinking all of that while they're scrolling down to the next lead and calling them. So yes, I think that having the do it yourself is key to be able to have the budget to put the customer service where it really matters.
[00:22:04] Jason: So what are some things that property managers can do based on what you've seen to improve their customer service directly? And then what are some ways in which virtually incredible could help do that?
[00:22:17] Logan: So it's going to depend on the goals and it's also going to depend on their size. Okay. Usually one of the first questions when I'm sitting down with a potential new client and I'm doing a outsourcing consultation.
[00:22:30] On what would be best for them is I get an idea of their team size, their door count, and their goals. So the two options that we then discuss from there is either phone tenders, which is our 24/7 property management call center that's divided up into three departments where we have a leasing call center where we pre qualify, answer questions, and schedule showings. We have a main line where we answer any call with custom scripting and escalation that would come into a management office. So we have custom scripts for current owners, current tenants, applicants, vendors, whoever would come in and however we can best assist them, answer their frequently asked questions, and escalate them to the right person if that's what they end up needing. And then we have the emergency repair where we're available for after hours maintenance emergencies to qualify the emergency and troubleshoot it with them over the phone, seeing if we can delay it and that sort of thing.
[00:23:32] And the cool part about that particular service is it, the minimum subscription cost is 97 bucks a month and you have 24/7 coverage on all of these departments. And then based on your usage, it can go up from there on a per minute basis. So somebody who is really wanting to grow, doesn't have the need for a full time person yet, and really wants to grab time management and and grab control of their life and their, their work life balance, that's a great first place to start.
[00:24:03] Then from there, if you have an idea that, "okay, I've got all my systems in my head. I really need somebody who isn't just fielding these calls for me and helping me with time management, I need somebody who's going to help me and executing processes and taking the process from what's between my ears and making a policy, procedure, and systems," because I'll tell you right now, most people that start their management company from the ground up, it all starts right here. It's all going to be between their ears and if it's to be, it's up to me because it's going to take longer for me to train somebody how to do it than it is for me to just do it myself.
[00:24:43] That's all the limiting beliefs that I find a lot of people who have not mastered the power of delegating, that's what's blocking them. That's what's limiting their imagination here. And so what we do is we train each one of our virtual assistants, how to take a screen recording, and we give all of our clients a subscription to Screencast O Matic or Loom or some other screen recording tool where they just demonstrate a process over the computer and it hooks up to their microphones. They dictate anything they're keeping in mind while demonstrating that process. And then our virtual assistant will review that video, create a step by step outline and then file it in their network next to the video to create a handbook process and procedure on everything they're doing. And it serves as a point of reference for our virtual assistant to be able to refer to later or it as this person scales, whether it be in their own.
[00:25:40] Whether it be locally they scale or remotely with remote team members and virtual assistants, this serves as a starting training manual. On everything that they do. So we're helping them bring everything from here and lay it out to really get over that hurdle of scaling.
[00:25:59] Jason: Yeah. I think it's important to get that first level of process documentation done, and a lot of entrepreneurs mistakenly think they need to do it when they're usually the worst person to do it. So it just show somebody how to do it and record it then they can give that to them and then give them the challenge of creating that process documentation.
[00:26:20] The second level after process documentation level two is like process checklist. This is where you're using maybe a tool like Lead Simple or Process Street or something where now people have to run through some steps and check things off to complete a process. And the third level is something like DoorGrow Flow. Which is a visual workflow and it has the ability to have checklist, but it's something that everyone understands and it's a lot more intuitive visually and workflows are how humans think about process or flow charts and so you're building a flow chart to build your processes. Anyone can check this out at doorgrowflow.com this is new but if you're following the process visually and you map it out that way, it's super intuitive. Everybody on the team understands it. And it doesn't have to just follow a linear path because a lot of processes in property management are not just linear. There's things happening concurrently. So there might be decisions to be made and building that stuff out in checklist based software is really complicated. You have to be like systems nerd. And then once you build that, no one understands it, but you. But if it's visual, it could be like, "do they have pets" go down this path. No? This way... back together." and so you can do more complicated stuff and everybody can look at it and go, "Oh, this makes sense."
[00:27:43] Logan: Yeah, absolutely. Getting that systems out in a way that's navigable, but navigable by everybody else. I'd say that's the biggest hurdle to scaling.
[00:27:51] Jason: Yeah, in order to scale rapidly, you need a really good process system. You need a really good people system for hiring. And if you're not, you don't have that developed yet and you're playing Russian roulette, it's good to start with some agencies to get help, right?
[00:28:06] Yeah. Your first initial hires, you're going to learn a lot just by working with agencies like virtually incredible because they're going to walk you through the process. They're going to ask you a lot of questions, things you haven't thought about yet. They're going to help you avoid some of the common pitfalls and mistakes.
[00:28:22] Like I call it the clone myth where everybody, when they're starting out, thinks they need to go find themselves. Yeah. You go find a clone. And later they learn that in order to actually duplicate yourself as an entrepreneur who wears every hat in the business, you need 10 people to actually clone yourself and not do anything.
[00:28:39] And so that's the clone myth. But then yeah, so I think getting all these things mapped out and then being able to get the help that you need early on. Then you can graduate to having your own hiring system if you want to but you're going to need really great people to help you run that as well.
[00:28:55] Logan: So when you're doing it yourself when it comes to hiring somebody remote, there's a couple big pitfalls that I make sure to talk with clients about because we have recruit direct options. So there's traditional virtual assistant placement is basically a version of a no compete contract, right?
[00:29:17] It's a staffing company that says, "I want to be the middleman forever and ever, amen. You'll never work with this person except through me." And then over the last few years, we've seen an evolution to like recruitment to where somebody helps you pick the right person and helps you with all the different processes, maybe some of the training and they do an initial upfront fee, and then you pay that person the hourly rate that they take home. And the pitfalls with that is there's only so much that's in their control after they hand you the wheel. So they give you like a 90 day warranty on turnover. And if hit bumps in the road and lose the person after that, start from scratch, you've got some of the training materials.
[00:29:57] "Here was a list of best practices. Good luck." And so that inspired our hybrid model, which is that people are welcome to work with our staff member as long as they like through us on a month to month basis. And if they ever decide that they like their person, but for whatever reason, they'd like to take advantage of the savings and work with the person directly or they don't see the value in the different tools and free replacements that we offer and they're welcome to take that same person they're experienced in working with and not only will we allow them to hire that person direct, but we will coordinate it with them and we will have an orientation and we will walk them through the process of offboarding from Virtually Incredible and onboarding directly with them. Some best practices and we do it at a discounted rate for the longer that the person has worked. With that person through us.
[00:30:52] Jason: Got it. So the longer they're using you as an agency to have this team member, the less it costs to buy out their contract or to have them just move over to paying you directly.
[00:31:03] Logan: Even less they have to pay if they use the promo code DoorGrow, where they get 5 percent off on the hourly rate and the per minute rate.
[00:31:11] Jason: Yeah, there you go. Say that discount again. A discount promo code is DoorGrow D O O R G R O W. And if you have any technical difficulties, just talk to Logan and he'll make sure it's it's applied for you when you're doing it, but it's pretty simple. There should just be a spot for it.
[00:31:28] Cool. So get your discount.
[00:31:30] So yeah, if you're in the early stages, you haven't had a lot of success in hiring, or you've been around for a while and I've seen larger companies, they're still playing Russian roulette when it comes to getting team members. And if you have not successfully had several experiences yet in the outsourcing, getting people from Philippines or Mexico or anything else, I highly recommend to anyone listening, you leverage an agency.
[00:31:55] They're going to help you manage that relationship. They're going to help you manage cultural differences. They're going to help you make sure there's a stronger level of accountability and they back it up that if they, you need to replace the person, they can help you do that quickly because there's a lot of potential pitfalls, a lot.
[00:32:10] Logan: There is. And one of the biggest ones that I see people that they just haven't even thought of is with the growing industry of freelance work and Fiverr and all these other things. You don't want what I would call a mini entrepreneur or a freelancer.
[00:32:28] Somebody who's building their skillset and then is going to just keep their resume out for a couple of bucks an hour more than what you're paying them. Because I don't care whether you're talking about hiring somebody local or you're talking about hiring somebody remote. Turnover is the most expensive part of staffing.
[00:32:46] Jason: Yeah, I want to own the team members attention if they're on my team. And so one of the biggest challenges I'll see when people are hiring freelancers, and I've hired lots of different types of people right in the past from lots of different areas. And I've learned the costly mistake of hiring people that are not focused on your business.
[00:33:06] If somebody is a freelancer, And they're working maybe part time for you and part time for somebody else. They have their primary focus is getting jobs. Their primary focus is their own life and business. Whereas if they are full time with you or dedicated just to you, even if they're part time, cause that's all the bandwidth they wanted to like to focus on you have their full attention. Their focus becomes your business, which is what we want. We want them to be focused on our business to help us improve our business, not constantly working on their own agenda and their business. And that's the big differentiator that I've seen. And I want team members that are thinking about DoorGrow in the shower.
[00:33:50] I want team members that are giving me their discretionary time, believe in what we're doing. And they're excited about it and they're doing something that they enjoy doing, right? I want them to be a culture fit for DoorGrow, personality fit for the role, and a skill fit, meaning they've learned what they need to do in order to be successful. And then we're winning and I think that's the greatest secret in business is that it doesn't matter how many processes you have, it doesn't matter how many KPIs you have, it doesn't matter how many metrics you throw at your team... if you want a team to perform well, it doesn't even matter how much money you throw at your team members.
[00:34:26] A lot of entrepreneurs mistakenly think team members behavior will improve if they throw more money at them or bonuses. And that actually tends to go get worse for most team members. That may be entrepreneurs and salespeople. Most people don't actually deep down like money. I know that sounds crazy. And so we need to make sure that we are building an effective team.
[00:34:47] An effective team is the secret sauce to having great customer service. That's the secret sauce, is to have a great team that like, buy into you, believe in you, and are not just what I call a hider employee, where their secret goal is to do as little as possible if they could get away with it, get paid as much as possible if they could get away with it, and complain about you and live for the weekend.
[00:35:10] Logan: Yeah. Yeah. One of the first things I ask in an interview regardless of the position is what motivates you? And it's super important to be able to speak somebody's motivation language. You throw money at somebody who cares more about work life balance or who cares about accommodations.
[00:35:27] A lot of people on my team we make sure that everybody's very well taken care of and money's not overlooked by any means, but reassurance and it's no secret that we do the majority of our hiring out of the Philippines and one thing that is a beautiful thing about their culture in the Philippines is how naturally it meshes with customer service and the wanting to please. Okay. And in fact, one of the training modules. that we have is that your job is not necessarily your identity, which means that when you have a tenant that is so frustrated because when they moved in and just spent all this money and it wasn't exactly how they wanted it, or, something happened and they need to they feel that they, that breaking their lease is the way they need to do it.
[00:36:23] And they want everything the way they want it when they want it, we found that a lot of our really rockstar virtual assistants that were just great were getting high burnout because their level of empathy with these people and having to enforce was just hurting, crying. And so we have a, "Hey, you're not your role."
[00:36:42] And when you're at home and when you're with your family and your friends. We love your culture and what you're driven to just always be such a helpful, great person and do that when you can, but it's okay to say no, and it's okay to enforce policies and to not take that personally.
[00:36:58] And until you understand the nuances of the culture that you're working with, if you're not working with a professional who has a leadership team that shares that same culture and values, you're going to have burnout that you don't even know why you're burning out. Because you'll hear. "Oh, I have a sick relative.
[00:37:19] Oh, I have to go move and I have to go take care of this and I can't work with you anymore because I don't want conflict and I don't want you to feel bad about yourself, so I'm going to tell you that I have to leave because of something that's out of your control and in my life." And so people are sitting there beating their head against the wall, not knowing why.
[00:37:37] Jason: Like, "why do I keep losing all these Filipino team members? Yeah. And they're all having all these problems?" No, the problems you and you need to be a better boss probably. Yeah. Yeah. Culture in a team and in a business is everything. You cannot have a great team without great culture like that. And culture, it means you shared values. You have to find people to share your values. Otherwise you have hiders and hiders are trying to get money from you and do as little as possible and, or they're going to quit and leave because they don't believe in you. They don't believe in the company.
[00:38:09] They don't believe in what they're doing. You need believers. Yeah Logan, this has been fun. And you've told us a little bit about phone tenders. You told us about your mainline service, the emergency repairs service. Line, it sounds like it's pretty affordable for people to get started.
[00:38:25] How can people reach out to Virtually Incredible and find you guys?
[00:38:30] Logan: So info at virtuallyincredible. com, Logan@virtuallyincredible. Com. My direct line is (561)-323-7039. I should be a better person to know our mainline office number, but I'll re I'll answer that one too. But it's on the website virtuallyincredible. com and if you are interested in the idea of outsourcing and you're not really ready to talk with somebody about it, but you're just curious. If you go on our virtual assistant page, we have something that's pretty interesting. We have a list of people. These are not examples. I'm not just shining up our brightest and best and and have a sample of resumes and voice recordings.
[00:39:14] We have a live list that's updated automatically every 10 minutes with candidates that are ready to get started and have already started training. And there's voice samples where you can hear what they sound like. And there are their resumes where you can see the difference experience and stuff that they have.
[00:39:33] And then there's a little note that mentions based on our experience, what their ideal role would be. It's like a catalog of humans. You can just go on there and listen to them. And
[00:39:43] yeah, that's pretty cool. It's just a job. Yeah. It's something that these people have already been vetted.
[00:39:48] We've already done all the background checks. We've already validated their resume, contacted their previous employers. And so if anybody on that list looks interesting then reach out to me, we'll chat about it and we'll start talking about scheduling interviews.
[00:40:04] Jason: So go to virtuallyincredible. com and start window shopping some virtual team members. All right. All right. Thanks, Logan. Appreciate you being here on the show.
[00:40:14] Logan: Thanks, Jason. Appreciate you having me.
[00:40:15] Jason: All right. So if you are a property management entrepreneur that wants to grow your business, you want to add doors, you want to figure out when is the right time to hire, how do I scale my team?
[00:40:25] How do I start adding and scaling doors without wasting any money at all on advertising? How can I do this? We have clients that are scaling rapidly. We just need really good property managers. So if you feel like you're a good property manager and you just need the right system. We've got the system and we call it the DoorGrow code and the DoorGrow code is our roadmap and our system for scaling businesses.
[00:40:49] It's like a martial arts style belt system going all the way from white belt, stepping onto the mat with your first door to yellow belt with your first 50 doors on and on until black belt, a thousand doors. And we confidently know that we can get you to a thousand doors in the next three to five years, even starting from zero, if you will follow the code and do what we say, you can do this. There's really only two ways to 10x the growth in your property management business. That's through acquisition or that's through doing our strategy of organic rapid growth. It's not going to be through advertising.
[00:41:25] It's not going to be through cold lead marketing. It's not going to be through SEO or pay per click or content marketing. So if you want a 10 X to grow through your business and be like one of our recent podcast guests, Kent Hardman, who added went from zero to a hundred doors in six months, investing only 10 to 15 hours a week, two to three hours a day towards making some phone calls, using our strategies.
[00:41:47] We want to help you grow, reach out to us. We can help you scale your business. And if adding more doors right now sounds uncomfortable or not fun for you. It means if you add another a hundred or 200 doors, it would increase your stress level. And you have a business that's not scalable. So reach out to DoorGrow.
[00:42:04] We can help you turn this around, turn around your team and turn this into a scalable business. You probably believe what we call the process myth, but it's not true. You don't just need more processes. You need a better team and we have a whole training on this. We're happy to give to you for free. Just comment on any of our social media, the word myth, or say you would like our process myth training.
[00:42:27] And we're happy to send you that for free. It might blow your mind and change your thinking forever. So reach out to us. We would love to help you figure out how to get more leads and how to solve the process problem in your business. And you will become infinitely scalable and you can grow rapidly. And just like our clients are doing. So we'd love to support you and help you out. Reach out to us at DoorGrow. com. Bye everyone.
[00:42:50] 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!
[00:43:17] 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.
The property management industry tends to get busier during the Summer months and slow down as the holiday season begins. The colder months are the perfect time for property management entrepreneurs to work on their business instead of in it.
In this episode, property management growth experts Jason and Sarah Hull discuss how utilizing strategic planning strategies can start your year off right.
[01:22] Utilizing the beginning of the year
[05:11] Making a plan “to escape property management hell”
[11:12] Strategic time helps you grow the business
[17:42] Using this time to maintain relationships
“Strategic time is what actually grows businesses.”
“As the world cools down, you should heat up.”
“If you lay the right foundation and you get really prepared during these cooler months, you can have an amazing growth season during this coming summer.”
“There's nothing in the business that you have to do personally.”
[00:00:00] Jason: If you lay the right foundation and you get really prepared during these cooler months, you can have an amazing growth season during this coming summer.
[00:00:11] Welcome DoorGrowers 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're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrower.
[00:00:28] DoorGrower property managers 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.
[00:00:47] 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. We are your hosts, property management, growth experts, Jason Hull, the founder and CEO of DoorGrow and Sarah Hull, the co owner and COO of DoorGrow. Now let's get into the show.
[00:01:15] All right. So we were talking beforehand, "what should we talk about on today's podcast episode?" And what did we decide?
[00:01:22] Sarah: We decided to talk about the beginning of the year. And getting a plan together.
[00:01:28] Jason: Okay. So I've noticed over time doing this for over a decade, helping and supporting property managers, that property management ebbs and flows. It obviously heats up in the summer. You can even see this on Google trends. It's funny. If you look at the history for property management as a keyword, every summer it spikes, and then it cools down in the winter, right? In search volume, even though it hasn't grown really over the last decade.
[00:01:54] And so what tends to happen is property managers, business owners, they get really busy during the summer, things heat up, things feel a little bit crazy, and then it cools down, and things get quiet, a little bit quiet. And what I've noticed is then the business owners start focusing on their business.
[00:02:11] Then what happens is some holidays come, they've got Thanksgiving, they've got Christmas, and they start to get a little stir crazy... new years. And what I find is when business owners have idle time on their hands... what do you think they start doing? They start working on their businesses, right?
[00:02:31] All of you crazy entrepreneurs. That's what you start doing. You're like, "I'm going to entrepreneur some more." So you start working on your business even more. And so this is the time, this is the season. It's November 28th at the time we're recording this. And so we just had Thanksgiving and now we're going into these cooler months and there's going to be a slow down, less attention on, the property management stuff for a lot of you.
[00:02:57] And that means you can be a business owner and you can start focusing on your business. Use this time. This is the season. This is the time for you to sharpen the ax, to make the business better, to improve things so that you can tackle and grow in the summer. Summer's the greatest time to be able to expand and grow your property management business.
[00:03:20] There's a lot more turnover. A lot of owners are looking for additional help. They're not wanting to do this stuff. And if you are prepared, if you lay the right foundation and you get really prepared during these cooler months, you can have an amazing growth season during this coming summer.
[00:03:37] Sarah: So this is a really good time when things are slow and quiet and calm, this is a great time to start a new project. Summer not so much. Don't be switching team members, if you can help it. Don't be changing the business. Don't be implementing new systems or "Hey, I'm going to change my property management software." July is not a great time for that right now is a really great time for things like that. The projects that would rock the boat, as I call it in your business, this is a perfect time to do stuff like that.
[00:04:11] Jason: So let's talk a little bit about planning, coming up with a plan. Because if you don't have a plan to succeed and you don't have a system that's going to work for you, then you might blow this season and waste it. And you're not going to have the growth or you're not going to get out of the day to day stuff that you've been holding onto for the last year and the year before that.
[00:04:35] And so the goal of a business, to remind you, is to give you more freedom. It's to give you more fulfillment. It's to give you a sense of contribution. It's to give you what you want and money helps with all those things, but you can make more money and have less of what I call the four reasons of fulfillment, freedom, contribution, and support. You should be feeling more supported in your business the bigger it gets. You should be feeling more of a sense of making a difference and contributing to others. You should feel more of these things. If you're feeling less of these things and it's becoming a grind and you're getting burnt out, you're doing it wrong.
[00:05:11] And so how do we make a plan to escape property management hell?
[00:05:15] Sarah: The million dollar question, right? I think one of the things that we do really well is, this is all part of DoorGrow OS, which is our operating system. If you are interested in implementing that system, you do have access to it, whether you're a mastermind client or not. You can see all of our softwares that we offer on our website.
[00:05:33] But the thing that really helps keep us on track is just our cadence. So we do our annual planning. We do quarterly planning. We do monthly planning. We do weekly commitments. And we do this all the time without fail. There's never a point where we're like, "Oh we just won't do weekly planning today."
[00:05:50] Never. We never do that. We always fit it in and this will help keep us moving forward. It will help keep us on track and it really sets the rhythm. And I will caution you against doing annual planning in January. Jason can talk a little bit more about that too. But if you just go into the new year, a lot of times, like this is just a fresh slate for us mentally because it starts a new, right? New Year's Eve. It's a new year. It's a new time. We're like, "okay, let's just forget about the previous year and move on." It's a clean slate mentally. So even if you're in the middle, like for us, this is technically the middle of our year. So January 1 is like quarter three for us.
[00:06:36] So it's like the second half of the year, but still it's like this mental refresh. So even though we've already done our annual planning in June and we're now just in the second half of the same year fiscally we still get that reset and we might go, "okay, let's just take a break, take a breath, regroup, and then let's look at things again" and you know, "are we on track? Is there anything that we need to do differently? Are there things that we're lacking? Are there things that we can change?" Because right now, being that it's a slow season. Now oddly enough, it's not a slow season for us. Because when you guys have a slow season, then we pick up a lot. But for you guys, it's a great time to regroup and say, "okay, is there anything that we need to change that has been like a thorn in my side for a while? Let's get a plan together, implement that plan and get it done now and really start that year off with a bang." Cool. So why would someone not want to do their annual planning starting in December because everyone's going, "what? Like that makes so much sense. It's the beginning of the year."
[00:07:47] Jason: Yeah, I think, the biggest reason is, during this season where entrepreneurs like to focus more on their business, your team focus less on the business because it's the end of the year. They're focused on holidays and family. They're thinking about like travel and like whether they're going to have funds to pay for all the Christmas gifts and all the shopping they've got to do. It's like they start another job. And so they've started this other job of family and travel and holidays and they're not as productive a lot of times we're not as effective or as efficient. And this then is where most businesses do their annual planning and try to hit their year end goals. And at the year end, we want to have a big push towards our goals. Property management naturally heats up, but in general this ebb and flow happens for every business.
[00:08:42] Things tend to cool down in the winter. And so what we want to do, what we do at DoorGrow and what we coach our clients to do is to offset by six months. And so we start our planning year on July 1st. And so that is the beginning of our first quarter for us in our planning year. And so if we do planning then in the summer, things are exciting.
[00:09:07] There's like plenty of movement. We can do things, we can get things done. The team is energized. The team's energized instead of checked out. They've got plenty of bandwidth. There's no like significant holidays, like right in the middle of, June and July that they're focused on. They might want to take some vacation time or like travel or something like this, but they've got the bandwidth.
[00:09:28] When it comes to Christmas and the holidays and thanksgiving and New Year's and all of this time period for us is just the middle of the year. So it's just a great time for us to as business owners to do a reset, take a look, "how are we doing towards our annual goals?"
[00:09:44] Are we making progress? What do we need to adjust? And so we're just making adjustments. We're not trying to like, get the team to finally hit some goal at the end of the year.
[00:09:54] Sarah: "Hurry up! We still need 28 doors to get our goal, and we only have 32 days to do it." The team is like, "I don't care, man" At this point. It's not that they're completely done, but they're tired.
[00:10:08] And the other thing that we have unfortunately, no control over is the weather. That's a real thing. Like once the weather changes and things get a little colder and the days get shorter because for whatever reason we still do daylight savings time. Somebody seriously has to change that by the way, but it really has a physical effect on our bodies and we will just naturally start to slow down a little bit with the weather.
[00:10:36] Like animals, they go into hibernation. We're mammals too. This is what mentally we start doing that a little bit. Now, It'd be great if we could just check out and hang out in a den for three months and come out in springtime But our minds do this especially right around the holidays because we kick it off with Thanksgiving, then we get into Christmas, then we get into New Year's, the weather's cold, the days are shorter, It's the end of the year. Everyone's tired This is not a great time of year to be like, "rally the troops guys! Go get them!" Not going to have great success there.
[00:11:12] Jason: Yeah. And this is a good opportunity, when things cool down and your team are a little bit more focused on their personal lives and things are shifting, this gives you a lot of space and a lot of bandwidth to really focus on what you want.
[00:11:26] And so I would say is that as the world cools down, you should heat up. Like you should then step more into that strategic role of being a business owner instead of being an employee in your own business, which you're doing at least half the time, probably, or more. Now you can get out of that daily tactical stuff a little bit more and start to focus on strategic. Strategic time is what actually grows businesses. Tactical work, emailing, calling, that's not really what grows or moves companies forward. It just keeps them alive. But what helps is innovating, moving the business forward, planning, scheming. This is your time to be able to come up with a plan, come up with an idea. And if you don't have a really solid plan, you don't know how to 10X your growth over the previous year.
[00:12:14] Like you're like, "that sounds impossible, Jason. I don't have a clue. Like the last year before that, we've had maybe consistent growth. Maybe it's even slowing down. We don't know how to 10x it." Then you need a better system and you don't know what you don't know. So you might want to reach out to us and maybe it's that you just want to get out of the day to day. You're like, you're really starting to feel burnt out. Look at the future. Can you do this for another five years? Can you do this last year for another five years? You may have been doing this for five years already.
[00:12:44] Sarah: Can we do groundhogs day again and again?
[00:12:47] Jason: Yeah, and You know that probably feels like a grind if you're not enjoying if you didn't enjoy last year, if you weren't like, "hey I love this. This is amazing," Then you're probably doing it wrong and it's pretty wild to see how quickly we can shift clients' businesses to restructure their business around them and allow them to have more freedom and more fulfillment and more contribution and more support and help them get a better team, help them get better systems, and then they're enjoying their life.
[00:13:17] There's nothing in the business that you have to do personally. There's nothing that you have to hold on to. We can build this business around you and you just hold on to the pieces that you really enjoy or that you really love, or they give you momentum. And very few of you really, if you could just do nothing would really enjoy that.
[00:13:36] You might be telling yourself that right now, because you're burnt out, but what I find is once clients are in alignment with the things that they actually enjoy doing, then they no longer hate their business and they start to enjoy it and it becomes a source of life for them. That's fulfillment. And that's what freedom feels like.
[00:13:56] And then they want to benefit others, and that's contribution. They want to start contributing to their team. They want to make everybody's life better. And what you'll find is if you get in proper alignment, then you can build the right team around you, but you can't build the right team around the wrong person, and you've probably been showing up as the wrong person for a while now.
[00:14:16] And it's time to shift that, and it's very doable. We have a process for how to do this. We have clients do a time study. We figure out which things energize and drain them. We then take all the things that drain them that are very tactical, and we create new job descriptions for new hires for this, or we give these things to existing team members.
[00:14:35] And then we create a plan to get the business moving forward, either related to growth or related to systems, so that the business becomes scalable. And then, You start to see there's light at the end of the tunnel and business can become really fun. It was fun when you started it. It was exciting. It was new.
[00:14:53] You had belief in what you were doing. We want to get you back to that.
[00:14:57] Sarah: Yeah, for sure. So if you're feeling the stress and the overwhelm, then you're holding on to things that you probably shouldn't be doing at this point. We have one client who just, he still won't do it. He knows what he needs to do, but it's so painful for him to do. And he's "I can't fire my team. Can't do it." When he does make that leap, I'm telling you, it's going to be night and day for him. But when you have the right things on your plate and when you have the right people surrounding you in the business, and they're on board with helping you like move the business's mission forward, not just "Hey, I'm clocking in and I'm here to do a job."
[00:15:35] Everything is different and everything is easy, which is crazy to think in property management that it can actually be easy, but it can, as long as you're building things the right way.
[00:15:46] Jason: Yeah. A lot of property managers see the pain and the challenge that they have right now. And maybe you have a hundred doors and you're like, "this is tough."
[00:15:53] Or maybe you have 200 doors, like, "this is tough." And so what ends up happening in the back of their mind, they see "if I had another 100 doors or another 200, or I doubled the size of my business, it would be worse. It would be harder." But if you do it the right way, it actually gets a lot easier.
[00:16:10] In fact, the bigger you get, the easier it can get if you do it the right way. Because you can get better and better team members. You have more resources. You can get better and better tools, right? You have more and more leverage if you do it the right way. And property management can be death by a thousand cuts, especially if you have a thousand doors, or it can be a really great systemizable business that you don't have to be super involved in the day to day, if you're the business owner, especially the larger you get.
[00:16:40] And this can happen at any stage. At any stage, you can be miserable or you can be enjoying yourself. And we want to make sure that we get you towards enjoying yourself, because what you'll find is when you are in alignment with the four reasons, your team members then have a chance of doing it, and it'll be a lot easier to help them get in alignment with the four reasons.
[00:16:59] And then you'll probably get two to three times the output from those team members. Because they'll be on fire, they'll be excited, they'll be in momentum, they'll have a sense of fulfillment and freedom and contribution and they'll feel supported. And you will get a lot more out of those team members than you do out of the ones that are just grinding every day.
[00:17:20] So right now is the time, it's time to make a plan. And if you need some help making a plan or you need a really good system or your current plan is to do whatever you did last year or just wing it, then that's not a great plan. So you need a better plan and we can help you come up with a better plan here at DoorGrow.
[00:17:38] So anything else we should say about this season? I don't think so. So I think this is also an opportunity to check in with your owners, reconnect with your clients as you move through this season, since things have cooled down a bit, this is a time that you can re establish the connection and in those relationships to increase the lifetime value of your clientele and to decrease churn and so this is as things cool down, as things are a little quieter, feel free to show some care and leverage the holidays to reach out to your existing clients and just let them know that you care about them. Wish them happy holidays, merry Christmas And Happy New Year's and let them know that you they're in good hands with you. And this is an opportunity right now also to increase future revenue through retention and decreased churn. So I think that's pretty good for today.
[00:18:33] Sarah: All right. Cool. That's my topic for this week's scale call. You must've heard me talking about that on last week's.
[00:18:39] Jason: I did. I heard you mention it. You talk loud. I'm just kidding. All right. So if you are a property management entrepreneur, you're wanting to add doors, you want to grow your business, you want to get out of the day to day, you want to make your business scalable so that adding more doors does not make your life personally worse. Reach out to us at DoorGrow. We can help. We help people like this all the time and we just get better and better every year. So if you have been listening to this podcast a while, or if you are a past client for maybe two, three, four, five, something, many years back, even one year back, even one year back, we've changed super system a year ago, right? We've changed any of that a lot and we've taken the things that have helped us scale our business and we are now leveraging these to help scale our clients businesses and it's working incredibly well. So I'm obviously biased, but I think we have the best stuff for the property management industry. I don't think there's any other coaching or mentoring or consulting that can touch what we're able to achieve with our clients. Our clients are crushing it.
[00:19:42] And we can help them through every major issue or problem that they're dealing with, whether it be the op stuff or whether it be adding doors. Our clients are crushing it. So reach out to us. We want to make you our next success in our next successful case study. Hopefully we're talking to you soon. Go to DoorGrow.com. Join our free Facebook group community at DoorGrowclub.Com. And hopefully we're talking and working together soon. Bye everyone.
[00:20:11] 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!
[00:20:38] 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.
One of the biggest questions we get from property management business owners once they start building out their team is “How do I compensate and recognize my team members?”
In this episode, property management growth experts Jason and Sarah Hull discuss the different kinds of compensation structures for different personality types and roles on your team.
[02:15] The difference between you and your team
[07:56] The problem with giving out percentages
[12:13] How to set up commission structures
[21:23] Recognizing your team effectively
[25:44] Giving out raises and job titles
“Business is a more effective vehicle than even a charity at creating lasting and impactful change.”
“When you dangle the carrot in front of a great salesperson, they will jump off a freaking cliff to get it.”
“Your discomfort in giving somebody a raise should be equal to their discomfort in asking for it.”
“Recognition costs nothing.”
[00:00:00] Jason: They need to be invested in like committed to helping you grow this business and helping you move it forward, otherwise they are just dead weight and you're creating a bigger and bigger monster of dead weight as the business grows.
[00:00:14] Welcome DoorGrowers 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 DoorGrower.
[00:00:31] DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many 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. We are your hosts, property management, growth experts, Jason Hull and Sarah Hull, owners of DoorGrow.
[00:01:11] That good? Now let's get into the show. All right. We were trying to change the intro right before we did it. And sometimes she's not on it. Sometimes she is. She's mostly on it now. So. Anyway, here we are. So our topic today, I'm getting a lot of questions, a lot of questions, and this has been going on for a long time, but we're getting a lot of questions about compensation.
[00:01:37] This just keeps coming up and we see a lot of mistakes when it comes to compensation. So the challenge with compensation is that entrepreneurs think differently than most people that they are paying, and so they make mistakes in how they compensate people because they think it's going to help them get more of what they want and they actually create the opposite.
[00:02:00] And so I want you to pay close attention to this today. If you watch this you should not ever ask if you should be giving out a commission or percent sign to somebody or whatever So let's talk about a couple of things here. So where should we start?
[00:02:15] Sarah: Well, I think the best place to start is probably from just for background.
[00:02:20] What is the difference between someone who has a sales mindset or entrepreneurial mindset versus someone that may not.
[00:02:30] Jason: Cool. Let's talk about that. The two types of team members that you're going to have. There's two types of people on the planet, those that like money and those that don't. And I know you're thinking, "man, no, everybody likes money."
[00:02:42] And you'd be surprised. And so if you had all of your team members take a DISC assessment, there's usually on a nice DISC assessment, a section called the values index. And one of those values is the economic or financial score. And so on the economic or financial score, what you will see is that the score is low, then they don't like money.
[00:03:04] And I know that sounds weird. They're not focused on money. They're not trying to get money. Money is not a big part of their psyche. It's just not. And I know entrepreneurs, you don't get this because you like money. Sarah and I do not hate money. We don't hate money. Okay,
[00:03:20] Sarah: I need that shirt. This is the one t shirt.
[00:03:22] I'll wear the capitalistic pig shirt
[00:03:24] Jason: Right and so we don't hate money. You probably don't hate money either. If you do hate money and you're an entrepreneur Then you are probably struggling to have money, right. Money is the ability to change lives, make a difference and have impact. This is why business is a more effective vehicle than even a charity at creating lasting and impactful change in my opinion.
[00:03:47] Okay? Because it has healthy motivators connected to it. Right. And money is the energy and currency of what everything moves through to happen. Right. So let's talk about this. So if the economic score is low, what does that mean? I'll tell you whose economic score is high. If your economic score is high, you are probably an entrepreneur or a sales person, right?
[00:04:11] Those are probably the only two personality types or people that you should be paying out more money or bonuses or commissions to incentivize better behavior. That means most people, you should not be paying bonuses, additional financial compensation to try and motivate or change behavior. Now, if you just want to be generous and it's Christmas, that's different.
[00:04:36] But if you're trying to consistently compensate somebody and motivate them, the motivators need to be connected to what your outcomes are and most people are doing it incorrectly. Now, if the economic score is low, this is what this means, they would rather what they most value is recognition. They would rather be recognized.
[00:04:55] And recognition costs nothing. It costs nothing. And if you don't give them recognition, but you give them bonuses, it's often the opposite, it has the opposite effect. There's another values index called the charitable score. If they have a high charitable score, which means they might want to volunteer to soup kitchen.
[00:05:14] They want to like donate money. They want to give money away, not get money. They want to give money away. And then they have a low end economic score. That means if you pay them more money than what is comfortable for them. You pay them more than that. They will start to become a worse team member. They will start to self sabotage because they feel guilty. And then they're going to project that and externalize it because they have to justify it. They're taking more money. They don't want to give up the more money, but they feel guilty. If Sarah was my boss, it'd be like, "Oh, Sarah's giving me more money. Well, all right. I have to be worth this. So I'm worth this more money. And you know what? I'm entitled now. And maybe I deserve even more because I'm developing this kind of cancerous blind spot of I deserve this money because I feel guilty. So I externalize it. And I blame that uncomfortable feeling on my boss. Oh, well, my boss is like terrible and doesn't do this stuff. So I deserve that more money to compensate for it." And so they start to find fault with the boss and they start to justify them taking this more money cause they feel bad so that they can feel somewhat okay about it. And then their behavior starts to show that and they start to perform worse.
[00:06:23] I know entrepreneurs, you're like, "that makes no sense." But that's how a lot of people think. Most people do not enjoy seeking money. This is not their goal.
[00:06:33] Sarah: There is a caveat team members, they have to have enough to be comfortable, right?
[00:06:38] Jason: If they're starving, broke or hurting, they're not comfortable.
[00:06:42] Sarah: In pain or like worried, like, "Oh my God, I might lose my house or I can't feed my kids."
[00:06:47] Like. Yeah. We're not saying, Hey, like give them no money, they'll work for free. That's not the case at all. Right. They have to have enough to feel comfortable to make sure that their needs are met and make sure that they're able to provide for themselves and anyone else or anything else that is important to them.
[00:07:02] Once they reach that level though, and I think studies have been done on this, which is really interesting to me I don't know if they just surveyed Americans. Don't know, but I think $75k was like that magic number or $65k. It was something like that somewhere in that ballpark is that's like where people feel like they have most people feel like they have enough.
[00:07:25] So once they feel like they have enough money to live and be okay and make sure their needs are met and bills are paid and things are taken care of and like Johnny can do soccer and whatever they, you know, they want to do, they don't then go, "well, now I want a hundred and now I want 200." They don't keep trying to climb that ladder.
[00:07:46] Once they feel comfortable and they have to make sure that their needs are met, then they're not interested. So if you take it from 75 to a hundred, they're like, "it's okay."
[00:07:55] Jason: Okay. So the other piece to this, another challenge that I see is that because business owners want people to have skin in the game and they want them to, they think everybody wants money, they hand out percent signs.
[00:08:08] This is one of the most dangerous things to hand out. We even made a silly video called, what's it called?
[00:08:13] Sarah: I think it's called Percentage Breaks the Property Manager for the Property Management Business.
[00:08:19] Jason: Yeah. So you can check that out on YouTube. But the idea we're playing this, these roles and I'm a business owner and I don't have money in the beginning, so I'm going to pay her a percentage of all the doors that I get in.
[00:08:29] We made it ridiculous, like 50%. Right? Which means if you're handing out a percent sign, and we see this all the time, say Sarah's my employee and I'm the boss, and I hand out 50% or whatever to a property manager.
[00:08:42] Sarah: Or even if you're like, "okay, here have 30," because like even 10, 30, 40, I still, I see the that a lot.
[00:08:48] Sometimes I see 20.
[00:08:50] Jason: It doesn't matter what the percentage is, right? The challenge is in a business, some property management companies don't even make 10 percent profit margin. And so handing out percent signs is really dangerous for businesses. So what they'll do is hand out a percent sign. So let's say I give her 50%.
[00:09:06] That means my 50%. My, the other half, all of the expenses have to come out of that. And usually if a business has 50 percent profit margin, that's pure expense. So then I'm broke. So what happens is she's making more and more money because she has all upside. It's pure profit. And I have all the expenses do not give a percentage to a broker.
[00:09:28] Pay them a flat fee of like five, 600 bucks. Do not pay a percentage of broker. If you don't have your broker's license, don't create relationships or situations where you are giving up a percentage to a property manager. "Hey, you get like 50 percent of each door that you get on when you get a 30 percent of each door," whatever, right?
[00:09:46] Because then what happens is these property managers, if they're the personality type of handling property management, instead of doing sales, they are not going to be focused on getting more business on. They're going to be focused on just helping run the business and you're giving them more and more money the more doors you get, which means you're making less and less money, right? They're making more and more money, the more doors that you get. And they will get more and more lazy and more and more comfortable because there's no incentive for them to go work harder or hunt or chase to get money. You need to make sure if you're handing out a percent sign in any capacity, that's like giving out ownership of the business and they need to be invested in like committed to helping you grow this business and helping you move it forward, otherwise they are just dead weight and you're creating a bigger and bigger monster of dead weight as the business grows. This is why a lot of people join a franchise and then regret it later on because they're paying out six to eight percent, which is a lot, of their gross revenue not of profit not of what's left over for you. And some business owners.
[00:10:56] That's their whole owner payout. Yeah, that's like top one. Some business owners, that's what they take out like you're giving away that to basically to a team member that's not really adding value. I could go on and on about franchises. You can check out my YouTube video about franchises.
[00:11:12] I'm obviously like not a fan of the franchise model because I believe it hurts the entire industry. There he said it. All right. So don't hand out percent signs. Do not get into a relationship with a business partner and give them a percent sign unless they are the type that wants to hustle and grow and make money.
[00:11:33] The challenge is I see a lot of business partnerships are like, "here's a percent sign" when they should have just said, "here's your salary. You can be the operator." So operator personality types, for example, systems, process, whatever, they don't usually want ownership. They're not often that entrepreneurial type.
[00:11:51] They just want to make sure they're getting paid enough and taking care of enough. Now there's exceptions to this, right? But you don't want to be handing out percent signs to somebody unless it's like super critical for growth. And I do not recommend. I recommend in any way possible, don't hand out any percent signs to anybody ever except to yourself and maybe a salesperson.
[00:12:13] Now, let's talk about commissions, right? Let's say somebody is money motivated and they can help you make more money. So if they're money motivated, then you need to be using them to help you make more money. If you're going to pay them a percent sign, but you're not going to pay them a percent sign residually.
[00:12:30] Because then you're motivating them to not do more work. What you want from a good salesperson or a BDM, a business development manager, or a BD business development person. What you want from them is what? You want results, which is more doors. You want them to add more money to the business. That's the result you want.
[00:12:49] So you're going to pay for them to get more business, not keeping the business because keeping the business is the rest of the team. And that's fulfillment. So don't pay them a percentage residual. You pay them a percentage of maybe the first month or the, like some sort of commission upfront.
[00:13:07] And it could be a percent, or it could just be a flat fee. Like, "Hey, we'll give you 200 bucks or 300 bucks or 500 bucks or per unit that you bring on." and give them an incentive. So that means they have an incentive every month. They stay to hunt and to chase. Now, another mistake people make with salespeople is like, "I want to get a salesperson, but I want to have zero downside and I want all the upsides.
[00:13:33] So they create another unfair structure where they're like, I will pay you pure commission. And if you don't hunt and kill, you starve. And if you hunt and kill, I make money and we both make money." so I need to address this. That only makes sense if you are giving the salesperson, all of the leads, they have a great follow up and nurture system, and all they do is show up to calls and close.
[00:13:56] Sarah: Now, can you clarify what giving them the leads means? Because you're like, "Oh here's the leads. Like, here's a list of 10, 000 people."
[00:14:04] Jason: Okay. That's not what I mean.
[00:14:05] Sarah: So yeah, exactly. So let's clarify that.
[00:14:09] Jason: Okay.
[00:14:09] Sarah: So 18, 000 people in my CRM. Here's your leads.
[00:14:13] Jason: If somebody is going to be paid pure commission, which means they're just paid for basically closing deals, they should not have to go find potential clients. They should not have to be hunting for potential clients. They shouldn't be spending any time doing any of that stuff. They should just be taking appointments, somebody else scheduled for them and closing deals.
[00:14:33] Then they're a closer. Everything that happens before that would be handled by a setter and the setter would be cold calling, following up, like all this stuff. Setting appointments. Setting appointments, rescheduling.
[00:14:46] Sarah: Making sure people show up. They don't show up. Right. Calling them again.
[00:14:49] Jason: Feeding the closer.
[00:14:51] Feeding the closer. Then the closer can be peer commissioned and the setter would be paid a base, mostly a base, plus a small percentage for each like appointment they set or some sort of results. So they're motivated to get more results and they should be a little bit money motivated, right? Now, most people are going to hire a BDM and expect them to do both.
[00:15:11] And if you're going to hire a BDM and expect them to do both, you need to pay them a base. I would recommend at least maybe 20 to 30 K, something like this of a base that covers their setting activities. And then they, the rest, they should be able to make somewhere annually about maybe six figures should be possible.
[00:15:30] So work it backwards, but there should be a commission structure that if they're adding 10 to 20 doors a month, they should be able to make. Some sort of six figure sort of salary would be the goal. So figure out a commission on top of that base. Because what you're doing, if you say it's pure commission, you're expecting a closer who lives or dies by whether they hunt or kill and create some money, you're expecting them to starve for at least two months, usually. Because usually three. Because it takes about 90 days to build up a sales pipeline. So they're going to have to do networking and prospecting and outreach and they're working for free and. If they're starving for 90 days, they're just going to quit.
[00:16:10] I've seen so many BDMs burn out and it sounds like this great model. "Well, I'll pay you basically nothing in the beginning." And you might get somebody to agree to do that, but they might be stupid if they're willing to do that. And then they're going to be like starving and not figuring it out. And then you don't give them a good system.
[00:16:26] If you plug them in to DoorGrow, we can get them making a lot of money. We have an amazing system. Like we had a client in just 10 to 15 hours. We go from zero to a hundred doors in six months. And he didn't spend any money on ads and he was a solopreneur. He was all by himself. This is absolutely possible.
[00:16:44] We can help BDMs crush it. We've helped some BDMs add two- three hundred dollars in a year. That's absolutely possible to do but they need to be able to dedicate their time to that and you are not going to get that kind of result if you just pay them a commission because they will only focus on the closing type of activities or the commission generating activities, and they won't do what the leading activities that actually generates the opportunities to close.
[00:17:12] And so you're putting too much attention on the wrong thing. They need more attention. Most of the attention should be on the leading activities. Phone calls, outreach, networking that leads to this and then deals will happen. They don't even have to be super amazing at closing if they're doing enough leading activities And so we want to make sure we give them a base and then we give them an incentive to move those things forward.
[00:17:35] Sarah: Okay. Now with the base, this is the big one. "Well, how much is the base supposed to be Jason? I don't know?"
[00:17:41] Jason: 20 or 30 K. Maybe
[00:17:42] Sarah: You need to find an amount that would be uncomfortable if that's all you made. It needs to be comfortable enough that if that's all they made, they're not going to be starving and eating out of a dumpster.
[00:17:58] And it needs to be uncomfortable enough that if that's all they made, they wouldn't be happy and they would be hungry for more.
[00:18:06] Jason: They need to be hungry. They got to be motivated. It's financial compensation is all about motivation, right?
[00:18:13] Sarah: With a salesperson, when you lay out their commission structure and you let them know like, "Hey, this is your base and I'm giving you this base because of these reasons. I don't want you to be starving. I want you to be motivated. The real money, it's over here. This other piece, I'm going to give it to you because there's things like phone calls and settings and appointments and you know, all the stupid crap that you don't want to do, but that you will do because it leads to deals."
[00:18:38] And they're like "yeah, I get that. But the real money is over here. So when you close deals, that's when you start to make money." And when you dangle the carrot in front of a great salesperson, they will jump off a freaking cliff to get it. The problem is if you just give them the carrot and you're like, here, have a 50, 000 base, have 100, 000 base, have a 200, 000 base.
[00:19:03] They're like "Yeah. I don't need to work that hard. I mean, if I do nothing, I still make 50k." We just at the boardroom event, we had a client whose BDM has a 50, 000 base.
[00:19:13] Jason: And then he was wondering why they weren't super motivated.
[00:19:16] Sarah: She doesn't really, she closed like two doors a month. And I'm like, well, yeah, cause she's comfortable.
[00:19:22] She's super comfortable there. So she's never going to be motivated to work harder and do more and stretch herself and go above and beyond. Because she doesn't have to, you gave it to her. I have to work for it. There's a difference. And the other thing is salespeople who they love the challenge. They don't want you to give it to them.
[00:19:43] They don't want it. Like they'll tell you like, "Oh, I'll take 500, 000 a year for doing nothing." But they wouldn't really be fulfilled by that. They'll probably take it because they love money. I mean, who doesn't, but they wouldn't be fulfilled by it. Yeah. If you give them 500, 000 for doing nothing versus if they make 500, 000 because of the work that they did and because of their efforts, there's a big difference.
[00:20:06] They're going to feel really proud of that and they're going to want that. So they're going to chase it. So you have to dangle the carrot and make it something that's interesting enough. You have to, you, and you have to set it up so that they have the ability to make at least six figures because that's what sales people want But don't just throw it to them.
[00:20:24] Jason: And to be clear No, bdm should be making five hundred thousand dollars.
[00:20:28] Sarah: That's not accurate at all.
[00:20:30] Jason: There's really great bdm. Maybe if they're helping do some acquisition deals If they're adding 500 a year, maybe all right So but if your bdm can live comfortably without adding 10 doors a month, your commission structure is wrong. They should be minimum adding about 10 doors a month as a full time BDM minimum.
[00:20:52] And they should need to do 10 doors a month in order to just reach comfort. And if they're really motivated, they'll do even more than that. They'll do even more than that because then it gets exciting, right? Then it's the game, right? It's the hunt. Okay. So we talked about compensation.
[00:21:08] Is there any other challenges or mistakes we see people make compensation wise?
[00:21:13] Sarah: I think those are the big ones. I think let's though, before we wrap up, let's talk a little bit more about the recognition piece and then we'll close it out. Okay. Because people are like what do you mean recognition?
[00:21:25] Like, "Hey, I see you."
[00:21:26] Jason: So recognition is a process of just helping the team members be seen, especially in front of other team members for doing good things or accomplishing things. So the way that we do that in DoorGrow and in our operating system, DoorGrow OS. Maybe you've heard of like EOS or traction or some of these things.
[00:21:43] DoorGrow OS is better. And what we do in DoorGrow OS to increase the amount of recognition is in every meeting we share wins. So if it's our weekly commitments meeting, we're sharing what wins did we have last week and everybody adds to the list. What did we do in our monthly goal setting?
[00:22:03] We share wins for everything we did the previous month. Same thing with the quarter and annually, and it's pretty awesome. Like, we're building these lists and everybody feels great. And then even in our daily huddle meeting, which is like a 15 minute, 20 minute meeting we do every morning, I guess we do ours in the afternoon, but we do with our team.
[00:22:21] We do Caught Being Awesome and we allow team members to share their wins or to highlight somebody else. And so our team are highly motivated because most of them are recognition motivated. So we're recognizing them. If we do give a bonus, like say for the holidays or something like that, we do it in a way that the focus is we wanted to recognize you because of what you've done for us this last year. So it's still about recognition and appreciation. And so that will get you team members that are incredibly loyal to you, that love being part of the team, that feel a sense of belonging, and that means a lot more to most of your team members than getting more dollars.
[00:23:04] Is that good?
[00:23:04] Sarah: They want to feel important and they want to feel valued and they want to know that you care about what they're doing and especially in an industry like property management because it's tough. Yeah. Everybody has those like really awful days because let's be honest, sometimes owners or tenants or vendors and sometimes life just happens, right?
[00:23:27] So it's tough and sometimes it's tough. All the time or it's tough for a while. This is not an easy industry. So when you've got this pressure all the time and this like annoyance, like, "Oh, that tenant's going to call me and yell at me again, or, Oh, like, Oh, I have to have this uncomfortable conversation and tell my client that we need a $15,000 sewer repair.
[00:23:50] I don't want to do this." The it's the little things that will keep your team going and make sure that they understand like, "Hey. I know it's not the most glorious thing. I know it's always not super exciting, and it's not always super easy. However, what you're doing really makes a difference. It really is important and this is like the bigger mission and vision of the business and you contribute directly to that vision and what you're doing matters."
[00:24:22] So that way it's like, Oh, you know, it's not this grind and this drain and we don't have a lot of churn on our own team and burnout and you know, bad team members that are like, "Oh, I hate my job." Right. Because that's super easy. It's easy and then you make it even harder. It's easy just by itself and then you make it harder because it's property management.
[00:24:43] So it's super easy in property management to have that. So let's combat that. And just by recognizing them and saying like, "Hey, I saw you took care of that thing. Like, hey, oh my god, you got all the leases done. And hey," like, and it could be the littlest things. It's things that they do. Anyway, it doesn't matter.
[00:25:00] They don't have to do anything that's like spectacular. "Oh my God. You like cleaned all the bathrooms today, Sally. Thank you. That was amazing. Like you didn't have to do that." It's little things and it's things that they're going to be doing anyway, but just let them know, "Hey, I see it. And I appreciate it."
[00:25:16] Jason: All right. So the other thing I'll say about recognition is you might be thinking, well, salespeople and entrepreneurs, do they like recognition? The answer is yes. They like it too. We still like it. They like it too. So if you're giving them recognition that adds more fuel to the fire, right? And so you need a system like DoorGrow OS in which everybody gets recognized for their accomplishments and everyone will perform and behave better because they feel seen by everyone.
[00:25:42] And that has value, right? Now one more point I want to make is you might get somebody, an assistant, you're like a VA, you're like they're amazing. I love them so much. They're so awesome. I don't want to lose them. And then you are like, because you're hardwired to be so money focused, you're like, I'm going to pay them a whole bunch more money.
[00:26:02] I see this happen so often. Be very careful about just giving out raises prematurely. Be very careful about this because what I've seen over and over again, I've been in masterminds, multimillion dollar business owners, we're hanging out together and they're like, "Hey I just got this assistant. She was super amazing. So I gave her this big raise 'cause she's so awesome. And now she's showing up late. She's not like getting things done. She seems like entitled." This is what happens when you compensate people financially, instead of giving them recognition and doing it based on how you think instead of what they want, you then sabotage their efforts or they start to sabotage their efforts.
[00:26:43] So don't start paying somebody more just because you like them, right? There needs to be a justifiable reason and they need to be able to justify that reason. And so they may need to come to you and be like, "Hey, here's why I deserve more compensation." And you're checking in with them regularly and saying, "Hey, how are things going?"
[00:27:01] And if you have an open communication with your team members, they're going to tell you when they feel like it's time that they deserve some more money. And it's going to be really uncomfortable for them to do it if they don't like money, it's going to be so uncomfortable to have that conversation, but it's also uncomfortable for you to spend more money.
[00:27:17] Team are the biggest expense. Your discomfort in giving somebody a raise should be equal to their discomfort in asking for it. It's my thought. And so they need to be reaching out. To some degree, and you may recognize somebody deserves more pay, you know, deep down they're being paid too little.
[00:27:36] So then you can give them a raise, but be careful about handing this out.
[00:27:40] Sarah: My other little tip with raises is I worked in corporate for a bit and it was like every year, you know, you're going to get a raise and how much of a raise you get depend, depend on all your stupid numbers and metrics and all, you know, call time and all that stuff.
[00:27:55] So you knew you were getting a raise though, like for sure, unless for some reason they're firing you, right? But other than that, you know, like, "Oh, my annual review is coming up. How much money am I going to make now?" And then they expect it. And then you don't really appreciate it because it's expected. And it's like normal now it's like, "Oh, well I'm getting a raise now.
[00:28:13] Now I'm going to raise." And then. What also happens is, "well, I'm getting a raise," and sometimes people go, "Oh, well I deserve like this much." And then they don't get that. They get less. And then they're like mad about it. They're mad because they're making more money. It's not as much money as they wanted or as I expected.
[00:28:30] So one of my big rules when it comes to raises is with raise comes responsibility. Don't just throw out more money. Like, "Hey, if you want to go from here to here, I'm happy to take you there. This is what that would look like. Are you in?
[00:28:44] Jason: Okay. One last thing. Titles. Titles are heavily connected to compensation.
[00:28:49] So I dealt with this week. I talked to a property manager. They had like 20 doors or something and they hired a director of operations. No. You can't afford a director of operations. So the thing is, yeah, I said, "tell them they are an operations assistant in ecrow." And said, I gave you this inflated title.
[00:29:06] You're an operations assistant. Maybe then eventually they could graduate operations manager. Maybe then be the, you know, maybe eventually. The director of operations, VP of operations, COO, but titles matter. So be very careful about handing out titles. Start everybody out as a something assistant or junior
[00:29:24] Sarah: property manager, junior assistant, property manager, or you can just have levels, property manager, one property manager, two property manager, three, like.
[00:29:32] There's a lot of different ways you can do it. Be careful about titles. Yeah, be super careful about
[00:29:36] Jason: titles. Because they'll go look it up on salary. com and they'll be like, "Oh I deserve this. I'm director of property management. I guess I should be getting 150k or whatever, right?"
[00:29:46] Sarah: And also, 20 doors, fun little caveat. Be careful when you're reviewing resumes with titles for the same reason. Because titles they sound really impressive sometimes and they mean they could be made up They mean nothing when I got hired at an insurance job. They were like, oh we have to make your business card And I said, "okay," and they said "well, what do you want your title to be?"
[00:30:05] And I said, "I pick my own title?" And they're like, "yeah, you can put whatever you want on there." And I said, "well, aren't I a sales rep?" And they're like, "yeah, but don't put sales rep." I'm like, "oh, okay. So what should I put?" They're like, "put like account manager or account executive or like something like that."
[00:30:24] So I don't remember what we came up with, but. Came up with something that sounded like I was like, "Ooh, I'm a big deal." I was a sales rep. That's it. I sell things. That's it. But the title sounded a lot more impressive. And sometimes that can go to people's head just a bit. And keep in mind, money is connected to the title.
[00:30:45] It always will be. So get on. And if you're like, "well, I don't know what to," Google will help you just get on. Well, I just had this conversation, I think two weeks ago with client. " Well, I don't want to hire like the COO of the company. I can't afford that." You're right. You can't. So.
[00:31:00] What are they doing? Maybe they're the team leader. Maybe they're the office manager. Maybe they're an operations assistant. Like get on, find some kind of title, get on Google and say, what are other job titles for this thing? And it will tell you and pick one of those and avoid things like manager, juror, and like VP president or like, Senior account executive, things like that.
[00:31:26] Because it. It will be startling if someone. Looks at their position and realizes. "Oh, I should be making 125 and I'm only paid 55. Huh? That's odd."
[00:31:38] Jason: All right, so wrap us up. Give us a call to action.
[00:31:41] Sarah: Just If you feel like you're struggling with any of this and I know there's so many of you that are like, "oh man. Yeah, that's me."
[00:31:48] I might have made some of these mistakes and that's okay because we all have we've done it to Go on doorgrow. com Book a call with us. We can help you with this stuff.
[00:31:56] Jason: This is what we do. Yeah, and if you made any of these mistakes, I guarantee there's a lot of others going on in the business you can't see right now.
[00:32:03] We can help you get this cleaned up and help you make a lot more money, help you grow a lot faster. All right. All right until next time, to our mutual growth. Bye everyone.
[00:32:11] 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!
[00:32:37] 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.
Several property managers find themselves feeling alone in their difficult market. It might feel impossible to grow after being stagnant for so long.
In this episode, property management growth experts Jason and Sarah Hull sit down with DoorGrow client Brian Bean to talk about how he grew his property management business despite the challenges he faced.
[01:55] Getting started in property management
[06:20] Making business partnerships work
[09:47] Shifting from real estate to property management
[18:21] What’s next for your property management business?
“It's really difficult for partnerships to be successful because for most people, the ego is getting in the way.”
“What you focus on is what you get.”
“Until we learn how to get and find people that we feel safe with, I don't think we're supposed to trust.”
“When you get really great people, it's not hard to trust them.”
[00:00:00] Brian: After 10 years of just being flat from 30 to 35 units. And then now literally doubled it last week. And that's been from following your instruction, your philosophies and you know, focusing on building this business.
[00:00:15] Jason: Welcome DoorGrowers 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 DoorGrower. DoorGrower, property managers 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.
[00:00:58] 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, along with Sarah Hull, co owner and COO of DoorGrow. Now let's get into the show.
[00:01:18] So our guest today we're hanging out with Brian Bean, who is one of our clients and Brian your company is Dream Big Property Management.
[00:01:28] Brian: That's right. We're in Merced, California.
[00:01:30] Jason: All right. In Merced, California. So Brian welcome to the show. Oh, Riverside. You said Riverside.
[00:01:37] Okay. Got it. I know this area. So yeah, I grew up in Rancho Cucamonga. So just a little bit near there. So Brian tell us a little bit about your journey and how you got into property management and then eventually how you stumbled across DoorGrow, I guess.
[00:01:55] Brian: Right, so, I was a newspaper editor and reporter and I got a job, grew up in the Pacific Northwest, got a journalism degree, got a job in Palm Springs on the Daily Newspaper, and moved to California in the 80s.
[00:02:11] And so I did that for 13 or 14 years toward the end I, you know, coming from an entrepreneurial background, my uncle gave me my first, second, third job when I was a kid he owned a, like, old style service station. So I grew up in that small business atmosphere. And when I went to work in newspapers, you know, I had these lofty aspirations, these utopian ideas, you know, you're getting your twenties about doing something to change the world or, you know, to have an impact. And I found out after about 10 years, that was just, it's just another corporate job. And so I was looking around for something else and I looked at a lot of different businesses.
[00:02:55] And I ended up coming upon real estate and I was able to, while I was a newspaper editor, I was able to buy five, two five unit apartment buildings in Palm Spring. Nice. And that was my introduction to property management. I was pretty much doing that during the day. We were putting out newspapers in a, from like three in the afternoon to midnight, you know, the press would roll at midnight and and I did it all, you know, I, from everything from dealing with the tenants face to, you know, patch and drywall to whatever collecting rents, chasing rents, made all the mistakes.
[00:03:33] And I was, it was self education trial by fire. And then a few years later, I went into real estate full time and sales. I had a partner in the apartments who was actually the listing agent on those apartments at the time, but he invited me into real estate full time in 2001.
[00:03:49] And then we were off on a, and it was a run. And so I, I did property management for a while from on our own properties. And then I've just morphed into sales and we were pretty successful and very busy and then the market crashed, and you know, we just kind of moved with the market.
[00:04:08] Jason: And when was that?
[00:04:09] Like 2006,
[00:04:11] Brian: maybe, or?
[00:04:11] Yeah. So 2006 at least in our area, it was August, 2006 when we peaked sales wise. And in 2007, we had, I don't know, a dozen listings and nobody, you couldn't buy a showing, you know? And so 2007, it was the real estate market was, you know, dead man walking. It was, there was nobody really knew what was happening? Well, the masses, right? Some people knew, right? There was stuff going on obviously on wall street, but, the masses didn't know what was happening. Prices stayed up for awhile and they were, it was just like that, that hovering just before the, you know, you throw a ball in the air and it just kind of floats at the apex for a moment right before 2008 and then wow.
[00:04:54] Right. Who knew? Yeah. So, You we just kind of morphed with it. I've worked, I did a lot of, I helped a lot of people with short sales, we worked in foreclosures and. And then I met my current business partner in sales working in an REO house as a buyer's agent. And we started our own company, Dream Big Real Estate, and that was 2008, 2009.
[00:05:15] So from there, a couple of years later I just happened to say to my partner, you know, even though we were very busy, I said, "I really think we should launch a property management division" because at that time, my mentality was, it's a place where we can create sales listings, right?
[00:05:35] And so we did that for a few years. And, you know, the interesting thing about it was that we didn't do any marketing. It was just really word of mouth, but. The day that I mentioned that to my partner, Tim, he just said, "yeah, cool, whatever." Right. he knew I was going to probably be working on it because I had the background in it, but I didn't tell anybody.
[00:05:55] And the next day the phone rang and our first property management client just was calling out of the blue. Still have them, still work with them.
[00:06:03] And then a week later, somebody else called. And it was the same thing, and that was our second client. Still working with them as well. And the, you know, I'm not into rubbing crystals or sleeping under pyramids, but you know, you ask the universe and the universe will provide.
[00:06:19] Jason: One of the things that you mentioned, Brian, that I think's really interest is, it sounds like part of your journey, like there's this importance you've probably realized in partnerships.
[00:06:28] because you've mentioned multiple times, you know, you partner with the listing agent and then eventually you partner with Tim. And so how is finding the right partners been instrumental in your growth and your progress?
[00:06:41] Brian: Well, I will say this is that later on more recently, this year, they have broken out the property management business that was running as part of our real estate sales business. I've broken that out separately, and I'm now solo doing that. Right. Have had partners in the past, and I have found working with partners to be that there's advantages and disadvantages. Totally. It's hard to find, it's really difficult for partnerships to be successful because most people, the ego is getting in the way or, you know, there becomes a battle about, you know, who's doing what, who deserves this, who deserves that.
[00:07:24] Yeah. Personality wise, I'm kind of roll with it person, you know? I'm more of a solution oriented person. Just what we need to get from point A to point B, what's the best way to do that? What for the good of the company, not necessarily for what's best for me personally. Yeah. So I've gone through a couple of partnerships with different people, I have been able to make that work from my point of view, because.
[00:07:49] Because of my personality type, I think, but it is not for the the weak hearted, you know, I mean, it is some days are a lot harder than others.
[00:07:58] Jason: I've seen some of the most successful I've seen have really healthy partnerships in some of the worst situations I've seen where they couldn't grow because one was like an anchor, not willing to move and they had just as much decision making power and until they were able to get that partner out of the business, they weren't able to progress. So it can be a boost in the positive, but it's really difficult to find a really good match.
[00:08:24] Brian: Yeah, and that's the thing is like, I'm more of a behind the scenes person, just in general, I'm more like I can implement. I generally will have the ideas as well, but I'm the one that I'm kind of a control freak, quite frankly, and so one of my character flaws is right now that I'm trying to work on is feeling like I need to touch everything, you know, because that's that is a throttle in the business.
[00:08:48] Jason: Well, I think we all start there. Every entrepreneur starts there, so everybody listening should be able to empathize with that because you know we want to do a good job because we care. We want to look good. We care about how we look right like whatever it is. The challenge with being a control freak is trust and until we learn how to get and find people that we feel safe with, I don't think we're supposed to trust, you know. We're not supposed to just trust blindly. We need to find people that deserve to be trusted and know how to build that team. And that's probably kind of the next level, right? Is for you maybe is to build that team of people that you trust because when you get really great people, it's not hard to trust them.
[00:09:30] Yeah. But they need to match you. Like they need to be a good coach. And then it's a lot easier to trust them. And so in this journey, you split out your business and then you have a property management business. It's all yours. You're still doing real estate stuff also? You still connected to that?
[00:09:47] Brian: I am, but my mentality has shifted. It's probably been more than two years since the first time I talked to someone from your company and yet we didn't start with your company until, when was it, March this year? It was a two year lag of wrapping my mind around the philosophy of, Just making the shift, right?
[00:10:06] Because property management always for us was a, just a holding place for future sales listings. And now, it's the business. Property management's the business and sales is ancillary benefit.
[00:10:21] Jason: So what prompted that shift? How did your brain work that out eventually?
[00:10:25] Brian: I think it's a combination of a variety of things. Having now 20 plus years in the business, I've been through an up and a down and an up and a flat, right? Who knows what the next one looks like. Is it eighties, nineties, or is it two thousands downturn? Yeah. And where I am in life, right. And I mean, do I want to work forever? Just slinging, right? Do I want to be out there, you know, showing, opening doors at, you know, 68 years old?
[00:10:57] Jason: And chasing deals? Yeah.
[00:10:59] Brian: So mailbox money, right. Building a business that's sellable. Right now, or up until this point, I should say, it has been 100 percent every dollar that comes into our house is product of my labor, and that is a train coming down the track.
[00:11:19] Right. So I needed to make some changes now that would have dramatic impacts on my future. If I wanted to change what I was doing, you know.
[00:11:27] Jason: Yeah. Got it. Yeah. That switch from kind of recognizing you're kind of trading time for dollars to realizing, "Hey maybe I want to build something."
[00:11:36] I mean, it's really tempting because you close one real estate deal, that can be a lot of money, but eventually I think there's a lot of real estate agents that wake up to this, that they're like, "Hey, if real estate kind of takes a nosedive or do I want to do this forever?" Maybe not.
[00:11:52] Property management might be a really great business model.
[00:11:55] Brian: Like I said, we did our sales under under Better Homes and Gardens now, and I don't know, did I say that? Maybe in my own head. So the property management is under my own brokerage. The sales that we do, we work under Better Homes and Gardens.
[00:12:10] I, you know, Tim and I as sales agents here until this year, we've been the number one agent, like since we came here. So seven, eight years, however long it's been. I do see the changes. I have seen the changes come in and perhaps it's a little bit of you just mental scar tissue from the crash of, you know, '8, '9, '10, ' 11. Yeah. It's just, you know, because the cracks have been forming in the foundation of this real estate sales market for a few years. Right. And it's been propped up artificially by government policies. Yeah. For three, four years. Right. And so, I've been waiting for a shoe to drop quite frankly.
[00:12:51] And so two years ago a guy used to work for you, Jon. I called Jon back in like February this year. "Hey, Jon, you still working over at DoorGrow?" Jon was actually the one who said to me two years ago, two and a half years ago now, " if you do this, our expectation is that you're going to change your philosophy. You're going to be a property manager who doesn't do sales." What? That took me a while to embrace.
[00:13:17] Jason: Yeah. Yeah. Jon's a good friend of mine. We just went out to lunch recently. He's really sharp, dude. So, you know, I'm really curious, Brian, this journey from being a reporter for a while to real estate, to now shifting your identity into being a property manager, and that's the focus. How do you feel the reporter in you helps the property manager?
[00:13:44] Brian: Yeah, perfect proving ground. It's who I am is based on education, information gathering, being an advocate for consumers, right?
[00:13:56] That's what I was trained to be as a reporter and editor, as a journalist, and that just morphs perfectly into what I do now, which is to look after my client's financial well being, right? And it doesn't hurt that I tend to over explain things, right? Because that's what I do, right? Is my job is to go out and gather information and then provide it in an objective way so that people can then make the best decisions for them and their family, right? So that's being a reporter, right? It is to shine a light on the facts so that people can decide. I mean, sometimes you got to take them by the hand and lead them down the path, right, educating them along the way. Yeah, for sure.
[00:14:37] Sarah: So what was the thing that made you go, "all right, I'm finally going to do this. Like I'm going to jump on board, get involved with DoorGrow and start really focusing on this property management thing?
[00:14:49] Brian: Yeah. So earlier this year I had been kicking around, you know, you're looking at numbers, right? Kicking around the idea of "how much more time do I want to do this?"
[00:14:59] And there were some personal things that got into it too, because you start looking at relationships and your family and looking at the things that are most important in your life. And priority wise, where have they been on your list? And so I decided I wanted to make some changes and then I lost some friends and family members just in the past year.
[00:15:25] And so, one of the things that I picked up in the newspaper was Spending too much time in the office and and spending the less time seeing family and, you know, coming out of COVID and just, it's just like a combination of a lot of things all crashing together at one time.
[00:15:41] Sarah: We are under attack in our house right now.
[00:15:43] We have groceries being delivered.
[00:15:45] Jason: Dogs are going nuts.
[00:15:49] Our professional podcast, everybody, so.
[00:15:53] Brian: Anyway, so that was you know, some personal stuff came up and I decided to reevaluate. Now, in the past 10 plus years, I've been doing property management.
[00:16:04] providing a supply of say two to six listings a year and making that shift. I don't know, it was a conversation with my wife and you know, running numbers and trying to figure out like, is it even possible? And there's a transition period because what you focus on is what you get. Right. So if I start focusing a hundred percent on property management, and how is that going to affect my income for people? You know, because what I do today in sales, that's not income for 90 days. Right. So at some point you have to be able to make that transition. And so, you know, it was a bit of a leap of faith.
[00:16:42] And so, like I said, when I called Jon to ask if he was still working with you guys, then he said, no. He called me back though, but he said no, but he then referred me over to somebody. So, but making that switch, it wasn't an overnight decision by any means.
[00:16:58] I agonized over it. It was sleepless nights, some nights. But I knew that I had to do something.
[00:17:04] Jason: So, well, you took a big risk then this leap of faith and then jumped on board with DoorGrow, decided to focus on property management. You feel like you made a good choice?
[00:17:14] Brian: Yes. You don't know what you don't know. And so, I've been on a journey of learning what other people are doing, best practices, ancillary services to go along, you know, support type pieces of everything from other streams of income that are related that are, you know, not just management fees and placement fees, right?
[00:17:37] I mean, there's a variety, but it's crazy what I've implemented just in the past six months, it's just been an insane pace and now I'm like eight days away from moving to a new, property management portal, and that will be the cherry on top, really. Most of the footwork of putting the foundation together will be mostly done, and then it's digging into processes.
[00:18:02] Jason: Awesome. Yeah. So. Yeah. So you've made a lot of changes to your business and you said you've been learning it at an insane pace. So hopefully we're not making you bored with all this stuff. We've got plenty of stuff, right? It can be a bit overwhelming. We give the feedback on. So Brian, well, what's what's next for you in the future?
[00:18:25] Brian: Right now I'm just trying to continue to learn from you and I'm just focusing on growing the number of doors that we manage and creating a business that will have sustainable and continuous growth and then part of the process has been, yes, putting the tools in place and doing the things that you know, I've been advised to do to create this and grow this business.
[00:18:53] But when you start, you don't necessarily believe it, right? It truly is that leap of faith. And over time, my belief is starting to catch up with my activity. And so, you know, to go like when last week we literally hit the doubling point of when we started with you and after 10 years of just being flat from 30 to 35 units. And then now literally doubled it last week. And that's been from following your instruction, your philosophies and you know, focusing on building this business.
[00:19:30] Jason: Yeah. Well, I'm glad that the next 30 doors didn't take 10 years. That's awesome. Doubling in four months and I think things will speed up from here. So, well, I think that's a good place to end on. I think that's really awesome. So we appreciate you as a client. It's been great seeing your progress. You know, I think there's a lot of property managers out there that are like you, they come from the real estate industry. They want to get out of the hunt and the chase. Maybe they've been doing property management for even a decade, but you know, they haven't really made progress in their growth significantly in the last year or two or three or 10, you know, and and now maybe it's time, maybe it's time.
[00:20:10] So maybe some parting words, Brian, what would you say to those that like they've been watching DoorGrow for a while? What would you say to them?
[00:20:17] Brian: Don't wait. You know, where would I be if I'd started two years ago? . I think about that occasionally, and then I have to stop myself because that just takes me off track.
[00:20:26] And you get into that regret, you know, loop in your head. Like, no, I don't have time for that. I am where I'm now. And everybody is where they are now, right? And so you can either take action today or not, your results will reflect that. Yeah.
[00:20:42] Sarah: And you're exactly where you're supposed to be in that moment. I can do that to myself too. I can go back and go, "Oh, what if I did this sooner? It could be so much farther." Right. But I think that things just tend to work out the way that they're supposed to work out and things kind of line up. And I think you were prepped, right?
[00:20:59] You knew about DoorGrow. You were kind of checking it out. You weren't sure if you were going to make that jump and you did when you were ready and it paid off.
[00:21:06] Jason: Yeah. So, there's a cool book called the gap and the gain. And the idea is that it's so easy for us as entrepreneurs to focus on the gap between where we should be by now. Where our dream or what we could have done. And that's not really an effective comparison psychologically. Like that, like doesn't make us feel super great about ourselves. But what is effective though, is to look at the gain. How far have we come? And I mean, four months. You've come a long way.
[00:21:34] And so the next year, I think it's going to be really awesome for you. So I'm excited to see what you do, Brian. So thank you. All right. Thanks for coming on the DoorGrow show.
[00:21:44] Brian: Glad to be here. Thanks.
[00:21:46] Jason: Thanks again. All right. If you are a property management entrepreneur, you're wanting to grow your business.
[00:21:51] Maybe you've been sitting stagnant for a while. You haven't had significant progress in the last year, maybe the year before that you might even be a really large company and you're not making progress. I've talked to several with thousands of doors in just the last week. We just got one of them on as a client and they've been struggling to figure out how to grow and they cannot even spend any more money on ads to get any more clients.
[00:22:13] It's not working. If you want to figure out how to start moving your business forward significantly, we can easily help you add 100, 200, maybe even 300 doors in a year. And it's without wasting money or spending money on advertising. And that might sound ridiculous, but Brian's going to do it.
[00:22:29] Like we're seeing people do it all the time. So reach out, you can check us out at doorgrow. com. We would love to help you grow your business. Talk to you soon. Bye everyone.
[00:22:39] 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!
[00:23:06] 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.
We are always looking for new, revolutionary property management tools and strategies that benefit property managers, owners, tenants, and vendors.
In today’s episode, property management growth expert Jason Hull sits down with Tom and Diego from a new company called Calvary to discuss how property management entrepreneurs can improve maintenance processes at NO COST.
[01:35] Innovating in the property management industry
[08:30] Improving maintenance at no cost to the property manager
[17:26] What kinds of businesses does this work for?
[21:26] The biggest maintenance challenges
[27:28] How do I implement this?
“You show what you can do and then you build trust.”
“It all goes back to systems, SOPs, and training individuals.”
“The one piece that's not scalable in a business is depth and depth is where the magic happens.”
“If you want to scale your business, you have to do the things that are unscalable.”
[00:00:00] Tom: It's a true win for everybody. It really is.
[00:00:02] Jason: And you guys don't charge the property manager... anything?
[00:00:06] Tom: Nothing.
[00:00:08] Jason: Welcome DoorGrowers 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 DoorGrower. DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings.
[00:00:33] 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.
[00:00:52] 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.
[00:01:10] So today I'm hanging out with Tom and Diego Alatorre? All right. I got it. Sort of. All right. And Tom Van Waelem. Yes. Perfect. You guys are stressing me out with these last names, man. These are not easy. All right. So it's good to have you both on the show. So Diego and Tom have this cool idea and business called Calvary. And we'll get into that in a minute.
[00:01:34] And our topic today is how to improve maintenance processes at no cost ever. And this is something really unique. And I was like pretty surprised when they originally shared this idea with me, their business. And so we'll get into that, but first let's get into some background between the two of you, how did you get into property management?
[00:01:56] And I think this will also help, you know, qualify you to the audience. So they go, "all right. Should I trust these guys with some maintenance stuff?
[00:02:03] Diego: So actually I could go ahead and get started and tell you a little bit about my background story. Yeah. It's actually really interesting, Jason, this was looking at your podcast and I saw that you did an interview with Pete Neubig. Pete Neubig was the owner of Empire.
[00:02:21] Sorry, I'm a little bit, I'm a little bit nervous. It's the first time I'm doing a podcast. And he was talking about in your podcast that he hired four individuals, right? One of those four individuals that he hired, I was one of them. I started at the very bottom. I started as an assistant to a property manager. And from there working at Empire, I started to learn that maintenance was a very big struggle. Most issues pretty much happened because of maintenance, right? Escalations, billing problems, you name it. And from that point on I became a maintenance coordinator.
[00:02:58] I started to take a really big like at maintenance. And I started to understand and build processes and start to, you know, find solutions on how to handle maintenance. So, and it really helped me because once Empire merged with a bigger property management company, I was able to utilize those same processes, that same structure and we were able to implement it at a very big property management company that had over 9,000 homes at the time.
[00:03:30] And so after we implemented that, it really helped that company grow because we were able to rebuild the entire company you know, and scale it. Maintenance was one of those things that was hindering that company from growing and in less than two years that company went from 9,000 doors to over 18,000 homes.
[00:03:51] And so after that, first I was headhunted by a couple of property management companies that knew what I was able to do when it came to, you know, to maintenance. And so that's when I decided to start working at Austin investors, I was able to do the same exact thing, which was implement you know, the maintenance knowledge, the processes, SOPs systems, and we had a lot of success.
[00:04:18] We were able to help Austin investors grow as well, and we were able to solidify the maintenance department. It was actually during that time that I was at a conference with over 100 plus property management companies, and they were talking about their maintenance struggles and their maintenance issues and why they couldn't figure out how to handle it, you know, from you know, vendor relations growing from 100 doors to 500 doors and then how to handle maintenance, you know, once you have 1000 doors and so on. And that's when I realized that I had a lot of these answers that could help them. With these maintenance struggles, right? So after noticing those particular struggles, that's when I realized that we could help multiple property management companies, you know, and that was actually the same exact time that Tom approached me with the business proposition, and his business proposition it went very well with the idea of helping multiple property management companies. So Tom, my business partner he'll tell you a little bit more about, you know, himself and how we started our relationship. But yeah, that's
[00:05:32] pretty much it.
[00:05:33] Jason: So Tom, what did you think when you heard about some of the stuff that Diego had been accomplishing?
[00:05:39] Tom: Yeah, crazy. I mean, when I approached him, I was a roofing salesman at the time, and I was knocking door to door. There was just a big hailstorm that hit Austin and the surrounding areas. And I was knocking doors, you know, helping people get insurance involved so they don't have to pay it out of pocket.
[00:05:55] And I reached out to Diego with the hopes of, you know, landing, you know, a lot of inspections very easily without having to bother people knocking on the actual doors. So I reached out to Diego and I was like, "Hey, listen I would love to inspect all of your roofs because I believe that we can save your homeowners a lot of money just simply by inspecting them. If I find that if the homeowner doesn't want to continue, that's fine. At least the homeowner will know what the situation is with their roof."
[00:06:19] Diego said, "wow, great. I've never heard about that. Let's do it." So we did the project, inspected 600 homes myself, and then after the project, we saved homeowners a lot.
[00:06:29] We replaced about 60 or 70 roofs. So that's a lot of money that we saved because insurance claims, they have an expiration date, usually depending on the insurance company. And anyway, after that project, I reached out to Diego and I was like, "hey, what do you think? Do you think other property management companies would do this? Or are you the only one who was willing to do this? Because it was a lot of work." Right.
[00:06:52] And he was like, "yeah, I think they would, but," he said, "you're forgetting about all the other trades."
[00:06:58] I was like, "what do you mean?" I was like, "yeah, roofing is only about 10 percent of all the work orders. So you're forgetting about all this."
[00:07:06] And he said, "listen, I've been thinking about the same thing, and I believe that there's a way for us to provide excellent maintenance to all property management companies and we can figure out a way for us to do it for them for free."
[00:07:20] I was like, "well, look, if we partner with multiple property management companies, and we get so much work, we can leverage that volume with our techs. So we reduce our technicians that we work with, we reduce their marketing and sales costs, and then they give us a percentage, which is much less than the marketing and sales costs. So the vendor wins, the homeowner wins because they don't get marked up, the property management company, of course, wins because they don't have to pay for payroll, and we win.
[00:07:52] So everybody really wins. And also of course, the tenant wins because with our systems and our really well trained people. We can actually provide great service, faster and arounds and all of that.
[00:08:03] Jason: All right. So I think we need like a break sound effect. Everybody listening is like, "wait, whoa, what'd you just say?"
[00:08:10] Like, that's like, sounds crazy. Could you take us back through that and help us make this make sense? So, cause you're talking a little crazy here. Like you can make maintenance more affordable and like, and do it and it would be free for them. And so let's break down the business model. So how does this work for a property manager?
[00:08:34] Tom: All right. So when we partner with a property management company we basically. We can plug into their org chart wherever they'd like. So, for example, we work with big companies and we plug in underneath their maintenance coordinator, right? So that maintenance coordinator, they have about three, four hundred properties that they manage.
[00:08:55] We just plug in there, they become our supervisor, and we provide the maintenance coordinators, we provide the vendor network, we provide everything. So we handle the work orders from start to finish. And whoever is supervising us within the company is also the liaison with the higher up.
[00:09:13] Okay. Does that make sense? So for the smaller companies, for example, we would report to property managers. If a property manager is currently handling all of their maintenance themselves, they can just leverage our team. We have a specialized team with following the right processes. They leverage us and they just supervise us.
[00:09:31] They send us the work and they become a supervisor. It eliminates 90 percent of their work. Yeah, sure. You know, sometimes there's an escalation. It's still maintenance, but at least we can handle most of it. They get daily updates. Everything runs very smooth.
[00:09:46] Jason: Okay. So the property managers listening are like, "yeah, but how's this free?"
[00:09:50] Like explain that again, like take us through, how is it possible for this to be free? Because they know you want to make money. This is a business. Yes. So how is it free? And if it's free, then are the maintenance costs being marked up. Expressly high, right? And so this there, there's got to be a catch is what they're thinking.
[00:10:10] Tom: Yeah, so there's no catch. So the way it works is with our vendors. We send them a lot of work. That work means that they have less cost on marketing and sales department. Usually that's about 25 to 30 percent of their revenue.
[00:10:25] Jason: Yeah. So let's explain this. So like, if you're a vendor, you have to spend a lot of time trying to market.
[00:10:32] You're doing door flyers. You're like putting out mailers. You're like, they're wasting a ton of money. I get this stuff in the mail and it just goes right in the trash, right? They are going out on bids constantly trying to give quotes and none of this is making them money. This is all an expense.
[00:10:49] So they're spending like a third of their revenue just to try and get customers. Exactly. Yes, sir. Yeah, exactly. And so vendors, you're able to basically eliminate that expense.
[00:11:02] Tom: Yes, correct. We cut it more than in half.
[00:11:04] Jason: Yeah. Okay. Yeah. So that's a big savings for them. They're not having to go out on bids. They're not having to like waste time. With the property management company, they're not having to deal with a lot of headaches and garbage. They just have work. And that's really what they want to spend their time doing is just doing the work. So this sounds like a selling point for these vendors and an incentive for them to work with you over maybe other, like through you rather than directly with property managers or rather out in the marketplace with random homeowners.
[00:11:35] Tom: That is exactly.
[00:11:36] Diego: Exactly. And the really unique thing about this, Jason, is that it doesn't just save them money, right? And we don't just get you know, the flat rate or we don't just mark up. We actually save the owner's money. Why? Because these vendors, they're so happy with the amount of work that we're sending them, that they also provide the best rates in the market.
[00:12:02] Which are usually way below average. You know why? Because they want to be your number one go to technician, you know, they want you to send as much work as possible. And so they're pretty much booked up. You know, most of the vendors that we utilize, they're pretty much booked up.
[00:12:19] And so they don't want to lose that relationship with you, which, you know, allows us to get better pricing for the owners, because that means we'll continue to get more work, you know, we'll continue to get more business, which also allows the vendors that we work with to expand as well.
[00:12:37] We've had multiple vendors that started working with us in Austin and they have expanded to Houston, San Antonio, Dallas. And, you know, it's really a win scenario for everyone because vendors save money, owners save money, and property management companies don't have to pay any money when it comes to handling maintenance.
[00:12:58] You know, they just have to have someone that oversees us.
[00:13:01] Tom: And I also would like to add in terms of pricing. So for example, because we handle so much volume, we actually have access to very good priced GE appliances. So the homeowners will pay around 15 to 25 percent less on appliances. That's black on white proof. You can check our price versus the store and then also Goodman HVAC units. We have extremely good pricing on a regular unit for 2400 square foot home. We save a homeowner easily 1500 to 2,500 dollars, depending on who we compared with. But those are things that we can actually prove black and white that we say.
[00:13:42] Jason: Yeah, awesome. So they're getting better rates on maintenance. They're not having to spend any money on doing that. They get discounted rates on appliances because of your buying power and they get discounted rates on HVAC.
[00:13:57] Tom: Yes, sir. It's really a win. It's a true win for everybody. It really is. And it works.
[00:14:03] Jason: Yeah, and you guys don't charge the property manager... anything?
[00:14:09] Tom: Nothing. Nothing. No. So because we have such a efficient processes we can provide a maintenance coordinator, a maintenance manager, a regional manager, we have vendor onboarding, we have a tenant success, and quality control. We have everything in place to function as a full maintenance department. And again, we just plug in right where you want it underneath a property manager, maintenance manager, maintenance coordinator. It doesn't matter. We just report and that person becomes the liaison to the directors.
[00:14:42] Jason: Got it. So you guys can be the entire maintenance department for a small manager. If a big company already has. Some things going that they really like and some team members that they really value, then you guys can just plug in and be the pieces that they still need.
[00:14:57] Tom: Yeah, that's important to state. We don't want you to fire people.
[00:15:02] That's not our goal. What our goal is, though, is now those people who are already in place, they can focus on tenant relationships. That is word to mouth right there. Same thing with the homeowners. Now you're going to grow your business because you provide a better service and you do not have to scale as fast.
[00:15:20] So even without firing somebody, you just keep those people. They give a better service. Now you grow, but you don't have to hire as fast.
[00:15:30] Jason: The one piece that's not scalable in a business is depth and depth is where the magic happens. I always say to my clients, if you want to scale your business, you have to do the things that are unscalable and being able to spend more time talking directly with the owners, connecting with them, letting them know what's going on in maintenance, making them feel calm and that you've got things handled.
[00:15:54] Yeah. That interaction is what's going to retain those clients. I mean, the number one reason people leave property management companies and go find somebody else is communication. It's lack of communication. So you can increase the communication level significantly. So you keep these clients forever and Calvary can handle all the maintenance, correct?
[00:16:15] This sounds like such a good idea. Why has nobody thought of this before? Why is no one else doing this?
[00:16:22] Tom: Honestly, I think because it's hard. Maintenance is hard. And then not only that, yeah, I don't know if in maintenance, I guess you have to be a specific type of person, right to be able to handle that. And then you need to match that with entrepreneurship. Right. And most people, I think they have not seen the disconnect it's. Within the culture, all maintenance is handled inside the company. So I think, I don't know if like, a third company maintenance team has not come across.
[00:16:57] Also, all of our competitors, they charge. They charge. Why? Because they can. You know, we want to provide value. We don't have to charge. We can. We don't have to. Our service is worth the extra cost, but we don't want to. You know, we want the smaller companies and bigger companies just to be able to grow without an extra cost.
[00:17:17] And of course, by doing this it's smart business wise because now, you know, we can get our foot in the door more easily. So it lowers the barrier to entry.
[00:17:25] Jason: Okay. So, how small is too small of a company to work with you? Some people listening are like, "man, this sounds like a great thing. Like, I don't really like maintenance.
[00:17:34] I don't have a maintenance coordinator yet. I would love to work with them." What's too small?
[00:17:38] Tom: Honestly, I don't think there is a too small. And the reason one caveat though, if we are already active in the market.
[00:17:46] Jason: And that's the next question then is there's certain markets you mentioned, you know, around Austin, Texas, et cetera, which markets are you in currently?
[00:17:54] And what does it take for you to go into a new market? Like, so it's an option for people.
[00:18:01] Tom: So we're currently in all Texas markets. So Austin, San Antonio, Houston, Dallas, Fort Worth. We are very active in Denver, Colorado Springs. We have Tucson, Charlotte, North Carolina, Detroit. So those are the markets that we're already active in, so it's easy to just add a smaller PM company because we don't need to set up the whole vendor network right. We're constantly tackling new markets, by the way. But if we are in a market if you are a property manager looking, you're watching this and you're in a market that we are not in, we need about three weeks.
[00:18:36] Jason: Yeah. Okay. That's it. So three weeks and how many units for a new market for it to make sense for you?
[00:18:42] Tom: I think 250 would be the minimum.
[00:18:45] Jason: Yes. Okay. Yeah. Got it. All right. So a property manager in a new market, if they've got at least 250 units. That could be it. If there's smaller ones, maybe they get together with their NARPM buddies and they're like, "Hey, let's get this."
[00:18:57] And they add up to 250. That could work.
[00:19:00] Tom: Yeah. But also whenever we open a new market, for example, 250 would not be profitable for us. So then we just focus on these markets as well. So we have our sales team now has more to do.
[00:19:10] Jason: So then you start to like build that market up. Correct. Got it. And that builds up the business there and that allows you to get the discounts and do all the good juicy stuff that you guys do.
[00:19:21] All right. Okay. Got it. Okay, cool. So you guys, this product sounds like a no brainer. And so you guys must be pretty busy rolling out to new markets.
[00:19:30] Tom: Yeah, we are. I mean, we started business when Diego? On October 21st, 2022, we received our first work order and now we're in what 12 markets already.
[00:19:41] Jason: And it must you know, it sounds like Diego is a pretty sharp operator. So like the systemization of being able to do these rollouts is probably pretty tight.
[00:19:49] Tom: Oh, yeah. You go.
[00:19:51] Diego: Yeah. So it's actually one of the things that I wanted to mention, Jason cause Pete Neubig actually, you know, mentioned it in his podcast as well.
[00:19:59] It all goes back to systems, SOPs and training individuals. You know what I mean? Because. A lot of people focus on churn when it comes to owner churn or you know, tenants leaving and so on. Right. But not that many people focus on you know, your maintenance coordinator churn or your internal churn.
[00:20:20] And so that's one of the things that we like to focus on, you know, you want to train individuals correctly. You don't just want to, you know, let their hand go and roam free and figure out things on their own. You want to take time to, you know, to teach them, to train them, for them to understand the guidelines, the SOPs, the structure, so that whenever we do fit in with a new property management company,
[00:20:46] they're ready to go. They understand the business, they understand the concept, they understand what is needed of them to make that maintenance department better. Because at the end of the day, that's what we want. We want to help property management companies grow. And so we can grow alongside them. And because that's what allows us to, you know, to continue to grow.
[00:21:07] And so it all goes back to that. Yeah, exactly.
[00:21:10] Jason: So Diego, you know, having seen inside probably several lots of property management companies, maintenance issues and problems and having, you know, and being able to brilliantly do it really effectively and seeing that contrast, what are the biggest challenges that you're seeing or the biggest mistakes property managers are making when it comes to maintenance? And I think this is valuable because it helps people to understand how your brain works and how what you do at Calvary is a bit different than what they're doing.
[00:21:39] Diego: I think it's a couple of things, but let me pick the top that come to mind I would say vendor relations. Vendor relationships are so important because what ends up happening is if you tarnish vendor relationships, what ends up happening, you don't have good, reliable vendors that you can count on, you know, that will provide the best service, the best pricing possible. And so I feel like. In this industry, a lot of companies have treated vendors poorly, you know, and we notice it constantly when we go to new markets they usually mention like, "Hey, I don't want to work with a property management company." And then, you know, you ask them why, and it's usually because of that. You know, building that relationship is very important because they're part of your group, they're part of your network, and once they see that they're super, super reliable. They give you the best pricing, the best service possible, and so on. I would say that's number one.
[00:22:40] Jason: And before we move on from that one, like, this is really interesting because what we hear a lot in the industry is people complaining about their vendors. Like property managers are always complaining about their vendors saying they're the problem. They're unreliable and having such a negative perception of the vendors and they might be creating it. Like maybe the property managers are the ones creating this problem. They're like, but maybe they're not like paying them on time, or maybe they're not like being responsive in communication, or maybe they're treating them poorly if there's like an issue or a mistake or a challenge, right. Yeah. Putting them into a bidding war. Yeah. None of them want to be doing that. Right. It's a big waste of their time.
[00:23:20] Diego: Yeah. Yeah, pretty much. I'm not saying all of them, you know, all property management companies do that, but I would say most do have that, you know, that they feel like they're entitled to get the best service instead of working together to, to build that relationship, to get the best service to have reliable individuals.
[00:23:40] Jason: What's the next thing that you noticed in contrast between, you know, the property managers that are ineffective with maintenance and dealing with issues versus how you do things at Calvary?
[00:23:50] Diego: Yeah. So I think it goes back to the maintenance coordinators or property managers, right?
[00:23:56] Everybody is kind of doing their own thing. Right. So I've gone to different property management companies, and they're like, "Oh, no, I do things like this because this is the way to go. This is how I've been doing it for so long." But if you have five property managers, or if you have five maintenance coordinators.
[00:24:14] They're all doing their own thing. They're not all working as a group, you know, towards the same direction. Which goes back to the structure, it goes back to the ESO piece. And so I feel like not that many companies understand maintenance entirely and so everybody's kind of doing a little bit different things, which is not scalable, you know. You can't have five individuals working, you know, differently because then what's going to happen is you're going to have people frustrated saying, "Hey, but this person said I could do this, but now you're telling me I can't do this and so on."
[00:24:51] So I think it also goes, you know, that's one of the biggest things that I've seen going into different markets, different companies everybody's doing their own thing and so.
[00:25:01] Jason: So there's a lack of consistency and yeah, I could see how that'd be frustrating for vendors too. If like a company had like five property managers, like bugging them portfolio style and all of them are different.
[00:25:12] One of them might be a jerk to the vendors and the other one might be cool. Yeah, it could be messy.
[00:25:17] Diego: Yeah, and then last but not least, numbers, KPIs, they never lie. And so if you have maintenance service requests that are taking too long, well, tenants are going to be frustrated.
[00:25:32] Owners are also going to be frustrated. Why? Because most of the time, especially for small property management companies, the tenant has the owner's phone number most of the time, or, you know, I've seen that happen many times. So what they will do is they will reach out to the owner and they'll be like, "hey, they're lagging on this. They're not taking care of this. Hey, I'm having an issue with this." And so if you don't take care of things in a timely manner, it's always going to affect your business. I've seen where, you know, some clients they're okay with taking 14, 15 days to handle a maintenance request. And that's a big no no.
[00:26:09] You know, you want things taken care of in less than five days. That should always be the goal. If it's an emergency, you want to handle it same day, you know, or at least mitigate the issue that same day so that the tenant is happy. So that they trust in the service that you're providing, and that will allow you to, you know, to dictate how you run your maintenance department and how tenants are trustworthy of your services.
[00:26:36] And then, of course, you know, owners are also going to be happy with the services that you're providing, since you're not going to have that many escalations, that many issues, or that many problems that surface.
[00:26:46] Jason: So, yeah, it seems like kind of a snowball effect that when you start to be inconsistent, you don't have a quick enough turnaround time on maintenance.
[00:26:54] You've got, you know, all these challenges that it starts to then. Turn it into escalations, more conversations, owners might even be getting involved. And so it starts to get messy. And that complexity then takes over the business because then something that should have taken maybe an hour is now taking three hours of manpower and time in the business.
[00:27:16] And so then it's like the business owner is trying to run a race and they're shooting themselves in the feet, right? So things are just like snowballing and getting worse and worse. And then they're like, this is chaos. This is crazy. Yeah. So, all right. So those that are dealing with these challenges, they're like, maintenance is tough, like vendors are tough.
[00:27:35] Like all of these are problems and they don't have all this stuff dialed in. Or maybe they've got things pretty well dialed in, but they're like, "Hey man, maybe I could save some money on. You know, team, or I could just improve and get my team focused on higher level tasks of like communicating with people, more depth and retaining clients longer."
[00:27:53] What. What would be the first step? How do they connect with you?
[00:27:57] Diego: So they can pretty much, you know, reach out. We could set up a meeting where we can go ahead and explain, you know, go a little bit further in depth with their particular property management company, you know, how many homes they have and so on.
[00:28:12] And then if they do sign up with us, in 7 days, we'll have a plan ready to go for them that will dictate exactly, you know, what is needed and what we're going to be implementing within those 7 days so that we're ready to hit the ground running.
[00:28:26] Jason: Yeah, that's pretty awesome. And so what's kind of the onboarding process like, like for those that would be getting started? What would, what's sort of the experience?
[00:28:36] Tom: So we have a two week process. So it starts by sending over the contract so they can read it over.
[00:28:42] It starts by also getting all of the data of the current of the units they currently have, their history, the history of the work orders. Also, their current vendors are very important. We understand that property management companies, most of them have already built solid relationships with those vendors.
[00:28:59] We don't want them to push them out. No, actually what we're going to do is we're going to contact those vendors. We're going to propose our proposal. And we're going to tell them like, "Hey, you will get more work, you know, by also getting work from other property management companies." So, yes, so we can use the same vendors as well.
[00:29:18] So we collect all of the data, then we analyze the data. We implement everything into our software. There's something we actually haven't touched on, but we have found that Rentvine is a really, I mean, the best software out there. And we're also providing that for free to our clients. So we can I mean, we can work with any software, but if we do not have one, we can work with Rentvine.
[00:29:44] Anyway, so that is also part of that onboarding process. Maybe it's like, "okay what software do you use? Do you want to switch to Rentvine?" And then over the second week, we start implementing. We have a few meetings where we discuss all the final, like who like the communication with the billing department.
[00:30:01] Who's going to take care of that? Is that going to be the liaison? Is that going to be somebody of ours? So, yeah, it's a two week process. We have everything dialed down from a launch date, minus 14 days to launch date.
[00:30:13] Jason: And the reason you like Rentvine, do they have a pretty good maintenance system?
[00:30:18] Tom: Yeah, the communication is excellent.
[00:30:21] The communication can be logged with timestamps, but more importantly as well, it aligns very well with bookkeeping. The bookkeeping is really solid in there and it just works.
[00:30:32] Jason: So, what about those that have different maintenance tools, like maybe they've been using Latchel and they've got them handling the phones, or maybe they've been using Property Meld and they're using that text based communication system, these things that they need to keep, are these things that you would work with?
[00:30:49] Like this sends a whole nother level of complexity I would imagine to your business.
[00:30:54] Tom: Yeah, no, it actually, I mean, it works. So we started, so to get our foot in the door in the industry, we actually started as a vendor, right? So we, our systems work with any software. So it does work. It adds complexity, yes. But if we assign a certain maintenance coordinator to a certain account, they get used to that very fast. So it does work.
[00:31:15] Jason: Got it. So you can work with whatever tools that they do have. And if not, you've got some good ideas for them to get their maintenance systems dialed in well.
[00:31:24] Tom: Correct.
[00:31:24] Diego: Yeah. Correct. And then, so that actually brings up a really good topic. So we can help them save money because most property management companies, they utilize, for example, Property Meld. Right. And that's an external tool to their actual software, which is usually Appfolio. And so they usually pay extra for per property for Property Meld, if they switch over to Rentvine instead of Property Meld, then we pay for that and it's, you know, it's completely free for them. So that means they save money there as well and pretty much Rentvine can do what Property Meld does. And one of the reasons why people choose Property Meld is because of the communication and Rentvine has a very good communication factor built into it. But it goes a little bit further when it comes to the, like, Tom mentioned the billing processes, because vendors can go ahead and submit the bills there and you can break down all of the information there, which fits in perfectly to the tool that the property manager is using.
[00:32:27] So it allows us to have a very robust system that allows property managers, you know, to save money by choosing to work with us.
[00:32:35] Tom: So. Yeah.
[00:32:37] Jason: The more you share, the more stupid people might feel for not working with you.
[00:32:43] Tom: I have one more, 24- 7 maintenance. Okay. Say that again. 24- 7 maintenance.
[00:32:49] So rather than paying an external company for a call center to, you know, receive phone calls from tenants. Yeah, we actually have a night crew that will pick up the phone and also dispatch those work orders for work orders, of course, that are dispatchable at night, right? For certain emergencies. So we have a team working around the clock.
[00:33:10] The night team is a little bit smaller, but it's around the clock.
[00:33:13] Jason: That's amazing. So, yeah, because I know there's companies that are using Appfolio, they're using Property Meld, they're using maybe Latchel or EZ Repair H otline or something to do the calls. And these are all stacking as expenses in the business.
[00:33:30] And then they're also having to coordinate all of the maintenance and go and source and find all the vendors. And you're saying, "we'll just take over all of this for you and it'll not cost you anything." Exactly. It worked. It worked. So, all right. So, a lot of people might be thinking this sounds too good to be true.
[00:33:51] So let's say I sign up with these guys and I switch all my stuff over to using them and then I don't like it or there's something like they're afraid, right? This is their fear. And I've given everything to them. Are they going to have some benefits still? Like, will they have better processes?
[00:34:09] Will they know what's going on? Like, like how do we lower this risk for those that are like concerned about handing over a piece of their business to somebody else and then what if it isn't good? Like, that's their fear.
[00:34:23] Tom: Yeah. So, part of our marketing strategy and part of our vision and mission is to share all of our information.
[00:34:30] So, we're not going to keep everything to ourselves. We're actually in the process of writing a book, which will be finished very soon, on how we actually do the maintenance. So, it's one thing saying, "oh, we know how to do it." It's another thing showing it and that's what we're going to do. So we have the processes, we can share that with the teams, you know, if we're hopping on a call, we can share what that is, but also to make it available to the public, we've written a book, it's almost finished, which holds all of our processes in a story form, which then is connected to presentations and actually implementable knowledge. So if they don't want to work with us, fine. We will still teach you how to do it. That also means that, you know...
[00:35:11] Jason: like you're open sourcing your product.
[00:35:14] Tom: It is the 2023 way of marketing, right? You show what you can do and then you build trust. So, but that's really, and you know, it's also to help people. Many property management companies might not want to do this and that's totally fine, you know, but we can still help those people.
[00:35:31] Jason: Cool Well, I mean if things go well for you guys, which sounds like it will because it's a pretty sharp product If there might be the day when people are wanting Calvary doing the maintenance and not local property managers handling it.
[00:35:46] So that's our vision. Awesome guys. I think this sounds like a no brainer. It sounds like a really awesome product. I'm really excited to see what you guys do. And I'm sure there's several that are interested in just once they hear this podcast episode, they'll be interested in giving you guys a shot.because maintenance is one of the biggest complaints we hear about in the industry. It's usually the first big challenge they all need to solve. And it sounds like you guys have got the product where it's solved and they can just get some Calvary and everything's going to be better. So, yeah.
[00:36:19] Tom: So our website is cavalry.works. That is cavalry, C A V A L R Y dot W O R K S, because cavalry works.
[00:36:29] Jason: Got it. Okay, cool. So check it out, everybody. So anything else you want to say before we end the show today?
[00:36:37] Tom: Yeah. Thank you for the opportunity to come and present us. It was our first podcast. I hope we did a good job.
[00:36:43] Jason: Diego's camera's a little crazy, but it kept us on our toes. So I'm really impressed with you two. I know we met earlier and chatted and I was like this like, it sounds like such a crazy good business model. And I think it's possible because of the expertise that you both have and that you're able to bring to the table and excited to see about that.
[00:37:05] When that book comes out, maybe we'll have you come on again and plug that book. That'd be really cool. And then man, Diego, I'd love to have you come and maybe present to some of our clients in our mastermind, just about maintenance because everybody has this challenge and I think it'd be really cool.
[00:37:20] So. All right. Well, looking forward to hanging out a little bit more with y'all and seeing what you guys accomplished. So, thanks for being on the DoorGrow show.
[00:37:30] Thank you, Jason.
[00:37:32] All right. Cool. So if you are a property management entrepreneur that wants to add doors, grow your business and you are struggling with getting more business and getting more doors, we can help you with that.
[00:37:45] And we are really good at helping people grow. One of our clients, brand new, zero doors went through our rapid revamp class that we teach in our mastermind had zero doors and then after we cleaned up to the front end of his business, he started working on adding doors part time, like maybe 2 to 3 hours a day and then he was able to add and break the hundred door barrier. He was able to add a hundred doors in six months, and he was doing this part time. That would be impossible with advertising. That would be impossible with going and buying cold leads from doing SEO or pay per click or content marketing or social media marketing.
[00:38:22] We gave him the right strategies. He went and took action. And he spent less time doing it than most people do. And he was able to add than most people do trying to grow their business. He was able to add a hundred doors in six months. That was what our client, Kent, who we just recently had on our podcast episode.
[00:38:39] And if Kent can do it, you can do it too. And our clients can add a hundred to 200 doors every year, organically, just by using our strategies. If you have a really good full time BDM, we can help you add two to four hundred doors a year, organically. And then, we can also get you the right processes, and the right systems and things dialed in, so that you can become infinitely scalable, and then you can start to do acquisitions.
[00:39:06] And you will make a lot more money off their doors, than the person you're buying them from was. So anyway, reach out to us at DoorGrow. You can check us out at DoorGrow. com and join our free Facebook group. You can get access to that. We have some free gifts for you by joining our community, go to DoorGrow club. com. This is just for property management, entrepreneurs, property management, business owners. Join that community. If you're starting a property management company, join that community. If you have an established company, join that community. People are helping people out in that group. It's an awesome community.
[00:39:37] And our hope is that you will get so much value from the free stuff that we put out there and from our free content and our podcasts that you will want to join our mastermind, get beyond the paywall and see the amazing stuff that we're helping companies do and be part of an even more amazing community, our mastermind.
[00:39:56] So until next time, to our mutual growth. Bye everyone.
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