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#DoorGrowShow - Property Management Growth

The #DoorGrowShow is the premier podcast for residential property management entrepreneurs that want to grow their business & life (#DoorGrowHackers). We bring you the best ideas in property management, without the B.S. Hear from the latest vendors, rockstar PMs, and various experts. Hosted by marketing whiz, entrepreneur coach, and property management expert Jason Hull. Join our free community of #DoorGrowHackers at http://DoorGrowClub.com and learn more about the best property management websites and marketing at http://DoorGrow.com
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Now displaying: Category: interviews
Mar 21, 2024

As a property manager, you know how stressful the industry can be. It’s often a difficult and thankless job. On this podcast, we like to share ways for property management entrepreneurs to take care of their physical and mental well-being, but the importance of sleep is often overlooked…

In today’s episode, property management growth expert, Jason Hull sits down with Bijoy John A.K.A. Dr. SleepFix to talk about how to achieve high-quality sleep to reduce stress and improve overall health.

You’ll Learn

[01:47] Why sleep matters more than you think

[06:43] Mythbusting sleep hacks

[16:19] How stress and worrying is slowly killing you

[20:52] The 7 proven sleep strategies

[27:51] Daily planning to reduce stress

Tweetables

“Sleep is a superpower.”

“I've never seen anybody sleep better by having too much information.”

“Worrying about anything is probably not an effective way to get to sleep.”

“You cannot data mine yourself to sleep.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Bijoy John: People say "I can sleep when I die." But I tell people, "if you're going to go on this path, you're going to die." 

[00:00:07] Jason: Welcome DoorGrow property managers to the #DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow property manager. DoorGrow property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings.

[00:00:34] 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.

[00:01:11] And I have a special guest today. This is Bijoy John. Welcome to the show, man. 

[00:01:17] Bijoy John: Hey Jason, how are you? Thanks, man. 

[00:01:18] Jason: I'm great. So we met at a mastermind because we both invest in ourselves and work on growth and he builds himself out as Dr. SleepFix I saw on Instagram. And so we've got Dr. SleepFix in the house with us today. So we're going to chat about sleep and I'm excited to get into this.

[00:01:38] Because you know, we geeked out talking during the mastermind about sleep a bit, but this is something I've put some attention on because it has a serious impact on us. And why don't you give us a little about your background? And tell us a little bit about how you got into focusing on sleep.

[00:01:55] Bijoy John: Thank you, Jason. Thanks for having me. So sleep is a superpower. We don't take it seriously because it doesn't hurt like a toothache or grow like cancer, so we put it off, but with years, it just catches up with you, right? So my background is in pulmonary critical care. I've been practicing sleep medicine for over 25 years, there are patients who have pulmonary problems and lung problems takes precedence.

[00:02:16] To see me was like six months wait to see me in clinic. So finally I decided, as time goes, you change your perspective and, I thought we'll do something preventative for people. So I saw many problems, like blood pressure, diabetes, memory problems, people are in a fog, which can all be prevented by sleeping better.

[00:02:37] So I left my the whole shebang of the ICU, the big flying critical care doctor and started my own clinic three years ago called Sleep Wellness Clinics and then I wrote a book and then I started by a company called SleepFix Academy to reach the masses. So sleep is the superpower. We pay a lot of attention on diet and fitness, but sleep is the foundation on which the other two are built.

[00:03:01] So I just want everybody to find it within themselves and discover the superpower and be the best version of ourselves. That's my goal. 

[00:03:08] Jason: Got it. That must have been frustrating to see all these problems in the medical industry that could have just been prevented by sleeping better.

[00:03:17] It seems like such a silly, simple thing that we don't even pay attention to sometimes. Like we just take it for granted. We're like, "yeah, I sleep every day. No big deal." But the difference in quality of sleep can be pretty dramatic. 

[00:03:29] Bijoy John: Especially when we talk about mental health, sleep and anxiety and depression have a bidirectional relationship when you don't sleep while you're in a fog, and then you feel anxious, and then you feel depressed. Then when you're more anxious, you don't sleep. And then it's just a vicious cycle. So a lot of people can feel better by just focusing on their sleep. You feel more vitalized and energy. You know how it is when you wake up after a good night's sleep. You're ready to conquer.

[00:03:56] I had my own struggles. I was terrible sleeper in medical school. And then as a father raising children and then my career. And then of course when I lost my mom and then when I started my business, but I have found a way. I found the joy in the power of sleep.

[00:04:12] So I just want this foundation to be built and I want to share this information to as many people as I can. 

[00:04:18] Jason: Got it. So you mentioned mental health. What are some of the problems that people might be having that could be prevented by better sleep? Because a lot of people are thinking, "I sleep all right. And it's probably not that big a deal," but then they're dealing with all these health issues and these challenges. And they're like, "yeah. Sleep probably isn't even related to this.: 

[00:04:36] Bijoy John: Like I mentioned, we don't have, like a pain, if you have a pain, we're going to take care of it. So what happens is if you wake up in the morning after like seven or eight hours of sleep, if you feel good that day, then mostly you're doing all right. But if you're still feeling tired. then you have a sleep problem. And of course, if you snore, then for sure you have a sleep problem. So this is my simple question I ask people, "are you tired? Or do you snore?" So once I have that answer, then we can go into the depths of what might be causing the problem. 

[00:05:10] Jason: Got it. Okay. So snoring is basically choking, right? While they're trying to sleep. 

[00:05:15] Bijoy John: Snoring... it's like water going through a pipe. And if I'm going to narrow the pipe.

[00:05:19] The water creates turbulence. Same thing with snoring is air going through an obstructed pathway. So your back of your throat when the tongue falls down is narrowed and then air is not able to get in. And the reverberation and the vibrations that happens around it is the cause for the snoring. Of course, men snore more because the larynx or the voice box it's like a trumpet. So your sound is amplified in women is smaller and it's the, so women don't report that much snoring. So we have to pay particular attention for snoring in people. 

[00:05:52] Jason: Got it. Okay. So what are some of the simple hacks that people can do to quickly improve their sleep? And how do they know when it's time to reach out to Dr. SleepFix? 

[00:06:07] Bijoy John: So the two complaints that is "I don't sleep enough" or "I sleep too much." So these are the two common complaints in the world of sleep. So if you do not sleep enough, that's the condition called insomnia, right? So that's a time to reach out. People get all the information from the internet most of it is not right and then they try to do half of it and then they get stuck right and then also like I mentioned snoring is a main issue you have a very serious condition called obstructive sleep apnea if you're snoring.

[00:06:39] So what are the hacks? You want me to get right into it, Jason? 

[00:06:43] Jason: Yeah. How about I share some hacks I've learned and you tell me if they're valid 

[00:06:47] Bijoy John: Correct. 

[00:06:47] Jason: Yes. Perfect, man. 

[00:06:48] Yes. Because I've geeked out on some of this stuff. 

[00:06:50] One of the things, I wear orange glasses at night to block blue light.

[00:06:55] Bijoy John: You wore it during the meeting. 

[00:06:57] Jason: Yeah, my eyes were getting tired, so I put them on during the meeting. Yeah, you remember. I wear them at night or in the evenings after sundown so that I'm not being exposed to artificial light, which has blue light in it. Which I've heard disrupts sleep patterns and causes your circadian rhythm to get off track and causes you to have poor sleep.

[00:07:17] So what I find is when I wear the orange glasses, usually within maybe about three or four hours, I start to naturally feel sleepy if I wear them. So if I put them on during the day, I have to be careful because if I forget and I have them on for like three or four hours, I'm like, man, I'm starting to feel tired.

[00:07:33] Right, which is, I think melatonin starting to get produced naturally, which is like the brain starting to clean itself naturally, and then body's getting ready for sleep, right? So am I correct on that? 

[00:07:46] Bijoy John: Your hack is right. So we are creatures of light. We wake up because of sunlight.

[00:07:51] If you look at small children, they wake up at the crack of dawn. And so in the evening, we don't want that much sunlight or especially at night, I should not in the evening sunlight is actually good for sleeping, but the night. So what are we doing? We are having our phones, especially with COVID people are bringing the work into the bedroom and the light from the electronic devices. Maybe it's the tablet, it's a phone, the computer. Especially in the bedroom where there's no ambient light. It's just, it sends a signal through our eyes into our brain saying, "Hey, it's not time to go to sleep." So that's one major thing, especially in the bedroom. So melatonin, melamine is darkness, right?

[00:08:30] Melatonin is only secreted in darkness. So we have our own tons of melatonin, which does not secrete because the exposure to light. So you're right. That hack is right. 

[00:08:40] Jason: Okay, got it. So that, so the other thing that I do is I have my phone's home screen change to... I can change it to red. I set up a hack and you can set this on your phone where like if I click on it three times, one, two, three, it changes the red. So if I'm in the dark, because sometimes before bed, I'm looking at my phone in the dark or something before I fall asleep, but it's then not affecting my sleep. I also have lights in my room at night, like when I'm going to go to sleep where it's just red. So I can just make it red. So then if I put on the orange glasses or take it off, everything looks exactly the same. So then I don't need to wear the glasses as I'm going to bed. Because it's hard to fall asleep with glasses on your face. I don't want to do that. 

[00:09:25] Bijoy John: Yeah. So the bedroom has to be dark.

[00:09:27] So that's an, again, an indication for our body. "Hey, the body is taking the cues from the external environment and from within." See that the pressure to sleep is building throughout the body, but it is counteracted by. But the external influences, the sun, the noise so that's what, sometimes around 1:30-2:00, we feel that lull because your inner body is in a natural lull because of the, the sun goes down a little bit and the noise level is not that much and your body's pressure to sleep is building up.

[00:09:56] So that's why we are tired sometime in the afternoon. So that's a good hack. You're doing great with that with what you're doing there. 

[00:10:02] Jason: So as far as the bedroom some of the things that I've also focused on doing is like you mentioned light. Besides light hitting our eyes, let's say our eyes, like we're wearing a sleep mask, we can't see any light, which I have done, like I'll sometimes travel with a sleep mask so I can block out all the light if I'm in a hotel room that it just doesn't have good blackout curtains or whatever. So with our bedrooms Where we're sleeping regularly. I think it's important to kill all the led lights So there's black stickers that you can put over led lights I've used a paint pen to black out some leds on some of the things that are in my room because a lot of these things Like are just and they're always they always make them blue.

[00:10:39] I don't know why but all the leds of all the devices they put in your room. It's like they're trying to give you blue light and hurt your sleep I don't know if there's a conspiracy there. What do you think? 

[00:10:49] Bijoy John: No, see Jason, you know why the cops lights are blue There is a reason for it because blue is the first thing that our eyes sees and the lights in the stoplights is red because the red is the farthest you can see. So there is a science behind it. So blue light in the bedroom in the color blue in the bedroom is not good. Yeah. The blue lights is terrible idea to have in your bedroom. So anybody who's listening bedroom blue is not good.

[00:11:15] Jason: Yeah. So related to this orange glass in the evening, the other hack I've heard if you want a lot more energy and you want to get your circadian rhythm in sync is to just get sunlight at the beginning of the day. Is to get a decent amount of sunlight like expose your eyes to the bright blue sky and the sunshine and like be outside for the first maybe 20 30 minutes of the day if at all possible 

[00:11:37] Bijoy John: That's a great hack because you're telling your body, "hey is ready to go." So you're putting all the sun in the morning So see I said we are all creatures of the sunlight without modern invention we just revolve around the sun, right? So that is a great hack. But you have to be careful here. There are some people whose circadian rhythm is completely malaligned, and they should not be having sun in the morning.

[00:12:01] Especially, this is a syndrome I call advanced sleep phase syndrome in people who are 70 or older, who tend to sleep earlier than the, accepted norm. They go to bed around seven, eight, and they wake up at three for those people, you should not expose sunlight in the morning. It's going to have an opposite effect.

[00:12:20] So they have to get much more sunlight in the evening. So I see a lot of people walking in the evening. They feel like they're doing really well because they exercise. It's also not only the exercise that makes them sleep better. It's the sunlight. The evening sunlight is really actually really good for people to go to sleep. 

[00:12:35] Jason: Interesting. Evening sunlight. Okay. Yes. And then I guess because the evening sunlight triggers a different response in our brain. 

[00:12:43] Bijoy John: Yeah, the radiation is a little different. The wavelengths of the light in the evening is is not only the exercise, it's the rays that helps you to fall asleep. Especially people who are in the 60s, retired, they walk more. Our older adults tend to walk in the evening. That's the time they do. That's actually great for them. So yeah, they actually moving the clock forward. So you have to be careful when you get exposure to light. 

[00:13:04] Jason: Got it. Okay. Now, question related to that. We're wearing a sleep mask, but we're laying in the sun. Just an extreme example is our body perceiving light in other ways besides just our visual perception that could be affecting our sleep, I'm just curious.

[00:13:20] Bijoy John: No the only way the light goes into the brain and tells us is through our eyes. So once you cover the eyes, it's over, there's no, input to the brain for sleeping. The direct contact to the area in the brain called suprachiasmatic nucleus, which is the master gland which is controlled, that's the one that is important for the circadian rhythm it gets the influences through the eyes.

[00:13:43] Jason: Okay. Interesting. I vaguely remember hearing this weird, like case study in the, or something in the past where they, it said they were helping the military reset and eliminate jet lag by shining like blue light on the back of their legs, but so I don't know if that there's any, maybe I made that up, but I thought I remember reading that.

[00:14:02] I was like, that's super weird. So I didn't know. 

[00:14:04] Bijoy John: Legs don't have the lighting on your leg don't have any input to the brain. And of course, we have a new theory saying, we always say, It's the people who work in the farm, they're still working so hard, they tend to sleep better. It's actually the muscles also, now we are knowing, create chemicals and reactions to help us to sleep.

[00:14:21] We always thought brain was the only, source of the chemical reaction to put us to sleep. Now we also know all the muscles can also contribute. This is like new data. I think it'll take a few years for it to come to fruition. Get more details of what muscles help us to sleep. 

[00:14:35] Jason: Yeah I've heard some people mention on social media that they have recently found out that you know putting the muscles to work and doing things like weight training stuff like that actually releases chemicals that help the brain right stay sharp.

[00:14:52] Bijoy John: A lot of it, you know information coming through, we know exercise is good for many reasons, even to prevent cancer, because you are moving the lymphatic system, which helps us to clean our cancer producing cells and keeps it moving.

[00:15:03] But the one caution here, when you exercise, you are also secreting endorphins, which are stimulants. So I tell people, make sure you don't exercise at least four hours prior to going to sleep. So the best time is in the morning, but if you can, if you do it in the evening, if your bedtime is 10, make sure you don't exercise past 6 PM.

[00:15:22] Jason: So evening. To afternoon, but not, morning to afternoon, but not evening. 

[00:15:27] Bijoy John: You don't want to be close to bedtime because you're going to be up. 

[00:15:31] Jason: Got it. So flexing our muscles in the evening is like a mild form of caffeine or something. 

[00:15:37] Bijoy John: Correct. 

[00:15:38] Jason: Got it. Okay. So that's not going to give us great sleep.

[00:15:41] I've noticed. So another hack, I've got the Oura ring, which tracks my sleep. And then I also have the eight sleep bed, which does something very similar, but it might be a little bit more accurate on the data, but I really liked the eight sleep bed because it keeps me cool at night. So what about temperature and sleep?

[00:15:58] Bijoy John: Perfect question. The, again, the melatonin is secreted in lower temperature. So I tell people to experiment between 65 to 70 degrees at night so that a melatonin can be optimally secreted.

[00:16:10] So it's secretes well in darkness and lower temperature. So having thermostat at a lower temperature is the key at night going to sleep. Great question. I bought the Oura ring. I was laughing and the Oura ring is one of the number one causes of referrals to my clinic and any devices. What happens, people are getting all that information from these devices, but they don't know what to do with it.

[00:16:32] And they start to worry about it, so that actually affects the sleep. So I tell people to wear it, get the data, do something about it, and then see if it's improved. Don't do it every night and then just get on this rumination process. 

[00:16:48] Jason: Worrying about anything is probably not an effective way to get to sleep. 

[00:16:52] Bijoy John: Too much data. It's out of our brain, I think. Yeah, you cannot data mine yourself to sleep. You cannot do this. So sleep is one thing you have to do gently, right? It's like our golf swings. I tell you, you can't swing it too hard, you're going to have a mulligan. You might have to do it gently and smoothly. That's one thing, everything in our life in the hustle culture. Is great, but sleep is counter hustle culture it is against the grain of our culture and the hustle culture.

[00:17:18] Jason: You can't hiho silver for great sleep.

[00:17:21] Bijoy John: You cannot. Everybody is going the other way and getting too much information. I've never seen anybody sleep better by having too much information. You cannot do it.

[00:17:29] Jason: Got it. I went to my doctor. He's a functional medicine doctor. And he was like, he was asking me questions. He's like, "how's your sleep?" And I said, "I don't know. I have no idea. I'm asleep." And he says get an Oura ring so you can see. And it has been pretty insightful. Like I noticed patterns.

[00:17:43] And so over time you start to notice trends with your sleep, like, "Oh, like if I eat late or if I work out late or, if I do pretty much anything late, like it's messing up my sleep," it's like, Oh, your heart rate was weird, like, stuff like this. And so I don't get as good of sleep. 

[00:17:59] Bijoy John: Yeah, eating late, what happens is you have a full stomach. Food stays in the stomach for about two hours.

[00:18:03] Just that uncomfortable feeling. And then also you're at risk for acid reflux. There's tons of acids secreted around two in the morning. And so you have heartburn. And and also eating well late, what happens? The end product of any process is the energy. The end product of any energy is heat.

[00:18:21] It's not very conducive for sleeping. Like I mentioned, melotonin secretes in the lower temperatures. So many reasons you're right. So you'll get all that information. But what mistake people are doing is they don't put it through. You may be the exception. You're doing something about it.

[00:18:37] You know what I'm saying? So with data, you have to act on it. And it looks like you're getting the right information too, Jason. 

[00:18:44] Jason: All right, so another hack I've noticed when I sleep really well, so I don't want to work out in the evening, but what I do notice if I do the sauna, which almost is like a workout like for my body, I've noticed, because it shows like a workout sometimes, but if I do the sauna and then I do a cold plunge or a cold shower, afterwards and I get cool myself back down, then I sleep really well.

[00:19:09] So what's going on there? 

[00:19:11] Bijoy John: When you do the sauna, there is the release of oxytocin, the Greeks and the Romans, they figured it out there, that they're big proponents of the sauna. So you release oxytocin, oxytocin the peak lasts about four hours. And the cold plunge also does the same thing.

[00:19:26] You are releasing oxytocin, which is the love hormone, but also puts people to sleep. So that's where you are. So it does the sauna does help you the heat from the sauna and the cold. It creates oxytocin. That's where you're sleeping. That is a true fact. 

[00:19:40] Jason: Interesting. Yeah. Oxytocin I've heard called the trust hormone. It just feels safe. 

[00:19:46] Bijoy John: It's got many name. 

[00:19:47] Jason: You get it when you hug people, and when you pet a dog, so four hours of oxytocin. Okay. That's pretty good. So a lot of people, myself included, have noticed like if I have sex before going to bed, then I sleep pretty well after that as well.

[00:20:01] So is that similar? Is this the oxytocin release? Correct.

[00:20:04] Bijoy John: Bedroom is for sex and sleeping, but most people are worrying or snoring, right? So after sex, you have the release of oxytocin and that is the cause of for you to sleep better. Of course the act of lovemaking has a lot of other good components to it, but the chemical or the medical explanation is oxytocin release helps you to sleep better.

[00:20:25] Jason: Okay. Great. So like we want to maximize oxytocin before bed is, it could be a goal, right? Because that's the perfect way to go because if you're anxious, that would be the opposite, right? If we got it, we might get anxious and be concerned and worrying and yeah. And oxytocin is the chemical that says, "Hey, you're okay right now."

[00:20:44] yes. Good. Trust hormone. Love hormone. So some love, peace, and trust. All right, cool. This is good stuff. Is there anything weird or unique that's been shown to affect sleep that people are just not thinking about? That we haven't mentioned, 

[00:20:58] Bijoy John: I developed the 7 sleep proven sleep strategies.

[00:21:01] I also have an acronym for this. It's called sleep now. So the 1st hack. So S.L.E.E.P.N.O.W. So that's the 7 combine and NO together. So the 1st thing is the mistake, but people don't. The first is, S is a schedule, right? So for every plan to succeed, we all have plans in our lives. So the correct time to sleep is between 10 p.

[00:21:23] m. and 6 a. m. That's a rough time. You can go 30, whatever. But this is the mistake. If somebody goes to bed at 10, they can't fall asleep till midnight. Guess what most people do? They go to bed 9. So now they're suffering for three more hours. They're getting frustrated. They take the phone, do whatever.

[00:21:43] But I tell people, if you can't sleep, you don't fall asleep till midnight, go to bed at 1130, but make sure you wake up at 6am. So this is called sleep restriction. But you have to wake up at, 6am. So if you do this consistently for a few, at least about one to two weeks, you will start seeing, then you go to bed at 11: 15, 11, you move it the other way, but you have to wake up.

[00:22:08] Another thing I see people when I tell folks to do this, they hit the snooze, 6: 15 you have to wake up at six. Then the L is low light. Low noise, low temperature. We touched on it. Melatonin is only secreted in low light, low temperature, and low noise.

[00:22:27] We touched on it. Next E is electronics. So I tell people not to have electronics at least 30 minutes prior to going to sleep because of the light and of course the dings and the notification. I have my cell phone away from me. I keep it in the bathroom. I have an alarm for 6 or 6: 30 and I wake up.

[00:22:46] I literally wake walk there and I'm done for the night. So what happens is. When you wake up in the middle of the night and you have a tendency to look at your clock and it's three o'clock, you're like wondering, wow, it's three o'clock already? It's only three o'clock or two o'clock. It increases the cognitive.

[00:23:00] One thing will improve your sleep by at least ten, twenty percent is removing all clock, any time pieces, And your phone, even if there's a phone, when you go to a hotel, I angle it or try to unplug it. I trust my phone and keep it away from. 

[00:23:16] Jason: Especially if the clock is blue light. 

[00:23:19] Bijoy John: Exactly. Blue light clock.

[00:23:21] How many red LED clocks are there anymore? But yeah, you don't want a blue or a white light led clock. That's going to be the, even the worst, right? So just don't look at the clock. Okay. 

[00:23:31] So moving along, the next E is exercise we talked about is exercise at least four hours prior to going to sleep.

[00:23:37] Then the P is powering off your mind. So now you're preparing your body, you calmed your body by not exercising you've given your mind a chance to rest, but not having your cell phone. I like, like meditation, some apps and listening to apps on the phone, but what happens, you're taking your phone with you to bed.

[00:23:55] I tell people to meditate or do something. away from the bed. Just unplug your phone, get in the meditative mind, and then hit the bed. So the two techniques I always implement, these are my own, is the first technique to calm your mind is vivid imagination. I do this every night. I am the director of my show.

[00:24:15] You don't want to take your stress into bed. You don't want reality in your bed. You want the abstract. So I watched a show, you went last night. I thought about it. I said, how's the show? It's going to end tomorrow. I'm going to watch it again. So I'm the director. I go into this trend and then, my imagination, that's the vivid imagination for sleeping.

[00:24:32] So I'm the first guy to promote for sleeping. That works really well. And then in the same technique about powering off your mind is something called yoga nidra. Yoga nidra. Nidra means nothingness in Sanskrit. You lay down with your hands up. It's called the shavasana or the corpse pose, where you're laying down like a, corpse and just completely letting go.

[00:24:52] You can also start thinking about the different muscles starting from your head to your face. This is the cognitive behavioral therapy. One of the techniques is muscle relaxation. You just go down to your feet. So now you're given a chance. But you have to prepare. Going to bed is is a process.

[00:25:07] Everybody wants it to be an on and off switch station. It doesn't happen like that. It has to be a timer. You have to slowly work your way. You can't hustle it. So these are the two techniques I use. So the vivid imagination and yoga nidra. You had a question? 

[00:25:21] Jason: This is interesting. I remember I was talking about this when we were hanging out at the mastermind.

[00:25:25] And what really stood out to me is this after chatting, that was a new thing for me was the idea that how we get into sleep dictates how good the sleep is. And I thought, man, if I just do this and do that and do the right things and then jump in bed and lay down real quick and close my eyes, then it should be good.

[00:25:46] We, you can't. Do it quickly. You can't force it. And so calming the mind and getting to a calmer place. And I like the idea of vivid imagination and getting into the abstract, right? Like getting more into that dream state. 

[00:25:57] Bijoy John: I've been doing that for almost 20, 25 years. So continuing on so I combined NO together, no to worries, right?

[00:26:03] As humans, we worry. I want everybody to worry, but worry between 6 p. m. and 8 p. m. So let's be done with worrying around that time. So from eight on, if your bedtime is 10, you're preparing also give this example. It's like a seven course meal. You have to have the music. You have to have the wine or cheese and salad.

[00:26:23] You just can't go to the meat, right? You have to work your way. So your preparation for bed starts around 8 p. m. I've already started giving up my phone. From 7 p. m. as of as of December. So that was my resolution to be off electronics. I go hard at it from 7 a. m., but I'm at I'm done by 7 p. m. I'm not even have access to my phones. So no to worries. So we have to worry, but write it down after 8pm. Just write things down for the next day, right? So I do that, as a business owner, it was terrible, all these, employees, bills all this stuff. I write it down and done.

[00:26:57] So then the last one is, W. This is the easy part. Win by losing. This is one thing you have to lose yourself. And so you lose yourself by keeping your bedtime ritual very simple. You are the master of your sleep. Life happens to all of us. It happened to me. It happens to you.

[00:27:16] It happens to everyone. But if you have this foundation, if you have the principle and knowledge, you can do it. Win by losing, taking it easy. That's the SLEEP NOW acronym. The S is for schedule. L is for low light, low temperature. E is no to electronics. The next E is not exercise 4 hours. P is powering off your mind. NO is no to worries. W is win by losing. That's my acronym. That's the seven, strategies I teach people. And of course, there are people who ask me about medications. I do prescribe sleep medication, but that'll be the last resort. I take people off the medications. That's my goal. I do this holistic approach for sleeping. 

[00:27:51] Jason: Very cool. Yeah, I love the idea of getting rid of the worries at the end of the day. I usually can shut that down, but I know a lot of my clients, they have a difficult time with that. And so what created this process that I would use in the mornings, but a lot of my clients find it's even more effective to use at night, which is Daily planning exercise.

[00:28:10] So for those of you that are listening, you can check that out at doorgrow.com/dailyplanning, one word. And you're welcome to just use that daily planning exercise that I use with clients to just get everything unloaded from your day to be prepared for the next day. And that will just give you a greater sense of calm and allow you to go to sleep without ruminating on a bunch of scary thoughts or worrying about what's going to happen the next day.

[00:28:31] You'll feel like you have a plan. And I think that lets your unconscious kind of unravel and relax. So very cool. Yeah, this is super helpful. Really fun to have you here on the show. Dr. SleepFix. You have a book, correct? 

[00:28:46] Bijoy John: Oh, I have it right here. 

[00:28:47] Jason: Nobody's sleeping seven proven sleep strategies for better health and happiness. All right. Bijoy John. All right. How do people get this book? Everywhere? 

[00:28:56] Bijoy John: Yeah, it's available everywhere. It's official launch date is March 12th. So it's ready to pre order and you can pick it up from your favorite bookstore.

[00:29:04] So it's coming up. Okay, cool. 

[00:29:06] Jason: And how else can people get in touch with you or follow you on social or what do you want people to do? 

[00:29:12] Bijoy John: So I'm new into this process, so I don't have many social media followers, but I do post a lot of the important things. My website is sleepfixacademy. Com. You can have all the information. I have a quiz. I have free downloads. I have a sleep assessment if you have a problem. So I also have a sleep now course which is ready. So all and all my social media handles I'm known as Dr. SleepFix. So this mission is to sleep is the super power.

[00:29:37] It's a very underrated. People say "I can sleep when I die." But I tell people, "if you're going to go on this path, you're going to die" because you have a uncontrolled blood pressure, heart rate and, of course we didn't go into the sleep apnea part. You're snoring and if you're sleep apnea, make sure you take care of it.

[00:29:52] That can add 10 years to your life. So I'm on this mission to teach the world. If many people can just understand and just keep a pause, you are a better version. You feel better, you're more energetic, and you can discover the joy and have this fruitful full version of yourself. 

[00:30:07] Jason: Yeah. I remember when I really used to get really terrible sleep and you know I wasn't sleeping enough because I thought I would just be more productive if I just worked more I thought it was just work. And what I found was my body started breaking down, my joints were not recovering from stress or from workouts.

[00:30:24] I started having a lot of back pain and back problems because the body was getting experienced stress every day and it was compounding, it wasn't recovering. And so recovery is a super important thing related to sleep. And then also cognitive function. I had my clients do time studies and one of my clients did a time study And we started chatting about sleep afterwards, but he said, "I'm noticing that after three o'clock, it's taking me an hour to do things that take me 10 minutes in the morning."

[00:30:51] And he's like, "why is that?" I'm like, "your brain's running out of chemicals. Let's talk about your sleep." sleep is when we produce the chemical cocktail that we're going to use the next day. And when our brain cleans itself so that we can be productive and effective. And a lot of people tap out by lunchtime.

[00:31:06] Bijoy John: There's lymphatic system that I talked about in the body, but the brain has something called a glymphatic system. So that is the system that is activated in the deeper sleep. That's the one that clears all the muck. The muck is the one that's causes dementia, so that's when it, it moves it.

[00:31:22] Like exercise, how exercise moves the lymphatic system in the body. The deep sleep moves the Glymphatic system to move all the muck. So that's why you're more rejuvenated and we heal in our sleep. We grow in our sleep. The human growth hormone that is needed of course, for children and babies, but for adults, for muscle building.

[00:31:43] That is secreted maximally in deep sleep. The thyroid functions alterations. There is increased catecholamines when you're not sleeping well, like norepinephrine, that causes you high blood pressure and diabetes. So if people have uncontrolled diabetes, if you have uncontrolled blood pressure, if you're in a mental fog, you're anxious, you're tired, you're depressed, and if your sexual function is low because sleep also affects one of the common, see, I see most of the time the low libido is associated with untreated sleep apnea.

[00:32:10] So all this function, it affects you from head to toe, your heart, your brain your digestive system. So it is if you sleep well, you can optimize all this bodily functions. 

[00:32:21] Jason: Okay. So you mentioned a couple things and I know a lot of people are concerned nowadays because a lot of people are fat and not healthy. Weight gain, water retention, cortisol spiking? Yes. Like stress, like all these things are related to poor sleep. And what did you say? What causes low libido? 

[00:32:40] Bijoy John: Have a sleep apnea there's less oxygen to the genital organs. Like the test is don't get enough oxygen.

[00:32:46] So that they don't produce much testosterone. So that's one of the treatable conditions or sexual dysfunction and you and also the weight. What happens, the weight is controlled by two hormones called leptin and ghrelin. Leptin lowers the appetite, ghrelin increases the appetite.

[00:33:03] What happens when you don't sleep, this ratio is altered. You have less of a leptin and more of ghrelin and you gain weight. And also by just by the mere fact that you are being awake, you have more chance to eat. So you're snacking, guess what you're snacking? You're snacking high glycemic foods like potato chips, sugary drinks, chocolate.

[00:33:25] Guess what? If even if you consume that four hours prior to going to sleep, your quality of sleep is affected that night. So that's why shift workers have a tendency to gain more weight because they are more awake compared to the people who don't work shifts, especially the night shift workers. We have not even gone into the accidents, the errors, sports, academics.

[00:33:44] We have the whole slew of things we can talk about, Jason. 

[00:33:47] Jason: Yeah. When you get into that, like not getting enough sleep, you are functioning almost like a drunk person. They found like driving tests and stuff. We could talk about this stuff forever. I love the biohacking stuff. I love health. I feel like it's a superpower to be able to focus on this stuff.

[00:34:02] Yeah. Again, really appreciate you coming on the show. This was really fun, super interesting. I hope this was really helpful for all of you property management business owners that are out there listening, that are stressing out and not getting enough sleep. Sleep might just very much like change your life and help you cope with more, help you function more, help you get more things done.

[00:34:21] It's a secret hack that I coach clients on in helping them add more doors and grow their business. And if you want to help growing your business, reach out to us at DoorGrow and Bijoy. Thanks for coming on the show. 

[00:34:32] Bijoy John: All right. Thanks, Jason. Sleep well. Be well, my friends. So let's go sleeping. 

[00:34:36] Jason: All right. Bye, everyone.

[00:34:37] 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! 

[00:35:04] 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.

Feb 28, 2024

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.

You’ll Learn

[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

Tweetables

“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.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[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.

Feb 23, 2024

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.

You’ll Learn

[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

Tweetables

“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.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[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.

Feb 21, 2024

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.

You’ll Learn

[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

Tweetables

“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.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[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.

Feb 7, 2024

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.

You’ll Learn

[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?

Tweetables

“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.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[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.

Feb 2, 2024

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. 

You’ll Learn

[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?

Tweetables

“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.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[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.

[00:39:59] 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! 

[00:40:25] 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.

Jan 31, 2024

Have you been looking for ways to improve your owners’ experiences as property management clients? 

In this episode, property management growth experts Jason and Sarah Hull sit down with Matthew Kaddatz from Appfolio to talk about elevating the owner experience in property management.

You’ll Learn

[01:35] Getting started in the property management industry

[05:18] Improving relationships with owners and investors

[10:24] What does your ideal client look like?

[18:31] Why you get stuck doing things you hate

[26:25] How elevating the owner experience helps you

Tweetables

“Once property management gets you, you're stuck. You're not going anywhere.”

“I think one of the biggest mistakes property managers make by not having clarity on who their ideal customer is they try to get everybody.”

“‘No’ is often better than ‘yes’ if you're being careful and focused.”

“I don't think that you can really figure out a lot about your clients and what they truly want, what's really important to them, if you're unclear on what you truly want.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: I think one of the biggest mistakes property managers make by not having clarity on who their ideal customer is, is they try to get everybody. Then they're taking on a lot of accidental investors and they churn out like after a year. 

[00:00:12] 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're interested in growing in business and life, and you are 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. 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, along with Sarah Hull, my wife, co-owner and COO of DoorGrow.

[00:01:11] Now let's get into the show. All right. Today's guest. We have Matthew Kaddatz from Appfolio. So Matthew, welcome to the show. 

[00:01:22] Matthew: Yeah. Thanks for having me excited to be here. 

[00:01:25] Jason: So we have not yet had somebody from AppFolio, but we have a ton of clients that use AppFolio and we've heard great things about it. The perception has always been, it's the Mac of the property management software out there.

[00:01:37] So, Matthew, why don't you tell our listeners a little bit about you? How did you get into property management into this industry? And and you know, what do you do at Appfolio? 

[00:01:48] Matthew: Yeah. So, I've been in property management pretty much my whole professional career. I studied computer science in college, realized I didn't want to be behind a computer all day and knew some developers developing some land, and they were looking to turn over the management and there weren't a lot of local operators. And I was like, "Oh, I could do it." You know, naive, 22, and 2006, right? So that all thought the best way to make money is real estate. It's 2006, everyone was making money right at the brothiest point in the industry.

[00:02:23] And I went down and started the property management company. These developers were my first contract and I ended up really liking the business, building the business. I grew it in the local area, did property management, community association management, a little bit of short term rentals, small, little, mostly second home market. And had a fun time growing it. Ultimately, I ended up selling it to an outfit out of Texas called Associa, and was looking to do something else and found my way to AppFolio. 

[00:02:58] Jason: All right. Now you are then, based on the numbers you shared, you're about to hit the big 4-0, right?

[00:03:05] I am. And did you ever think as a kid when you turned 40 someday that you're going to be doing property management stuff?

[00:03:13] Matthew: No, never. Even when I sold my business, I stayed around for two years and was looking for something else. I looked hard to get out of the industry. I wanted something different and the furthest I could get was a technology company that provides software for the industry.

[00:03:31] And you know, I joke around once property management gets you, you're stuck. You're not going anywhere else. 

[00:03:37] Jason: You know, a lot of property managers joke about it and they complain and they throw out memes like about drinking wine is solving their problems, you know, and stuff like this. But I fell in love with the industry because I love how, 1. MRR is a beautiful business model. Yes. It's monthly residual revenue, right? It's the ultimate business recurring revenue, monthly recurring revenue. And I love the residual income of a coaching business and property management is similar.

[00:04:07] And so what I love about the property management industry is that it is it's similar to me, right? The people that I get to serve and they're my people. They're a little bit nerdy sometimes. They tend to like technology to some degree, or they have to at least use it. And they they're entrepreneurial and they're not just the sales oriented person that's just hunting and chasing the next deal they want to build. That recurring revenue. 

[00:04:35] Matthew: You know, the SAS business model, like technology, like AppFolio is very similar as well. The parallels and just how we think about our customers and how our customers think about their customers are wildly similar, which I think gives us some insight into just how to build great software.

[00:04:54] But I too am obviously attracted to the business model. It's a really good business model. You're not always hunting for that big fish to get or whatnot. You have predictable revenue and that gives you some comfort to take a step back and kind of think about what I truly love is like strategic priorities.

[00:05:16] Jason: Yeah, it creates some stability. So the topic we're going to get into today is elevating the owner experience. And so, where should we start with this?

[00:05:27] Matthew: Yeah, good question. So I've been my job at AppFolio is to really focus on small business property managers and make sure we're building product for them. And I've been doing this for two and a half, almost three years now here. I've had other jobs AppFolio, but this recent gig has been really focused on the small business property managers and you know, six to eight months into the job, I realized the owner of the property is just so fundamental to how the SMB industry works, which is less true as you go high up market into like large multifamily. The relationship between the property manager and the property owner is just so important, and I think really understanding that dynamic from my perspective, like helped us think through how we're going to innovate and build software to make those relationships better to leverage software. But what got me more excited was just learning how great property managers think about this, how they think about acquiring these people, how they think about onboarding these people, how they think about retaining these owners and how the group of property owners, it's not a homogenous group, right? Like there are different subsets.

[00:06:50] A person who owns five four plexes is going to think and operate different than a person who had to leave town for work and is giving their house over to property manager because they had to leave town for work for a period of time. So just understanding the dynamics there is really important.

[00:07:13] And the great property managers, I think do that well, but it's amazing how many people don't think carefully about who their clients are, what their interests are and how diverse they can be. 

[00:07:24] Jason: What do you think are some of the most common mistakes people are making? In the small business category with their owners?

[00:07:32] Matthew: I think they're pushing to either one of two polarizing extremes, right? Like one size fits all, my services must fit for everyone in which like they don't because it's not a homogenous group or, I will be everything to everyone which doesn't scale. And that's probably the more dangerous thing. I think property management tends to attract people great at customer service who like to say yes and hate to say no, and it's hard to not be every thing to everyone. If that's just sort of your disposition that got you to be very successful at providing great customer service, you can't grow a business that way.

[00:08:15] You can't scale a business that way. Once you have to hire people to manage owner relationships. 

[00:08:20] Jason: Yeah, we see these problems as well. The one size fits all usually relates very simply to how property managers are pricing. Like everybody's like, "we'll just charge 10 percent or we'll just charge a flat fee."

[00:08:32] And one of the things that we teach is this three tier hybrid pricing model where you're focused that psychologically on at least three different types of buyers based on their motivation or based on their pain psychologically so that it's not just one size fits all. It's tailored towards the pain threshold when it comes to spending and it's tailored towards, you know, the level of service or safety and certainty when it comes to like what they're hoping to spend money on.

[00:08:58] And so that's really interesting. And then you mentioned: don't be everything to everyone. So I have this slide and one of my slides in my pitch deck says "you're not Burger King." " your way right away," right? And so "don't be Burger King" is what it says. So, and the opposite is like to be the lighthouse, right?

[00:09:16] The lighthouse is guides, but it doesn't move, right? It has boundaries and standards. 

[00:09:22] Matthew: Yeah. So many great operators have done too much of everything to everyone and they get to what, 300 ish units and they can't figure out how to get beyond. They just can't figure out how to scale because. It actually costs a bit of money to go from 300 to 600 units.

[00:09:40] You have to like reorganize a bit. 

[00:09:42] Jason: That's funny. We call the stage between two to 400 units, the second sand trap. 

[00:09:49] Matthew: Yeah. 

[00:09:49] Jason: Interesting. It's basically the swamp of success. We call it the team sand trap because usually it's because staffing costs are so high at this stage, they end up stuck and it's usually they think they need more processes.

[00:10:02] But what they actually need are better team members. 

[00:10:04] Matthew: Yeah, and I would argue higher degree of focus. Yeah, the way I like think about my customers is I get very clear on who they are and what they care about. So, you know, AppFolio is a large company.

[00:10:19] We have lots of customers and as much as we'd love them to be homogenous, like all the same property managers are very diverse group of small businesses. So it's really important for me to understand the profile of business that I'm solving for what type of product and service are we building for that specific profile? So much so that I want to be so intimate with that profile of customer that if I meet them, it's easy for me to have a conversation with them. I know what their common pains and challenges are. I know what they care about. Like I could talk to them for two hours and they were like, "Oh, it felt like I've known you forever." That's how like close I want to understand their types of businesses.

[00:11:04] And I think that's similar for property managers as they reach out to different types of owners. So you have accidental landlords that care about something very different than an like mom and pop investor that's trying to grow a real estate portfolio. And depending on your market might depend on which one of those or both of those you focus on.

[00:11:26] But having a degree of focus and on that specific buyer or owner that you fit best for is really important to scale because then you can build systems and processes around that. You can build what you mentioned earlier, pricing and packaging around those people. And you're not trying to do everything for everyone.

[00:11:49] You're focused on solving the needs of. A specific like group of people. They, I think it's Seth Godin who talks about a thousand true fans. And I think his point is to be very successful in life, you just need to have a thousand people that really love what you're doing and want to pay you to keep doing it.

[00:12:09] You think about it, like people are looking for massive scale, but you can actually have an incredibly successful business just by solving the needs of a thousand people. 

[00:12:19] Jason: So when you said be everything to everyone, I was immediately thinking, "Oh yeah, some property managers just like are doormats."

[00:12:25] They're trying to do everything. What you're talking about, I think is also super powerful, which is this, having this, a higher degree of focus, which you said. And I was thinking we'll focus on what, right? And you're talking about like really getting clear on their avatar, like really getting clear on who they want, what their ideal customer looks like.

[00:12:42] Sarah does a lot of work right now with our clients in our rapid revamp program, focusing specifically on this. 

[00:12:49] Sarah: Well, I think one of the things we do and actually we're going to be getting into that in a couple of weeks right now, what we're focused on is figuring out their why and their business why.

[00:12:59] And I don't think that you can really figure out a lot about your clients and what they truly want, what's really important to them, if you're unclear on what you truly want. It's like that saying, like if you can't love yourself, you also can't love another person, so don't get into a relationship. It's kind of like that.

[00:13:20] So if you're unclear about what you're doing and why you're doing it. And why... the big thing is, why does it even matter? Then if you can't answer that question and feel really solid in that answer, then you're never going to be able to figure that out about other people either. Because if you can't start with yourself you're never really going to absorb the information the way that you need to in order to create a really powerful relationship with a client.

[00:13:47] Jason: Yeah. Powerful. If you get into a relationship with somebody and they have more clarity on what they want than you do, they win. Totally. You are giving up what you want because you just never got clear enough on it. We all have things we want. It's built into us. Like we have desires. But a lot of us aren't willing to just want things like the, a book I read recently on 10x is easier than 2x kind of talks about this a little bit on the audio book.

[00:14:15] They were talking about wanting and how important it is to want, but society, religion, everything kind of conditions us that, "well, you don't need that." And that's what we always hear. "You don't need that. What do you need that for? What do you need that for? Why do you need a house?"

[00:14:29] Matthew: You know, I think about what I've noticed is a common theme of the skills that got you here aren't going to get you there. And, what I mean by that is like a lot of people do fall into property management by accident.

[00:14:42] Yes. Yeah. I, for one, can definitely relate to building a business that tried to do everything for everyone. And that helped me get a foothold into the market. It helped me build a reputation of a doer. I was really successful at creating customers who really liked me. But I sold the business before I ever learned to scale it.

[00:15:04] Effectively. I've learned those scaling skills working in a software company but I've had to go from highly successful doer to slowing down, thinking strategically, getting to the why and being careful about choices and realizing like "no" is often better than "yes" if you're being careful and focused.

[00:15:28] And I think that set of skills is, at least for me, it was incredibly hard to go from doer to strategy is kind of how I talk about it or think about it. And that is how you get a business from working very successfully, but working 60 hours a week to growing. And maybe you're still working 60 hours a week, but you're not unclogging a toilet because you can't get ahold of a maintenance person and you have a plunger in the back of your truck or whatever, you know, you're building systems and procedures to allow things to grow sustainably. 

[00:16:09] Jason: Yeah, there's a really good book. We've had the author on the show and he's spoken to one of our conferences.

[00:16:14] Mike Michalowicz wrote a book called The Pumpkin Plan in which he talks about this analogy of growing a business is akin to like growing prize winning pumpkins in a pumpkin patch. One of the principles is it's impossible to grow the business that you want if you plant the wrong seed. You cannot grow a prize winning pumpkin if you plant a pumpkin pie pumpkin for example. It's just not going to be big enough. Right? And I think you'd mentioned accidental investors. I think one of the biggest mistakes property managers make by not having clarity on who their ideal customer is they try to get everybody. Then they're taking on a lot of accidental investors and they churn out like after a year.

[00:16:52] Right. And churn is it's impossible to outpace with adding more doors and growth, a bad churn rate. That's really a grind. Like that's brutal and painful. And it actually takes less work to work with 10 year buy and hold investors, less work to convince them to use you, less work to do stuff versus you know, working with accidental investors.

[00:17:14] And so if a business builds a business off of the back of accidental investors, they're building a business that has a high churn rate, the MRR model gets destroyed, and it's a grind, and their business will more likely fail or stay stagnant for years. 

[00:17:31] Matthew: That makes total sense. What I think about too is like, how do I build software tools that help the property managers elevate the conversations they're having with their intentional investors, mom and pop investors, or how do they convert an accidental investor into a more active investor? Like How do we help them show property performance and move the conversation beyond the like three bids we got for the last maintenance issue to what's the overall longterm value of this property and what type of return should it produce? And what's your ideal investment, what types of returns are you looking for? Does this asset actually fit what you're looking for? because property managers, they could underwrite markets better than anyone else can in terms of property investment.

[00:18:30] Jason: And I think they're connected to reality. You know what actually works and they know which things need to be improved or change on a property to get the best rent rate. They like, they know all this. They're the best equipped to handle investors, period. 

[00:18:44] Matthew: And they're stuck having these, like, what arguably are low level, like not important conversations around, "do we like this maintenance bid or that maintenance bid or like the tenant paid three days late. Are you sure we should renew the lease?" Like, like stuff that's like fairly insignificant for the overall, like performance of the assets. 

[00:19:06] Jason: Yeah. Yeah. I agree. Like big focus on the minuscule things that really aren't that significant or that important. And a lot of times it's, they've just set up a relationship that involves way too much communication. Just unnecessary and irrelevant. And then I think that's just has goes to setting boundaries. I mean, Sarah was able to set amazing boundaries when she ran her property management company, like her stats and metrics were ridiculous from what I've seen inside thousands of property management companies.

[00:19:37] And so, I mean, she had like 60 percent profit margin, 260 doors, C class properties and ran it remotely part time with one part time person boots on the ground. Like it's insane. And then we see clients that are like the complete opposite. They're like working like a dog with 50 units and like stuck in the first sand trap.

[00:19:57] Sarah: I hear them say like, "I have 37 and I work like 58 hours a week." I don't even know what you're doing. What are you doing? How? 

[00:20:03] Matthew: I can relate to that. 

[00:20:05] Sarah: I don't understand what you're doing. I don't get it. 

[00:20:08] Jason: The testament to having a really sharp operator in a business. She makes us a lot more efficient. So, so how does Appfolio help with all of this?

[00:20:17] So you've mentioned you know, having some clarity on the customer and, you know, getting clear on who you want. How is Appfolio software facilitating these owner relationships? 

[00:20:29] Matthew: Yeah, our main channel is the owner portal that we have, right? That's the main channel that we can build technology in that allow property managers to communicate better with their owners.

[00:20:44] So we've been making a lot of investments to bring property performance into the owner portal in and visualize it via dashboards to give more insight to the property owner about how the property is performing. I think the first problem that we solved rather successfully based upon customer feedback is how can I get data to my owners so they stop calling me about things that are low value and relatively trivial?

[00:21:16] So like getting all of that, like did they pay their rent on time? Approving maintenance work orders, like simple things that most of the time can be just a click of a button and happen via technology that's been like, now we're looking at like, what are other ways we can help visualize the performance of the property so that property managers can, if they want, have what I would call like a more asset management conversation as opposed to a like operational conversation.

[00:21:49] What I believe is going to continue to be true is there's going to be more consolidation of single family, and there's going to be less accidental landlords over time and more people that are actually looking for real returns on their assets. And so property managers are going to have to learn how to have asset management type conversations which talk about cash on cash return, IRR, those types of things that might sound intimidating.

[00:22:22] They're really not that complicated if you spend some time learning them. We basically want to empower our customers to have those conversations easier and try to be thought leaders for the real estate investing space, which they serve and typically are their best customers. 

[00:22:40] Jason: Yeah, I love that.

[00:22:42] Sarah: So the, I feel like our ROI calculator does a really good job of that. And that's something that's new. So most people have no idea what that is. because we just rolled it out. But we gave early access to some people who had attended an in person event last month with with us. And they all really loved it.

[00:23:02] But what I think I like the most about it is a lot of property managers, they have great knowledge. They have great understanding and they have great data. Sometimes, not all the time, but sometimes there's a little bit of a gap. When an investor or there's a little bit of an like just the clench, right?

[00:23:20] When an investor, like a really savvy investor calls, any property management owner and says, "Hey, you know, I'm looking for, you know, properties with X cap rate," or, you know, I'm, you know, looking to get this kind of right. And sometimes they're like, "Oh, I don't know how to approach this conversation. I just don't. Maybe I know some of the data and I just don't have all of the data. But I think our ROI calculator really helps with that because it kind of breaks down. You just enter it and it's really easy. You can get it from the MLS. So literally anyone can do it. You just, you don't even have to be a real estate agent. You just pull the data from the MLS. And there are certain things you might need a property manager's guidance on things like, you know, how much might the rehab take and how much is market rent for this property or this area.

[00:24:11] And from there, it'll show you, you know, does this property cash flow well? And what kind of tax benefits do you get from owning and holding the property? Because everyone, I think when they think about real estate investing, they think, Oh, it's cash flow. It's not always about the cash flow. There's so many other ways to actually make money in real estate.

[00:24:37] And cash flow is a small little chunk of the pie. So I think the ROI calculator really helps empower property managers to have these really great deep conversations with realtors and with investors and do so confidently, not just, "Oh, well, I think this will be a good property to invest in, or I feel like this is probably a good..."

[00:25:03] We know because now we have the data and now it just comes down to: do the numbers work or not? 

[00:25:10] Matthew: Yeah. What you're talking about sounds really familiar to what I call like underwriting. And that's really common in multifamily. Every single multifamily operator or investor underwrites a property before acquisition so that they have a pro forma.

[00:25:28] They know how it's going to operate and that will happen more in single family over time. It's just been such a fragmented market that is less mature, but the returns and yields are higher. And that's why you have invitation homes and other big, large owners that own nationally in this single family space, because if you can figure out how to buy in a market that's working, has the right fundamentals and is working, can get quite a good return. And so, yeah my belief is everyone in this space needs to learn how to have these conversations. And our part is to build as much technology as we can to make it easier for people to navigate.

[00:26:16] What I view is a world that will continue to change and mature and get more sophisticated over time. 

[00:26:25] Jason: Well, love it. I think to wrap this up, I think it's really an interesting thought to, you know, when people are picking property management software, I don't think the owner portal is at the top of their list.

[00:26:36] I don't think it's their main focus. They're like, "how is this for me? How is this for me?" Instead of the person that's going to pay them, you know? And so I think this is an interesting take or an interesting concept that Appfolio is placing some attention to focus on. You know, optimizing the owner portal and maybe innovating there to improve the owner's experience, which in turn will benefit the property manager and hopefully help them retain clients longer or showcase the value maybe depending on how you develop it, even convince accidentals to turn into buy and hold long term investors, you know, like, because they can see some numbers and some stats and go, "why would I like give this up?"

[00:27:14] But I think it's an interesting concept and And it also adds some validation to our ROI calculator that we brought to the industry to, so, well, Matthew, it's been great having you on the show. How can people find out more about Appfolio and any parting words for our listeners?

[00:27:29] Matthew: Yeah, go to our website. I'm also pretty available on Facebook, Twitter, LinkedIn. So look me up. Hopefully my name's in the show notes, Matthew Kaddatz at appfolio.com is where we got. I love having conversations with property managers about just what they're experiencing in the business. So always happy to have a conversation with anyone.

[00:27:50] Thank you both for your time. Really appreciated the conversation. Excited what you guys are up to. Sounds like there's some overlap and parallel, which is always a good thing. 

[00:27:59] Jason: Well, awesome. Great having you on the show. Thanks Matthew for being here. All right. So if you are a property management entrepreneur, you're wanting to grow your business and you are interested in that ROI calculator that Sarah mentioned, make sure to reach out. 

[00:28:13] Sarah: It's live now so everyone can get it.

[00:28:16] Jason: So basically it'll show the the ROI on a property, so they can contrast this to like investing in stock or anything else and generally the property is going to win, right? You know, on almost anything. There's no way people can get these kind of returns if they invest. And tax benefits. The tax benefits.

[00:28:35] Sarah: The tax benefits, like this is where it's at people, the tax benefits. And the nice thing, I will also plug this too, is it shows you on a particular property, if you were to buy it cash versus if you were to finance it because sometimes one or the other like totally wrecks the deal Or sometimes one or the other you're like, "well, this is what I want. This is what i'm really looking for tax benefit wise or cash flow wise." Well, okay, then if that's what you're looking for now, I know as a property manager or as a real estate agent. Now, I know which way does the deal make more sense for you? Because perhaps it doesn't make sense if you buy in cash, if you're looking for cash flow or vice versa, right?

[00:29:17] So it kind of gives you the, you know, here's if you do it this way, this is what it looks like. And if you do it this way, this is what it looks like. And it shows you the benefits of both really of both on one report. And it's it's really great. I think it makes it I think it's streamlined everything that make things super simple and it makes these I think one of the big problems really is there are some investors that know how to do this.

[00:29:43] Like we, we talk to them sometimes and they can just, they spit out. They're like, "Oh, I know based off of this data, this is how the taxes would work." But I would say the majority of people, they aren't as familiar with the tax code because it's not a very interesting read. So if they're not as familiar with the tax code, they might not look at it through that lens, or they might miss something.

[00:30:10] This is really nice because it will show you exactly, you know, here's all of the tax benefits, and here's actually what it looks like on this particular property with these particular numbers. Yeah. 

[00:30:20] Jason: So special shout out to John Chin for working closely with me on developing this. He has a certification for real estate agents to become investor savvy, all the certified residential investment specialists or Chris.

[00:30:34] So, you know, check that out. And we, I work closely with John for months developing this tool and getting it to work in a certain way that it outputs a nice, pretty PDF. And what's really magical about this is that this is a lead generation tool so that you can provide these documents to on each property.

[00:30:56] You can provide an assessment for real estate agents, and it's branded with your brand and you can give this to real estate agents. They will come and fill out a form and submit a property so that they can get this. You will give it to them. You can create a video about it and send them the video and this document.

[00:31:13] We have give you a script for this as well, and you then have this tool or this resource and they're giving it to their investors, the investors. It's already got property management factored in as part of the investment strategy. And so it's part of the conversation. It's an assumed given thing. So this allows you to get property management clients is the bottom line.

[00:31:34] This is why we developed this for our clients to help them grow faster. And our clients are loving having conversations around this. Yeah. 

[00:31:41] Sarah: And they're like, "I'm going to plug this on my website. That way I can just get all this traffic on my website. I can get people right there. Easily accessible. I can promote it right from there. The data goes right to them." It's fantastic. 

[00:31:51] Jason: Yeah. This allows you to help real estate agents look smart and look good with investments because most really aren't that good with investments. They aren't familiar. A lot of real estate agents don't even have a single investment. And so 50 percent real estate agents didn't even do a deal last year.

[00:32:05] So let alone with an investor, right? So this allows you to help some of them become more investor savvy and feed you more deals as a property manager. So pretty awesome. So anyway, reach out to us at doorgrow.Com to get access to the ROI calculator. And I guarantee it's going to make you a lot of money if you use it effectively.

[00:32:23] All right. So that's it for today until next time to our mutual growth. Bye everyone.

[00:32:29] 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! 

[00:32:56] 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.

Jan 27, 2024

Kent Hardman is a property management entrepreneur who took his property management company from zero to over 120 doors in less than a year! 

In this episode, property management growth experts Jason and Sarah Hull sit down with Kent to talk about the mindset changes and routines he implemented to kickstart and grow his property management company.

You’ll Learn

[04:51] How your personal life impacts your business

[08:23] Shifting your mindset toward growth

[17:44] 10x-ing your business

[24:48] Changing your life and business

Tweetables

“Self-care is the foundation. You’ve got to start there. Put your own oxygen mask on first.”

“When it's somebody's doing sales and they start to get evidence, that's when magic happens because then we have our confidence.”

“You’ve got to have that long-term vision to get through that kind of rut of a week.”

“If you have more than 3 priorities in your life, you have 0.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: Self-care is the foundation. You got to start there. Put your own oxygen mask on first. 

[00:00:05] Kent: Yeah. The plane's going down. You're supposed to put your mask on first. You know, how can I help my daughter if I can't even help myself 

[00:00:12] 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're 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.

[00:00:36] 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, along with Sarah Hull, the Co-owner and COO of DoorGrow. Now let's get into the show.

[00:01:12] And we're hanging out here with Kent Hardman. Kent, how you doing, man? 

[00:01:16] Kent: I'm doing well. Glad to finally be here.

[00:01:19] Jason: It's good to have you. So you've been a client for how long now? 

[00:01:23] Kent: About a year. 

[00:01:24] Jason: About a year. And this has been quite a journey for you. You're in a very different place you were, you know, now from a year ago. And so why don't we go back and why don't you give the listeners a little bit of your background and history so they get an idea of who you are and what got you into property management. 

[00:01:40] Kent: Sure. Yeah, so I'm here in Cincinnati, Ohio. I grew up in Cincinnati. Won, the parent lottery had a pair of awesome parents, and I grew up in this old tutor and from a young age, just I was fascinated with architecture, real estate. Went to Miami University here, close to Cincinnati had what I refer to as my real job for a couple of years worked for a manufacturer. In the marketing department and I just knew it wasn't for me.

[00:02:06] I always wanted to get into real estate. And you know, it was about 2006. I was networking with real estate companies. Nobody was hiring because of the economy. 2008 happened and literally I got into real estate in September of 2008, you know, people were running for the doors and I was running into a burning building.

[00:02:25] And started out, I got my real estate license first, because that was the easiest thing for me to do. And did the realtor thing for a little bit, nothing against real estate agents, but I just, I had bigger ambitions than that. And got into buying rental property in Cincinnati and at the time my father retired financially, he had some cash to throw at some investments and me and my dad started buying apartment buildings and how I got into property management was just learning by doing, doing it for myself. Bought a bunch of apartment buildings, a lot of 10 families.

[00:03:00] That then evolved into doing some urban development in Cincinnati. Cincinnati has recently gone through a great renaissance, so I was also in charge of doing the property management, but then also putting deals together development type deals, specifically in historic type shells that me and my dad would buy and, you know, build new on the inside.

[00:03:19] And going back, so I'm 44 right now, going back two years ago, I was trying to kind of figure out what my second act is going to be, and, you know, I just identified how much I enjoy property management. Everything that you listed at the beginning of of your podcast, that's why I'm in it. And, you know, I love the flexibility, the freedom. I just enjoy the different people I meet, both from landlords to tenants. 

[00:03:43] And, yeah, so then I joined DoorGrow about a year ago. And it changed it from just a thought to me actually being serious. Like, yeah, I'm actually doing this. 

[00:03:53] Jason: So where were you at when you joined DoorGrow? What was going on that made you decide, "Hey, I need to get some help or I want to join a coaching program." what was going on?

[00:04:02] Kent: You guys found me on Facebook. You know, some ads start popping up. I'm like, you know, "what is this?" And clicked on it. And immediately, you know, in the original video, I saw you just jumped right into mindset and I was like, "wow. Okay. This is, you know, a property management type coach with mindset." I'm like, "that's a pretty potent mix. And yeah, just at the time, personally, I was in a really rough spot that I'm happy to dive into if you like. And yeah, DoorGrow just helped me just get the momentum to start making some phone calls. You know, I was sitting there having the idea to do it, but not doing it.

[00:04:37] And I was like, "well, I'm going to join this." And by doing that, it just gave me the confidence to, you know, start reaching out to people and "hey, I'll manage your property."

[00:04:47] Jason: Yeah. So, well, cool. You had mentioned you know, you were struggling with some stuff. What was going on in your life at the time that you joined the program?

[00:04:55] Kent: Sure. Yeah. A lot from what I remember. Yeah, so, long story short, I was in a mentally abusive relationship with somebody, and we were not married, and something happened that I was able to get her out of my life, well then, our daughter, we share a daughter together that I basically raised by myself, in the state of Ohio, women have all the rights over children. And she got at me, and I didn't see my daughter for about six months. I compare it's about the closest thing to losing a child that you can, you know, get to my sense.

[00:05:26] I didn't, but it was basically on that level. 

[00:05:29] Jason: There's nothing to make you value your kids like somebody taking them away from you So, my kids are what got me into entrepreneurs and that's really what drove me to be able to have the flexibility to control my day and my life and my weeks so that when I had them, I could spend time.

[00:05:43] It was a big deal to me. So, but their perspective is probably "dad's always working because he's working from home," you know? Being able to be an entrepreneur and have that freedom was what really drove me to do what I do. So yeah, I remember us having some pointed conversations, like you were struggling, I think, just cognitively or mentally with everything that was going on with you. There was a lot of stress. You were dealing with a lot of stuff. And my perception, from the coach's perspective is that your confidence was kind of shot. You just like, you had the skill, you had the knowledge, and we could teach you the stuff to do, but in the beginning you really weren't believing in yourself.

[00:06:23] Kent: Yeah, 100%. Yeah. I mean, you know, mentally, I'm struggling just to get out of bed. I mean, it was a challenge just to face the day, you know, and I'll never forget at the time. I went to go see somebody a therapist talk to and she said, "oh, what are you doing?" I'm like, "well, I'm trying to do this property management thing."

[00:06:39] "Well, what do you do on a daily basis?"

[00:06:41] "Well, I call people that don't want to, you know, hear from me" and, you know, and she's like, "probably need to get another job." I'll never forget. 

[00:06:49] She said, "well, why don't tomorrow you call one person and then from there, you know, try to do better the next day." And at the same time, I reached out to a good friend of mine, probably my closest friend.

[00:06:59] And I just said, "Hey, man, I'm not doing good, you know, like, what should I do?" And he said, "man, concentrate on the little things. You know, "are you taking care of yourself? You know, are you eating good? Are you sleeping? You know, are you keeping a regular routine with the sleep schedule?" I wasn't doing any of those things, you know, and so just-- 

[00:07:15] Jason: One day, we had a similar conversation.

[00:07:17] I'm like, self care is the foundation. You got to start there. Put your own oxygen mask on first. Yeah. 

[00:07:23] Kent: So, yeah, you know, exactly. Yeah. The plane's going down. You're supposed to put your mask on first. You know, how can I help my daughter if I can't even help myself and, you know, it just started just one day I got out of bed and took a shower and I'm like, wow, that's more than I've done in a couple of weeks. And then I picked up the phone and the next day I called somebody else. And then it got into a point of me just, you know, I'm not naturally a outgoing sales, salesy type person. And you know, then I just start killing it. I just enjoy the numbers game. I enjoy that I could have, I could call 50 people and it wouldn't bother me 49 of them wouldn't want to talk to me.

[00:08:02] It'd be that one, you know, just that feeling of just, you know, that home run that you hit, like, man, that was worth it, you know. And that's how I started. I just started calling strangers. I have a specific geographical area that I targeted and I had a way that I hunted down their information. It was a lot of data mining, but it was just the dialing 

[00:08:20] for dollars is how I got my start. Yeah. 

[00:08:23] Jason: So what shifted being involved in the coaching at DoorGrow? What do you feel like really had an impact for you and how did it help you? And how many doors did you have when you started with us? Let's start over there. 

[00:08:34] Kent: Zero. 

[00:08:35] Jason: Okay. Zero doors. How many doors are you at right now?

[00:08:38] Kent: 107. 

[00:08:38] Jason: That's awesome. Yeah. That's awesome. Thank you. And so, you know, where do you think you would be if you didn't have DoorGrow? How, how did DoorGrow contribute? How would this be different? 

[00:08:49] Kent: Yeah. Well, you know, the first question you asked, you know, how did DoorGrow help me? Sense of community is the first thing that came to mind.

[00:08:56] The fact that I was joining forward thinking property managers. You know, I felt like I was at home because it's something that, you know, I believe in, I believe the industry is a little behind the times and a couple of different areas. Technology being one and, you know, we can dive into all the other areas, but just.

[00:09:13] I felt like I was in a place where people understood what I was trying to do professionally. And, you know, that was a big thing, the community, but then another big portion of it was having somebody holding me accountable you know, I'll never forget Morgan reaching out to me, "hey, how can I help? How can I help?" I'm like, hey check in with me, you know, make sure I'm calling my 50 people a day, you know, just do that weekly, you know, because then I'm telling you, I'm doing it. If I'm not doing it you know, I feel a lot more responsible if I'm telling somebody I'm going to do what I need to do.

[00:09:43] Jason: So, yeah, I think you put in the work and it's awesome to see that. You know, we can give clients the strategies. And the stuff that we give people to do works, but not everybody does it. A lot of people listening are like, all they're hearing is like, "Kent makes a bunch of phone calls."

[00:09:57] They're like," I don't want to do that." You know, what's different about the strategies that you're doing with DoorGrow versus what you maybe would have tried on your own then. I would have just been kicking tires 

[00:10:07] Kent: if it was just myself. You know, it still would have been idea,

[00:10:10] "hey, I'm going to do this. You know, it's really just, it just gave me that confidence, you know, even jumping on the weekly calls and talking to people kind of sharing the war stories. You know, it's like, oh, you know, I'm not the only one having these struggles, and it's been great to, not that I like hearing people struggle, but it's, you know, it's nice to hear other people are going through the same thing I was, and that goes back to kind of that sense of community that I got from joining DoorGrow.

[00:10:36] Jason: Did you go through the rapid revamp class? I did. Yep. And so what changes did you make to your business going through that pricing, your sales pitch, brand new website, any of these? 

[00:10:48] Kent: All of them. But the one that really stands out is my pitch. You know, that was something that, like I said earlier, I'm not naturally a very confident person.

[00:10:58] I'm a very empathetic he's some love type person, you know, and the idea of being a very salesy person intimidated me. But you kind of alluded to it. It was just a lack of confidence. You know, I know I can do what I need to do. It's just having that confidence and believing and yeah, just really defining my pitch, it was the biggest thing I took from that course. You know, website was an amazing, you know, pricing, all that stuff. But that was the one big thing I took from 

[00:11:24] Jason: it. Yeah. Yeah. I mean, it really is. It's pretty significant that the level of confidence that you go into in sales when you just know that what your pitches and you know why you're doing what you're doing and you know that you can benefit people.

[00:11:39] And and that's what we teach. We teach authentic sales and, you know, seeing you shift from thinking you had to be a salesperson to shifting into having a solid pitch and just knowing that you could help people and being able to go out and do that. It probably made it a lot easier to just even make the phone calls and reach out to the right partners and the right people that could do some business with you.

[00:12:02] Kent: Oh yeah. You know, having that confidence and you know, another big thing that I'm thinking of coming through the year with us talking here is just the the whole concept of momentum. I would call get one person, okay, let me get another person. And just that idea of just, let's keep the ball rolling. Let's do a little bit better the next day. 

[00:12:18] Jason: Yeah, it starts to give you evidence. When it's somebody's doing sales and they start to get evidence, that's when magic happens because then we have our confidence. It becomes real, then we can see that we are getting results. We can see that the needles moving for, you know, in a positive direction and that can be really significant.

[00:12:36] Sarah: So Kent, do you mind kind of talking about like the financial situation that you were in and kind of like your journey through all of that? Because, I think that's something that a lot of people really struggle with is like, business is not easy. And sometimes, you know, we either underestimate or really overestimate, like, what it's going to look like.

[00:12:58] Very rarely, I think, are we accurate in our planning and our methodology? So if you wouldn't mind, like, you know, it's just sharing some of the. You know, the financial piece, like, what did this look like, you know, from the start to like, where you are now.?

[00:13:13] Kent: Yeah. You know, what I've described to people is when I said what I do, you know, I said, "hey, you know, growing a property management company is not impossible. It's a difficult thing to do, but I did it with two, my two arms tied behind my back, you know, because I was struggling just to get out of bed," you know, is where I began. And, you know, it's just. I knew that I could do it. Once again, going back to the confidence and the routine of doing it, but yeah, you know, the, at the end of the day, I enjoy this business for multiple reasons, but from a financial piece, I enjoy the residual income that comes in. I enjoyed the flexibility that this job allows. And yeah, you know, my expectations coming in, you know, I had my spreadsheet on what it would look like and, you know, my goal was 100 doors. I'm going to be at 100 doors and I know Jason, you shared that's a lot of people when they start up their goal and I'll never forget. It was right around Christmas time last year. I'm like, "well, I got to call somebody" and, you know, I started calling people and after my first day, "I said, my goal is 100 doors by the end of the year, 1 year from now." Yeah. Well, I was able to reach that last month September 13th and it was a very good feeling that day, kind of walking on clouds, like, man, did I really just do that? You know, and just looking back yeah, I just had to put in the work. At the end of the day, it was a challenge to call that first person, but I just knew, I told myself, I'm going to have to pound these phones for six months. Is what I told myself and you know, so I'm like, all right, May, June, I should start getting some income man. It was right on the dot. I mean, literally day one of the second half of the year, client number one, client number two, you know, but it's like you got to have that long term vision to get through that kind of rut of a week of without securing anything, you know, you just got to.

[00:15:07] And once again, going back to DoorGrow gave me the confidence. I mean, you know, if I didn't have DoorGrow, I'm sure I would have gave up like, yeah, this is not going anywhere. 

[00:15:15] Jason: Yeah. So, I mean, it's been awesome seeing your growth and where are you at now? Like we know you've got more doors, what, but how does life feel different for you? And what I mean is in the beginning, struggling to get out of bed, like life was difficult, zero doors in the beginning. Give us some contrast, help us understand where, what's life like now for you. 

[00:15:34] Kent: I mean, night and day, you know, I love the quote.

[00:15:37] I don't know who said it, but "if you have more than 3 priorities in your life, you have 0," and right when I heard that, I'm like, man, what are my 3 priorities? Well, my health, because if I don't have my health my longevity, I got nothing, you know, that's the foundation. So, taking time to work out, to exercise, to bike you know, family is the second one.

[00:15:57] You know, my daughter, my parents and then the third is work. And just having that focus has given me great clarity. You know, I don't have time for anything else outside of my three priorities. You know, I, you know, I'm going to, I went to bed last night about eight o'clock. I was dead tired because I busted my butt on my three priorities.

[00:16:17] So, you know, to answer your question, how's it switched? It's just I'm so thankful for what I went through because it's given me extreme focus on what's important to me, what I need to do to survive and to thrive. 

[00:16:28] Jason: Yeah. We had a good conversation about 10x. I remember. What did you take away from that coaching call?

[00:16:36] Kent: Yeah, it's so funny. We talked when you originally and you started with health, you know, "hey, man, make sure you're working out. Make sure you're taking care of yourself. I mean, I took a lot from that, but that was the biggest thing. I wasn't taking care of myself. And I got better over this year, but I made that priority.

[00:16:53] Number 1, you know, I prioritize sleep. I prioritize going to the gym and you know, the other big thing I got from it was I was kind of messing around. Like, I didn't realize how close I actually was, you know, I thought it was gonna take me forever to get where I wanted to be door count wise. And it was like, to the day, like, maybe not even a week when I went from 30 doors to 105 doors, And all that was I, you know, it was easier or what I took from the conversation. It was easier for me to, like, try to be a professional athlete than trying to be like a college athlete. You know, so what I did was I started calling people in my database with more doors. You know, I started stop messing around with the 2 families, and I was going 4 families and up and just there was things just started gushing in.

[00:17:44] Jason: Yeah yeah, we chatted about that. And for those listening, the conversation was something like it's easier to do 10x and 2x, which comes from that the book with the title 10x is easier than 2x by Ben Hardy. Which is he's teaching Dan Sullivan's principles in that book. And but the idea is there's very few things that can get you, that you can do to 10x.

[00:18:06] And when you think about that, and there's a lot of things, infinite things you could do to 2x your business, right to have incremental growth. So. I just, I challenged you. I said, I want you to sit with that question and think, what could I do to 10x? And when we just start exploring that question, we start to change your behaviors.

[00:18:22] And you've found some ways you're like, well, I'll go after people with more doors, people with more doors secretly for those listening, the people with more units and more doors are better clients, they value you more typically, and they are easier to get on, you know, than the one offs in a lot of situations.

[00:18:40] And so, you know, we can choose our ideal customer and go after them. And you started shifting your focus, which is interesting. And then you started seeing a shift in your door count significantly. 

[00:18:52] Kent: And, you know, it's worth repeating what you said there, you know, the higher door count people, the more sophisticated investors are way easier than some of the mom and pops with, like, a 2 family, you know, for every reason you just mentioned right there. 

[00:19:07] Jason: Yeah, they get so emotional about their property. They maybe used to live in it. They're like, "Timmy etched his height in the wall, like, since he was, you know, a little kid and like, we need to maintain it to like, it has to stay the same forever," and they don't want to treat it like a rental property.

[00:19:22] Yeah. So, yeah, well, Kent, you know, we've really appreciated having you as a client. It's been great to see your growth and success. Where do you see yourself in a year from now? 

[00:19:31] Kent: Yeah. So there's kind of two things going on when I'm thinking, you know, I've just seen, you know, my number one priority right now, I'm where I'm at the door number that I wanted to be you know, I want to make sure my highest priority right now is make sure I can deliver to what I told the people I can do so, yes, I have greater ambitions of growing doors, but me servicing what I already have right now is of my number 1 priority and number 2 and I've mentioned this to you, Jason.

[00:20:02] I've mentioned it to a couple other people. You know, me getting up to 1000 doors. Is going to be easier than what I just went through over the past year to get to 100. And, I'm using the last part of this year to kind of button up my processes with the things that I'm servicing right now and going into the next year My goal is going to be to let me double what I did.

[00:20:23] Let me try to get 200 doors, you know And just see where that goes But then I, you know, I say that it's like, wow, screw that. I'm going to go after a thousand doors. Why am I selling myself short? You know? 

[00:20:35] Jason: Yeah. Yeah. I think you're, you know, that's interesting. I think a lot of people listening to this might have less than a hundred doors.

[00:20:42] And if you do reach out to DoorGrow, let's get your business fixed up because having less than a hundred doors is not really a profitable business. Like it's really difficult. To make money when you have like 20 doors or 30 doors, right? 50 doors. And a lot of people get stuck right there as a solopreneur.

[00:20:59] And and they've already made usually a lot of mistakes related to pricing and branding and everything else. So everything feels so uphill. And then a lot of times they're losing more doors sometimes than they're getting on or about the same. So they're just, they have this high churn rate where they're losing clients every year.

[00:21:13] And then getting some clients and they're like, "I'm not growing." That's a painful grind to be in. And that's way harder than if you break the hundred door barrier in a healthy way, which you did and you know how to grow, which you do. And you know how to grow independently of ads. You don't, you're not beholden to some marketer to advertising agencies.

[00:21:33] Like you can just go out there and create business. And it actually takes you less time than it would to follow up on cold, crappy leads that you were buying. And so you're doing things in a smarter way than most property managers do, because most probably are listening to this going, "well, I don't want to make phone calls.

[00:21:48] I'm going to go be stupid and spend a bunch of money on ads and try and do a bunch of advertising instead," because they want to avoid something that's going to actually work well and get them warmer leads that have a higher close rate that they're not competing with the low price property manager, you know, out in the market. 

[00:22:05] Sarah: I think it's the perception of pain. It's all, it's not, you know, people aren't like, "Oh, I want to do this way instead." It's just that it sounds painful where it sounds a lot easier just to be like, "Oh, I'll just pay for ads. I'll pay a marketer. And then like leads will come to me." It sounds easier.

[00:22:23] And it's so deceptive because it's so hard. It's so hard. But it sounds, I think when people hear like, "Oh, well, I have to talk to people and I have to make a bunch of calls and I have to reach out to a bunch of people? I have to do a bunch of work?" Then they go, "Oh, this is like this hard thing." But what they don't realize is that if you, like, if you're spending money on ads and you're advertising, like, and you're getting leads that are coming to you, you still have to make a bunch of calls. You still have to talk to a bunch of people. You still have to do a bunch of work and you're actually doing more work because these people don't know who you are and you're just spending money. Like hopefully this works! I hope it works. So, like, is that something that was like hard for you to get over that hurdle and just like start doing the work. Was that hard for you? 

[00:23:07] Kent: Oh, yeah. I mean, I you know, I procrastinated forever, you know, it's you know, I spent so much time, "I'm gonna do this with you know, trying to find leads and you know," basically I was just prolonging the pain, you know, I'm then finally one day. I'm like just call somebody, you know I think the best example was it was right around Memorial Day. It was that Saturday And I got up, I'm like, all right, "I'm going to call my 50 contacts or my 50 buildings." And man, I was pacing around my computer cause I did not want to do it. You know, I came up with every excuse.

[00:23:44] "Oh, it's a holiday. Nobody wants to talk to me." You know, there were some curse words that I just started saying to myself, like just trying to hype myself up, like, "man, just do it." Finally, I sat down and did and started calling and call number one. So I reached out to 50. Prospects 50 buildings call number 1 was a home run call.

[00:24:03] Number 50 was a home run. Everything in the middle was a dud, but I was just like, I got off. It was so funny to have that 1st 1 and that 50th. I was like, wow, that was a lesson right there. You just don't know what's around the corner. But yeah, Sarah, yeah, definitely procrastinated to finally pick up the phone.

[00:24:21] But once I, you know, talking about that momentum, once I started getting some first base hits, those then turned into double plays, and then they got a couple of home runs out of it, but you just got to start. 

[00:24:32] Sarah: Yeah. Awesome. Thanks for sharing that. 

[00:24:34] Jason: Cool. Well, can any parting words of wisdom for people that are, or were are right now in a similar spot to where you were when you first came to us?

[00:24:44] Or maybe they're dabbling like 20, 30 doors are struggling?

[00:24:48] Kent: Yeah. I mean, it's been, you know, there's been a couple of things in my life that were like moments. I'm like, man, that, that changed my course. And one was joining DoorGrow. Professionally. And, you know, the second Jason's the call that mean you had, you know, maybe a month or two ago when I shared what I went through.

[00:25:05] You know, that was just 2 things that just, you just get tattooed in my brain. And I know I've said this a few times to you even, you know, I'm like, "Oh, I could have got where I am right now, but DoorGrow helped me do it quicker." I'm confident in saying I'm even going to remove that from my vocabulary.

[00:25:21] I would not have been able to get to where I am right now. Yes, I did put in the work, but DoorGrow was great on showing me little tricks of the trade, some different technologies I can implement that just compress that time from a very long time into a very short time. So, yeah, you know, if anybody's on the fence about joining you guys I'm a customer for life.

[00:25:44] That's good stuff. We're ending right now. That's like, that's it. 

[00:25:48] Sarah: That's it. That's all we need to hear. My day is complete. Thank you. And because this is what we do. This is what we do and we like doing it. Like I'm, this like really fulfills me. This is what I'm really passionate about doing is making that change and making that impact.

[00:26:03] Jason: Yeah. Can we be real? So like yesterday was a rough day for us, right? Business can be rough sometimes, like, you know, we get stressed out. We like feel overwhelmed. Things change in the business. Things change with the team. You know, sometimes you get bad news.

[00:26:18] Like business is not easy. It's a new day, you pick yourself up, you get to work, and Kent, it's been awesome seeing you put in the work, get the results, and that's really what we value as coaches, we need clients that are willing to do the work required to get the result, we will just help them with the system, and when we get great people, and they have a system, they're going to win.

[00:26:46] There's no question. Our system's proven. We love when we get to connect with the right people that are ready for a good system. And those of you listening, when you really want success, when you're really committed to success, and you're willing to do the work required, and you just do it, even if you're sucking at it, the system will become clear.

[00:27:06] You will find the system. And that's when greatness starts to come. That's where success starts to come. So put in the work, put in the effort. And then when you're ready, reach out the DoorGrow, we've got the system and then we'll help you get going. So Kent, thanks for coming on the show. Appreciate you.

[00:27:20] Thank you. Yeah. Thanks for your time. We'll talk to you again soon. All right. Sounds good. See you guys. All right. So if you are a property management entrepreneur, that's wanting to add doors and make a difference in everything that we talked about, then, you know, reach out. We would love to support you.

[00:27:37] Just go to doorgrow.Com. Also go to doorgrowclub.Com, join our free group and community. We give away a lot of value. Hopefully that'll get you up to the point where you can afford to work with us. And and when you're ready, we're here to help you take things to the next level. So bye everyone. Until next time to our mutual growth.

[00:27:54] 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! 

[00:28:21] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Jan 5, 2024

When you are creating a team in your property management business, the culture that you create will make or break your business and your ability to grow and scale.

In this episode, property management growth experts Jason and Sarah Hull sit down with property management entrepreneur and DoorGrow client Brian Mullins to talk about hiring, culture, and processes.

You’ll Learn

[05:33] Why culture is important in a business

[12:07] Importance of humility and showing gratitude as a business owner

[19:48] Having processes makes everything easier!

[24:18] Setting goals in your business

Tweetables

“If I could just clone myself, then all my hopes and dreams would come true because I would make that clone of me do all the stuff I don't want to do. Guess what? They wouldn't want to do it either.”

“People that can do everything do not make great team members. They make great business owners.”

“Don't be the property manager, be the property management business owner. Hire the property manager.”

“Whatever we focus on with our team and are grateful for, they get better at that.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: They say pride cometh before the fall. So if you're not humble in business, usually you get your ass handed to you at some point, and then you are forced to be humbled. And so you either humble yourself or you get forced to be humbled. 

[00:00:12] Welcome DoorGrow property managers 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're open to doing things a bit differently, then you are a DoorGrow property manager. DoorGrow 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 Hull, the founder and CEO of DoorGrow, and Sarah Hull, co-owner and COO of DoorGrow. Now let's get into the show. 

[00:01:19] And our guest today is Brian Mullins. Brian, welcome to the show. 

[00:01:24] Brian: Thanks for having me. 

[00:01:25] Jason: Cool. So Brian, give us a little bit of background on you for those listening, how you got into property management, why you decided to do that crazy thing, and yeah, share a little bit about your journey in entrepreneurism.

[00:01:39] Brian: Okay. Well, it goes back a long ways. I I'd always had an interest in real estate. I grew up in high school during the ramp up to the great recession and was fascinated by it, and graduated high school, wasn't sure exactly where I wanted to go. I was leaning towards technology or entrepreneurship, finance business, and started computer science, said, "Oh, hell no, I'm not doing this," and then switched over to finance. And in that time, I was also working for a collection law firm as my college job. So I switched to finance, fell in love with that, and then I got an opportunity to take some electives in finance, and real estate was actually one of the departments under finance.

[00:02:20] And so, like, well, I can get a minor and fulfill my electives in real estate, or in finance. And so I took my first real estate class, and that was the point which I decided that this is where I wanted to be, and this would have been in 07, 08, and I set myself as a goal to go through college, graduate college, work five years for somebody else, and then start essentially a investment brokerage, doing property management acquisitions, the whole nine yards. So I went all the way through school, graduated in 2010, which is a really crappy time to find a job and I said, "I'm not going to go do some of these jobs that are actually available," and I went and got my MBA instead, graduated in 2012, worked 5 years for a regional automotive group, and I was in charge of all their real properties, and so I was doing a lot of commercial real estate at that point, building buildings, and also managing the various assets that they owned. And then after one week, should I have my five year anniversary? I quit, made a little bit of a shift. In hindsight, probably wasn't the best idea. I went more towards retail brokerage, and ran with that, never had a ton of success, survived made a decent chunk of change, but I was never super satisfied with it, recruiting agents is not my jam. 

[00:03:32] And so during COVID, I saw the handwriting on the wall, I knew that the market was going to collapse, you know, you can't live with interest rates as low as they were, and it's a pendulum that's going to swing the other way, and so we made the conscious shift at that point, and I took a few key members of my retail brokerage and said, we're going to go into property management, and this was in early 2021. So, at that point, I had, I owned like 17, 15, 17 doors, something like that myself. I managed a couple others, so we're at about 20 doors. And then we quickly expanded, we got up to our peak was about 150 doors that we got up to, and then that was about the time that we joined DoorGrow and we ended up firing our largest client.

[00:04:14] It was an apartment complex, but it was just an absolute nightmare, and then we've been rolling ever since. And then also during this. I actually had an investor reach out to me and say, we want to grow a real estate portfolio, and so we shifted from when we originally signed on with DoorGrow to really looking for clients to more, we need the process and the culture so we can grow this business because we've got essentially, you know, a big portfolio of properties coming on and we need to be able to scale it. So that's the short story of how I got into it. I've always loved it. All my work history has led up to this. Working collections for 10 years through high school and college is a really good transition into property management because it's the same thing.

[00:04:54] Yeah, it is. You're dealing with the people who don't pay their debts are a lot of mostly tenants, you know, to somebody. And so you have to deal with that type of clientele, and it's that balance. And I really appreciate my lawyer that I work for. He really taught me a lot of like, how do we balance being compassionate, but also being firm because that you can be a jerk, right? Or you can be a, you know, somebody just gets rolled over. It's like, you need to find that in between. So I learned a lot from that and working real estate from five years and then even doing, I learned a lot being on the retail brokerage side.

[00:05:27] Jason: Awesome. Yeah. So it sounds like you have a lot of experience that you really can leverage to benefit your clients. So the topic we are discussing today's how process and culture can make or break your organization. So what what have you learned about process or culture related to this? What conclusions have you been arriving at?

[00:05:47] Brian: So, yeah, so for me, I'm an only child. I was always raised, you know, very independent, and I can do it myself. The problem is I can't grow an organization like that. Yeah. The kind of my first real inclination of this was like when I read the book Good to Great, right? It's, you know, and then that's even on a big scale, but like, how can I be a leader to grow an organization because I can't do it all myself? I could, but I'm never going to be able to scale to where I want to. I'm always going to be capped out and I'm going to have a job and not a business. And so, you know, whenever this investor came on and we were really starting to grow, like we were at 150, we were feeling the growing pains and we noticed this like with the retail brokerage, like keeping people was harder. Like I could recruit, I'm a good salesperson. Whatever I want to do, I can get somebody in the door. But then keeping them long term because people are looking for something different than what I would be. That's one of the biggest lessons I've learned is that not everybody's like me. If I'm an employee, I don't care as much about culture. Even though I do in the background, but like, that's not my main thing. Like I'm very goal oriented enough. I'm going to get my job done, but that's not what the majority of people are looking for. And so we need to be able to set that culture.

[00:06:59] And so that was the first piece that we were noticing, but we didn't really realize it. And so like when we came to DoorGrow and especially when I got this investor, it was processes too, because I, like you said, I have so much experience and all of this, and I've done this for so long. I'm a hell of a property manager. I can manage all day long. I don't like doing it necessarily, but I can't grow, I could probably manage a hundred 150 doors on my own. But then I'm tapped out. And so how do I take what I'm doing and make it a process so I can replicate it? And once I replicate it, you know, even here in this market, how it should be something I can replicate in other markets as well.

[00:07:39] So that's where we've been going and we've been working really hard at getting those processes documented, getting as much automated as possible. So that way we don't have to worry about it. The system just runs on its own and, you know, and we're getting to that point now, and once we fully execute everything and we feel really confident in that, it's just going to be plug and play on grip.

[00:08:01] Jason: Yeah, yeah. I think it's a big mistake that entrepreneurs make early in their journey. And it's super common to assume that people are like them, right? We all start there. A lot of times that's our goal with hiring in the beginning, I call it the clone myth.

[00:08:15] It's this belief, maybe those of you listening right now are thinking this, "if I could just clone myself, then all my hopes and dreams would come true because I would make that clone of me do all the stuff I don't want to do." Guess what? They wouldn't want to do it either.

[00:08:27] And so they go out hunting for a clone. They're like, "I need to find somebody like me because I can do everything. If I just had somebody amazing like me, they could do everything..." and then leave and go start their own business is the reality, right? And so, but everybody thinks this and you can wear every hat in the business.

[00:08:44] Entrepreneurs generally can do that. We're very adaptable. But people that can do everything do not make great team members. They make great business owners and you don't love doing everything right? Like you just said, I don't like being a property manager, which for those listening could mean two different things, right? Your clients would probably not want to hear that, right? But when you say that, you like having a property management business. I like dealing with the owner. In which you're a property manager, but then for some, being the property manager means doing the actual property management work, which is the property manager you hire as a property management business owner.

[00:09:18] Yep. Well, those are two different statements, right? And so we encourage everybody listening, like don't be the property manager, be the property management business owner. Hire the property manager. So you've gone through this journey. You started working with us and defining your culture, getting your culture materials defined, and in the beginning, you're like most entrepreneurs. They're like, "what's this culture stuff? This sounds like fluffy woo woo BS. Like I don't need this. I just, I want results. Get the job done. I pay you. Just do the effing work." So, yeah. So what conclusions have you come to then with your team and with culture?

[00:09:52] How does this shift your team and, or how does this shift who you hire? Like, what have you realized? 

[00:09:56] Brian: So, we've been working really hard on that hiring piece. And so whenever we're looking to hire, like we've got to make sure we hire the right person. And, you know, we've had like some team players that, you know, maybe aren't the best team players.

[00:10:10] And then you try to hire someone that can put up with them. Well, that's not a good option because you end up hiring somebody just like that. And then you've got two people that are like that. And you're like, we can't do this. You know, that doesn't really work in the organization and it's going to completely destroy stuff.

[00:10:23] So, you know, we have to look for people who are willing to be team players. And so there's a book that I read The Ideal Team Player by Patrick Lencioni, and he mentions in the book three virtues. And I think it's a really good summation of what we're looking for when we hire. And those three are humble, hungry, and smart. We'll start at the bottom. So smart is not intelligence. It's emotional intelligence, right? It's can you handle yourself with clients? Can you handle yourself with the coworkers? Do you know how to make a smart response to things? And hunger obviously drive. You know, we don't want people that are just here to get a paycheck and go home because that's not going to succeed.

[00:11:00] We're not an assembly line and this business is a 24/7 business. So I don't need someone at 5 o'clock that they fall off the face of the earth and maybe they're the only ones with an answer that we need to get ahold of. And then humble is the hardest thing to hire for and humble is where I struggle the most because naturally I am not a humble person my wife likes to make fun of me about that. But it's true. I'm not. I've always known that I'm decent at what I do and I walk and talk like it. So those three things is what we're looking for. And so we're very intentional when we're hiring now at looking for these aspects because you're right. When I first started hiring, I wanted to hire people like me, but all that would do is create tension, and they would eventually leave and start their own business and that's not a way to grow the business. I need people that fit in their role, who know their role, but also there's only so many people that can be the entrepreneurs only some people that can be the leader, right, of the organization. That's just the way the world turns. And so, like, we're hiring people on culture. We're also hiring people for the right position that fits their personality. 

[00:12:07] Jason: So let's talk about humility. Let's talk about this. because I think this is a challenge and there's benefits to being humble. There's significant benefits to being humble.

[00:12:16] Humble means that you are teachable. It means that you are able to get new information. They say pride cometh before the fall. So if you're not humble in business, usually you get your ass handed to you at some point, and then you are forced to be humbled. And so you either humble yourself or you get forced to be humbled.

[00:12:34] And so the advantage, and a lot of people think humility is debasing yourself or putting yourself down or saying that you're not great. And I don't think that's what real humility is. That's like false humility maybe. I don't think that's what humility is. I think my definition or how I define humility is that you have the ability to recognize others hand in your own success, whether it's God, whether it's your team, whether it's your mentors, just being able to recognize that other people played a part in your success is the key to humility and it's also what opens the door to you being able to be more successful because if you think it's all you, you always are limiting your ability to have more success. 

[00:13:20] Brian: Yeah. It's the people that are around you and that's why whenever I hire somebody, like if they think they're all that and that no one can touch them, they will never work because they lose their hunger too, right? Because they think it's all them and they lose their smart communication. They think they're all that and that they're always right with how they communicate. And that's not true. Everybody makes mistakes. I make mistakes. Everybody makes mistakes. And you have to be able to admit that humbly. And, you know, one of the things that we've always done, even from day one is I want to make sure the client's taken care of, and that is being willing to admit when we've effed up and take the hit, there have been real estate deals in retail time, there's been, you know, there was a tenant that we placed recently that just went completely downhill real fast and within like a month and we took the hit on that, but that's not my client's fault, right? Should we have done that? I don't know. It's a really good client but you know, we need to make it right to the client and we need to say, "hey, we shouldn't have placed this tenant in here," and I told the client that, and I told him "we'll make sure you're taken care of so and that's what we do. 

[00:14:32] Jason: Being transparent. I think you know, I put a lot of research into this a long time ago because, you know, I grew up in this religious culture in which you were always taught to be humble. But I was like, how do you humble yourself? Like, how do you become humble? And eventually, I had this epiphany if humility is recognizing other's hand in your success, the secret key to unlock humility and all the juicy benefits that everybody talks about that humility gives you true humility is gratitude. And so just learning to be grateful. And the way I think we can facilitate that with our team is to recognize their hand and to be grateful. So one of the things we do in almost all of our team meetings, especially our daily huddle, we do 'caught being awesome' or gratitude and like, 'what are you grateful for?'

[00:15:16] And in our daily planning that we give the clients to do, we're like, what can you appreciate? And there's a double entendre there or meaning right of increasing in value, but also recognizing gratitude. And whatever we focus on with our team and are grateful for, they get better at that.

[00:15:33] Brian: And for me, like it was, it's not my natural instinct to say, "Hey, you did a good job." I have forced myself to be like, "Hey, you've done a good job," and then I make sure my management team below me does the same thing with their people. We're not big enough that I don't see it, right? Like they're pulling around the office and I hear it and I will call the manager out and say, "Hey, you know, you should talk to your people and make sure they know that, you know, that they did a good job."

[00:16:01] Sarah: That's one of the things we do in our team review meetings. Well, I run them. But like, I talk about like, "hey, you know, what's going well. And then are there any challenges?" And then I always just leave space at the end. Like, "do you have just any ideas?" Because maybe every day you do this thing and you're like, "Oh, it would be so much better if we could do it like this," or "it would be easier if we could do it like this."

[00:16:23] Well, tell me that. And then I always want to make sure that I'm bringing out. Like, the opportunity just to be thankful for what they do. And especially because I don't have to do it. So if I didn't have you on my team, it would be me, it'd be me and Jason. So like I'm appreciative, you know, for the team members that we have and for the care that they really show our clients.

[00:16:45] And that to me is big. But our team members consistently, like they just go above and beyond like all of them and they'll be like, "oh no, I already handled this" or, "oh, well, hey, I found this problem, and then I figured this, and then I just took care of it" and we're like, " okay, we weren't even involved in that. Thank you for doing that." And I think that's a really good, like the daily huddles are great. And then that one on one too is also really really important for them to just to hear that because it's always nice to hear "thank you," and especially in an industry like property management, where your tenants are not calling you going, "Hey, Brian, I just wanted to tell you how amazing you are. Thank you so much for being so great. I really appreciate everything you do. I've never had a property manager that really cares like this." They're like, " why wasn't this done? And I'm angry about this and rah!" Right? Like this is what we deal with. And this is what our front end staff deals with. So having something to counterbalance the like ball of hatred that's presented to us every day is huge in this industry.

[00:17:46] Jason: Yeah. I think what's really cool when Sarah's running our meetings, what we'll see because we've led it by example, and Sarah's much better at this. She points out every team member that like, "thank you for doing this" and this sort of thing. The team now do it for each other. So when we have our little stage in our morning huddle that we do, it's, you know, caught being awesome or, you know, anyone do anything praiseworthy? Then, you know, team members now are calling out other team members.

[00:18:17] "Hey, thank you for Adam getting answers to me so quickly. He's always so responsive," things like this. And so the good in that in being grateful, you're magnifying all the good. And so all my team members want to do more. They're getting rewarded. And what I find most team members want more than money. Most team members want recognition more than money once their basic needs are met. And that's weird for us. That's weird for us because we like money, right? We like money probably more than recognition. We're like, "well, let's get paid. You know, cool. I have some accolades. Get me paid, right?" Salespeople may be like that. The rest of your team probably really would just like to be recognized, but everybody likes being recognized.

[00:18:58] So I'll recognize her. She runs our meetings and does an amazing job and I would not be nearly as good at this. And she facilitates this and gets everybody talking. Sometimes I don't even talk like the whole huddle was like, "Hey, everyone," you know, and I'm not as connected to a lot of the team sometimes.

[00:19:16] So I can't even think of things sometimes to call people out for being awesome because I'm probably mostly interacting only with my assistant or sometimes with Sarah. And so, you know, that's it. And so my team members calling each other out creates this sort of culture of gratitude and appreciation, which increases the positivity and the positive results and that work environment, it becomes this almost like a feedback loop, a positive feedback loop. It grows my team members' skill and ability. 

[00:19:48] Brian: And I think with this, like, because yeah you have to have your team and you will retain your team more, but then that also goes ties into the process side of things, because if you do lose a team member, if you have your processes lined out.

[00:20:00] It's not as stressful if somebody were to leave because it's plug and play, right? Like, "okay, this is your job." And we've been working on recording videos of how you do certain things. And they're short. We try not to make them, you know, an hour long videos. And that way it's like, you know, you can go find that little piece that you need instead of having to like watch hour long video, but you find that and then now it's plug and play. And so that way you can easily hire somebody that maybe they're not, they don't have the perfect skill set, but they have the humility, they have the hunger, they have the smarts, they have the right culture for your organization.

[00:20:35] And then the process is there. Where if they have that culture piece, they can be trained pretty easily in the process if it's documented properly. 

[00:20:44] Jason: Very cool. So what's next for you in systems, process, developing your culture? What do you see on the horizon for your team? 

[00:20:52] Brian: So, right now, what we're working on is finalizing everything that we have been working on. I've got an intern who's been incredibly helpful and getting everything set up. And so here in the next month or so, I'm going to have him sit down and go over everything that he's built in the process. And we're going to tweak it. But we've got everything written down on paper, and we've gotten most of it into the computer systems.

[00:21:14] And then we're going to have a team meeting and make sure everything is running like it should. And then from there, we're going to make sure all those videos are up and going. And then we're going to work on expanding the team. So the thing is like with my investor who wants to really push this, like he wants to get in multiple markets.

[00:21:31] And so what we're going to be doing is expanding with him. And so what we're doing is we're going to be looking for acquisitions. So we're hopefully we'll start with an acquisition and somewhere in our market. Because that way it's a little easier. I don't care how huge it is, even if it's 30 to 50 doors.

[00:21:48] That would be stellar because it gives us an opportunity to learn the acquisitions piece. And then the next thing is we're going to go, because we're in Oklahoma City, next thing we're going to go up to Turnpike and start looking for acquisitions in Tulsa. And then we'll essentially set up a separate base in Tulsa.

[00:22:03] But once we have all of our systems here and our cultures here. You know, it's going to be pretty easy to set. It's a 90 minute drive up there. So it's not the end of the world to have to run up there. And then from there, we're going to be going into other markets out of state. And that becomes more of an issue because we have different brokerage laws and I don't sit for my broker's exam or someone who would in another state.

[00:22:23] So that's where we're continuing to grow is to go regional with this. And, you know, and the side that doesn't, isn't directly related to property management is like. We're tasked with bringing on doors. And so these things, the same pieces, the culture and the process follow with any business, it's not just property management.

[00:22:42] And so like me and Mallory, my operator, we are having a meeting this morning. It's like, "okay, we've got this ball rolling. We need to start looking at the next thing, which is how do we increase our acquisitions of properties?" Not of actual real estate acquisitions. And so we're taking these exact same pieces and say, "okay, we need to line out the process," and then we can hire people to do it because the two of us can do it.

[00:23:06] We don't have the time to do it. We need to get the processes lined out so we can put the right person in the seat and make it happen. 

[00:23:12] Jason: Yeah. So we've touched on the three systems that are really needed to make the business infinitely scalable, as I say. So you need really good people. You need a good people system, need a good process system, and then the next big piece is a really good planning system. Sounds like you have a plan and getting that plan built out in DoorGrow OS so that it's no longer just your vision and you have the entire team helping you move this forward will take a lot of weight off your shoulders and allow your operator to make sure that this all happens.

[00:23:44] And then you have a predictable future, which is really amazing. It's like, you can see the future and you can see the future growth of the business and your team helped make it all a reality. 

[00:23:54] Brian: So one of the things that I really took away from the regional automotive group that I worked for the founder of it he passed a few years ago, but I got to know him. He was essentially retired, but I got to know him. And one thing he always did, and this is obviously before computers, because this was in the 70s, or what we have today, he wrote, I think it was three to five goals, and he wrote it on a piece of paper, and those were his goals for the next year.

[00:24:18] And he would accomplish them and it's easier to accomplish what you have set. I had a teacher in junior high and she told me, and it's always stuck with me. You will get further if you set your goals high and don't reach them versus setting your goals low and easily reach them. And so that's the philosophy I've taken with my whole life.

[00:24:40] Like, I'm going to set these goals, and whether I get there or not, you know, I'm sure going to try, but I know I've made it further than if I set my goals really low. 

[00:24:48] Jason: Yeah, it's like the old quote, it's better to aim for the stars and miss than a pile of manure and hit, right? I love this idea for entrepreneurs.

[00:24:58] The challenge though, a lot of times with team members, one of the things we coach on is that can sometimes demoralize the team because they have to be winning. And so I say entrepreneurs set your big hairy ass goal, keep it a private from your team. And then with your team set a goal that there's zero chance they can not hit by the end of the year, zero chance that they don't hit by the end of the quarter.

[00:25:19] And that they're very likely hit by the end of the month. And it's because you want to teach them to be winning constantly. And this gives them you the ability to recognize them. And they actually increase their results because they're winning. And if they learn to lose, teams get very comfortable with losing very quickly, right?

[00:25:38] They don't hit a sales goal that month. "Well, we'll get them next time," you know, and then they just get worse and worse. And so really big, I'm making sure like hit those goals, but back the goals down low enough that you'll hit it for sure by the end of the year and then see as a team, can you hit it sooner?

[00:25:55] Then. Winning bigger. 

[00:25:56] Brian: Yeah, I think that comes to knowing your people too, because there's some people that are going to be more ambitious, right? And so you can maybe knock circles up a little bit more than you would somebody that needs that fulfillment that, "hey, I've accomplished my goal."

[00:26:08] And so that all comes with knowing your people and pushing that down the line as, you know, for me as entrepreneur and owner, pushing that down the line to the rest of my team members and my management team, and they push it down. 

[00:26:20] Jason: Cool. Well, Brian, we appreciate you being in the program. Do you want anyone to reach out to you from this or get in touch with you or..?

[00:26:27] Brian: Yeah we're in Oklahoma City Metro. If you have anybody that is looking to expand their real estate portfolio, feel free to give us a holler. You can find us in 1907investments.com and, or you can find me online. I'm all over the place. And you know, we really take pride and take care of our tenants, treat our tenants as clients, because then you're going to have a more successful business.

[00:26:47] Because if you want your real clients, your owners should succeed. You got to make sure the tenants stay in and are happy. 

[00:26:53] Jason: Awesome. Well, Brian, you're a sharp guy. We appreciate you being in the program. Thanks for coming on the DoorGrow show. 

[00:26:58] Brian: Appreciate y'all. 

[00:26:59] Sarah: Thanks, Brian. 

[00:27:00] Jason: Thanks. See you. All right.

[00:27:01] So if you are a property management business owner, and you are at the place where you are stressed out, you're struggling, you're frustrated, maybe you're thinking like, "what's my business worth?" Keeps coming up in your head because you're like, "maybe I should exit this." You want to get out of it. Maybe in the next two to three years is your plan because you don't really see a light at the end of the tunnel, then reach out to us at DoorGrow. We can help you get out of that, out of a business that you don't enjoy and turn it into the business of your dreams, a business that you do enjoy. Help you get the right systems installed so that it becomes easy, comfortable, and maybe even fun, right? Let's have a little fun.

[00:27:39] And if you would like that, reach out to us at doorgrow, you can check us out at doorgrow.com. Bye everyone.

[00:27:44] 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! 

[00:28:11] 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.

Jan 3, 2024

Owning a property management company can be expensive, risky, and stressful. Property management business owners often surround themselves with the wrong team members.

Today, property management growth experts Jason and Sarah Hull sit down with Pete Neubig with VPM to talk about building effective and efficient property management teams.

You’ll Learn

[01:58] Having a business in “Chaos Mode”

[09:02] The importance of core values

[14:45] How VAs help your business thrive

[23:18] Accountability, KPIs, and training

[30:06] Creating company culture with VAs

[37:07] Getting the right people in the right roles

[41:30] VAs for property management companies

Tweetables

“When you're in high growth, you seem to be in chaos mode, and when you're in chaos mode, you don't make any money.”

“When you're not proactive in your business and you're reactive, you're losing trust and churn goes up.”

“If you don't have your org structure correct, it doesn't matter how many whistles and bells you have.”

“I think every business owner needs to build the business around themselves.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Pete: If you don't have your org structure correct, it doesn't matter how many whistles and bells you have. If your org structure is not correct, It all goes to hell in a handbasket. 

[00:00:09] Jason: All right. Welcome DoorGrow property managers 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're open to doing things a bit differently, then you are a DoorGrow property manager.

[00:00:28] DoorGrow 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.

[00:01:03] I'm your host, property management expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, my wife. Co-owner of DoorGrow and the COO of DoorGrow. Now let's get into the show. 

[00:01:16] So our guest today, we've got Pete Neubig back on the show with VPM Solutions. Welcome Pete. 

[00:01:23] Pete: Welcome Jason, sarah. Thanks for having me. 

[00:01:25] Jason: Yeah, good to have you. So now Pete, you were an operator of a property management company. 

[00:01:31] Pete: That's correct. 

[00:01:32] Jason: With Steve Rosenberg and you really helped to dial in the operations there and build that up. And now you're helping people do this in their property management business with your VA company. So we're going to be chatting about today is the number one way to increase productivity and profitability, so this should be interesting. So Pete, what is the number one way to increase productivity and profitability? Let's get into the subject. 

[00:01:57] Pete: Sure. So before I jump right in, I'll talk about just a little brief history of Empire Industries, which was the company that we owned. So, we came from the investor side, Steve and I, we partnered up, we owned about 31 homes. Bought too many, didn't know how to manage it.

[00:02:12] We love the idea of buying the deal. We hated the idea of managing it. So we went out looking for management firms and then realized we felt we could build a better mousetrap, which we ended up doing. Our original vision, I know you talk a lot about vision in your coaching, our original vision was we were going to own 500 homes and manage them ourselves, and within a year, that vision went to crap and we ended up managing 60 homes and I owned 37 of them. I'm like, "Steve, how are we managing these other homes?" And we were third-party managing all of a sudden. Because he felt that everybody needed help. And so we started third-party managing. So that's how we got into it, and we ended up building a better mousetrap and we created a third-party management firm and we took it from those 31 doors that we had all class D minus stuff, which is a whole other podcast. And I think you've actually listened to one of yours recently about something like that. So we ended up taking it to about 980 single-family homes and nothing more than four units in Texas, single families, one to four units and we went to three markets. We were in Houston, Dallas, and Fort Worth. And what happened was with us, our vision was no longer aligned. Steve wanted to take the property manager firm national. I wanted to literally just stay in Houston and get like 1500 homes. And so that fractured the partnership to the point where we decided to sell the business. Long story short, I couldn't afford to buy him out and he didn't want to buy me out. So we ended up selling to My Management, took a job with them for a couple of years, and realized I was no longer employable and that's when I started VPM Solutions. So that's the short version of it, but we were in chaos mode for many years at Empire.

[00:03:43] When you're in high growth, I don't know if you've seen this with your clients, but we were in high growth and when you're in high growth, you seem to be in chaos mode. And when you're in chaos mode, you don't make any money. We didn't anyway. And so what we had found was our number one challenge was payroll costs. So the number one challenge that I've seen, and I've talked to a lot of people across the country, your number one challenge is either growth or payroll costs. The interesting thing about property management because it's a service-based industry and because it's so service-based that you almost have to stress your team out to make money.

[00:04:16] Right? So you're on this kind of seesaw where I don't really have that many doors, but I need the people. But so the salary cost is so high that there's no money for me. As I grow the doors. Right. Now I don't hire anybody, but now I'm making money, but my team is now completely stressed out. They work in weekends, they work at nights, they're taking phone calls. They don't give the great customer service. And so payroll costs, what we saw was with us, our payroll costs are about 56%. Which is really high. A business should be around 30 to 36% is what I was taught by my business coach. I don't know if you've seen anything different in the service space, but that's what I've heard. So I had to figure out how to get my payroll cost down from 56% all the way down to about 30%. And I'll tell you how I did it with virtual assistants, so I'll let the cat out of the bag, right? We got it down to about 34%. So from 56 to 34%, and every percentage that you save in payroll costs is a dollar in your pocket.

[00:05:11] But then you'd be like, "Well, Pete, if you have less people or, you have less payroll, typically you have less people. And if you have less people, your team is stressed," and I get all that. But let's talk a little bit about what happens when you have a stressed team. Okay. So when you have a stressed team, the little things go out the window, right?

[00:05:27] All of a sudden, you're not making those calls to get those online reviews. All of a sudden, you're not making the calls and your communication goes downhill. And when a landlord owner or an owner client calls you to find out what's going on with the problem, whether it's maintenance, lease, you know, lease renewal, whatever it is, they feel like they're managing you.

[00:05:43] So when you're not proactive in your business and you're reactive, you're losing trust and churn goes up. At Empire, our churn was around 34%, which is insane, right? The average churn in the business, my understanding is like 18 to 20%. Right. 

[00:06:00] Jason: And that's his annual churn. 

[00:06:02] Pete: Yeah. So it's high, right?

[00:06:03] 34%. And I can tell you that the majority of it was people were unhappy with our service. Yeah. Right. So it wasn't good churn, right? Because you have good, neutral, bad, however you want to define it. We had mainly bad churn. People weren't selling houses and like, "all right, we're out of here, we sold." No, they were taking them because they were not getting the love, the communication really from us. So by having these payroll costs so high, I couldn't afford it. I couldn't afford people. So what happened, especially after 2020 with that pandemic is that the cost of hiring people got incredibly high, right?

[00:06:34] So I call them low-level, low enjoyment jobs. Let's take a maintenance coordinator, for example, right? That's the number one job that is posted on VPM solutions today. Is the maintenance coordinator. So that's the first thing people look for typically. Well, a maintenance coordinator in Houston, Texas, back in 2018, 2019, was about a $35,000 a year job. Well, after 2020, people that want to do a job, they want like about $50-55,000, right? And the company just can't absorb that. They can't afford to hire people. On top of that, the type of people that we were getting were GEDs or high school, diplomas, no longer college-educated people wanted that job. Most of those people have challenges in their life and they bring them into your business. So, this all came to a head. I had a lady named Sharon, and Sharon was my front office coordinator. This is back in a day when we had these things called offices and office space.

[00:07:22] Jason: Yeah. 

[00:07:23] Pete: So I remember those days. In 2019 and before so people would walk into our office, drop off, rant or whatever. Right. And Sharon was this, she was like this angry lady. And I'm like this tells you what my hiring process was back then it was not very good. And some of the things that you teach, I'm like, man, I wish I would have known that back in 18, 17 and 19. So she's the wrong person. She was the wrong person and she was the wrong fit. But in my mind, I'm like, "Well, she's mean." I'm like, "She'd be great for a maintenance coordinator, right? She can tell people no all the time." So I decided instead of firing her, I decided to promote her, right. Which was a terrible mistake. So I promote Sharon to maintenance coordinator. Now, unfortunately for Sharon, she was my maintenance coordinator. I was actually managing properties back then at the time. And so just for that, she probably should've got some hazard pay. So I get that. I'm not the easiest guy to work for, especially when I'm managing properties. So Sharon comes and within one week, Now I gave Sharon a raise, so I moved her from front office to the maintenance coordinator. She was making about $35, I gave her like $ 40,000.

[00:08:20] She's making what I think is decent money. That's not great money. I get that, but it was good money at the time. Within one week, she comes to my office. She tells me she needs more money. I'm already just scraping by as the business. Just scraping by, single-digit profit margin. So that's when I realized that I could eliminate her position. I can hire three people that are overseas for the same cost as one Sharon. But here's the big difference. Those three people, they're obviously bilingual, right? And here I'm in Houston and Dallas and Fort Worth at the time, Spanish is like, a lot of our tenants, about a third of them didn't really speak English. A lot of our vendors, Spanish was their first language. So I can get bilingual people, I can get college-educated people, I can get people that are ready or knowing that they want to work from home. And here's the most important thing though. I can get people that were not just a J-O-B to them, but a career and they were excited about the opportunity to work with us and for us. And so the attitude and all of a sudden I can find people that align with our core values. 

[00:09:18] Jason: Yeah. That's significant to be able to find people that align with your core values. Yup. 

[00:09:22] Pete: A hundred percent. But now I have three people doing the work. So now what happened is I had a little hesitation from my property managers, right? Because property managers are designed to be taskers. Right. So I had to take my property managers and I had to lift them up. And we actually changed the name. We said, you're no longer considered a property manager. You're a client relations specialist. Or an asset manager. I like asset manager better, but that was one of the fights I lost with Rosenberg. If anybody knows Steve, he's 6'4 full of muscles. So we arm wrestled and I lost on that one. We call them client relations specialists. 

[00:09:55] Jason: But you wanted to call them what? Asset managers? 

[00:09:58] Pete: Asset managers. I think an asset manager just has a little bit more cachet. And if you really think about it, right? How many clients do you have, like you're listening, that call you up and tell you how to manage their property, even though you're the expert? I felt the property manager, I call them gophers. I felt the property manager, they had to take these calls from these owners all the time and say, "Hey, go to my property, make sure the water in the pool is being filled up. Go to my property. Gas man's going to come there. I want to know about this $12 expense." meaningless and small conversations. You would never have those conversations with the guy managing your money, right? Imagine calling your Smith Barney guy and say, "I don't like the way you made this trade. Like you should make this trade different." no, you just let the guy do his thing. So how do you let us do our thing? Well, words are powerful and property manager to me has lost its luster. And it just reminds me of a gopher. 

[00:10:45] Jason: I think also the phrase property manager in the property management space has become like saying " miscellaneous role" and that like it doesn't have meaning a lot of times there runs into this a lot with coaching our clients.

[00:10:58] Sarah: Like, "what does your property manager do?" And they're like, "they pretty much do everything." "Okay..." 

[00:11:02] Pete: And that's a problem And the reason why they do everything is because they can't afford more people because the margin is so slim. Right, so we got to the point where our property managers got elevated, made them client relations specialists. And what does that mean? It means that they had to learn a new skill. They had to manage by reports. They had to manage people because now all of the low level property management tasks were being done by my team in the virtual assistant world. And when I mean everything, but by the time Empire was done now, granted, we're almost a thousand units. But at that point we can hire some people. Everybody had one hat, which was a beautiful thing because now you can have your job description really set. You can have your KPIs really set. You can have your DISC profile really set. And you know who to hire.

[00:11:43] And they have one or two numbers and they end up doing a much better job than the manager who's doing all of it. So over the course of your growth, you have to change your infrastructure, right? You go from portfolio to hybrid, hybrid to departmental to pod and all that good stuff. I got to departmental, we never got to pod and then we sold. That was probably going to be the next move for us.

[00:12:05] If you don't have your org structure correct, it doesn't matter how many whistles and bells you have. I could have property meld and I can have Zapier and I can have lead simple. I can have all these things. I can have a bunch of VAs, but if your org structure is not correct, It all goes to hell in a handbasket, just even quicker, right?

[00:12:22] Cause now you have all this stuff happening even faster and it just gets crazier. And so with us, what we did is we had the structure, right? So now the managers, they're not taking those first phone calls. what was happening, Jason, is that when people would call, right? An owner client would call, my manager would pick up the phone. And as they're talking to this person, they're literally online and doing 14 tasks, responding to 18 emails. And people can hear that, they can see that and they can feel it over the phone. And so what do they do? Well, you don't really have enough time for me, I'm going to go take my property elsewhere. Or if you mess up, you know what, not only do you not have time for me, you mess up, right? So now what we do is we have everything happening on a low level. 

[00:13:01] My managers told me, and I've talked to other managers since, my managers told me that maintenance took 80% of their time, right? And so I've heard that time and time again. So that was the first thing. So everybody always asks " okay, if I do hire a virtual assistant what's the first thing I should hire?" And the answer is, it depends for me. I knew my churn rate was directly related to the way we handle me.. I knew it. I didn't have to have a consultant come in and tell me that, right?

[00:13:27] I just getting beat up every day by it. So I ended up hiring I was going to hire one remote team member, I ended up hiring four, right? And I trained them, figuring that somebody is going to drop off, but I wanted to train them all together. Now I did the training. Training is like literally the most tedious thing ever. And nobody wants to train. Everybody wants to hire somebody that they know exactly how to do it and they know exactly how to do it your way. It doesn't work that way. You have to take one step back to two steps forward. What people don't realize is the time you spend training your people, you get back in perpetuity forever. Because if you train your people correctly and you have good core values and you have a great culture, they ain't going to leave, right? People are so worried. I'm going to transfer, isn't going to leave. Yeah. If you're running a crappy company. Right. If you're running a crappy company and yeah, I'd be freaking worried too.

[00:14:11] Right. Yeah. Make sure you're running a great company. You train the people. And then here's the great thing. As people moved on, whether they moved on and got another job or they moved on because I promoted them, guess who did the training for the next batch? My team did the training for the next batch. By the way, my churn rate for my remote team was way less than my churn rate in my US team. Right. Right. Incredibly different. 

[00:14:32] Jason: Churn rate of retaining clients, of team members? 

[00:14:36] Pete: Team members. Retaining team members. Churn rate of clients and you have churn rate of team members, right? 

[00:14:39] Jason: Yeah. Their loyalty is just a lot stronger because they don't get these kinds of opportunities as often. 

[00:14:45] Pete: Correct. Correct. So once my maintenance team was on board, now my manager, I literally saved with the narrow minds 80%, but here's the funny thing, right? So as I'm training. I had a director of operations. Her name was Margo and I still talk to Margo today. I love Margo. She would come to my office every day for 90 days. She came to my office with her cup of coffee every morning and said, "I don't think these VAs are going to work. I don't think these virtual assistants are going to work." Okay. Because when I was training right now, I did the training, not Margo.

[00:15:12] I was training them, but when I was training them. What we had to do is every work order had to go to the property manager, then to the virtual assistant, then the virtual assistant would talk to the resident, the owner, bring it back to the property manager because they were getting, they were training, right? So they had to learn what to do in each situation, which caused my property managers more time, right? So that 80 percent went to 90 percent or even a hundred percent or 110. Now they're working extra hours. So they hated it. On day 91 I don't know if I'm allowed to say this, but I shit you not, day 91, she comes into my office and she has our same cup of coffee and I'm getting ready to listen to the spiel and she goes, " do we have maintenance anymore?"

[00:15:47] Yeah. And I laughed and it took 90 days, but I got it. Yeah. The point where, so all of the work orders were being done by the remote team that nothing was getting escalated anymore. Only very little things right? So my managers do say, what do they do? Well, they take on all the escalations. Now imagine. What brain power, right? My team in United States, they were the ones that were the experts, right? So, but imagine if they only are dealing with high level escalations, not all the other little, because how many times did I have all these little things get done, but then we missed the big thing.

[00:16:18] And then all of a sudden what happens is I call them taps, two by fours, and mack trucks, right? A tap is basically a maintenance request. That's going unanswered for, let's call it 15 days. Okay. That's a tap. The two by four is now the resident bypass you calls the owner. Now the owner knows that it hadn't happened or the resident blasts you on social. And then the mack truck is the lawsuit that gets across your desk, the tech, the report the complaint to the the real estate commission. Right. Or you're just getting, or you lose a client, right? Yeah. Those are two of those. So my team was so busy that they were missing the taps that they were becoming two by fours. And these are called fires. All right. And all we're doing is trying to deal with this fire. And then of course, every once in a while you get a mack truck, right? And it's what the heck? So now that my managers are not doing the day to day stuff, they're able to be proactive. So they're looking at reports. They're literally looking for taps. And now they're solving those taps. What that means is now the owner clients not calling you to find out what's going on. You're calling them, you're reaching out to them, you're letting them know, or you're taking care of it before they even, before it even becomes an issue.

[00:17:18] And so by, by having your high dollar people that are licensed and they have experience by allowing them to not do the low level, low enjoyment stuff they actually became not only do they take all the escalation, but they actually became internal salespeople. All of a sudden, and this is stuff that we didn't anticipate, all of a sudden, though, like my company's name was empire property management in realty. That 90 percent of my customers had no idea that we could buy and sell homes for them. We're called realty and no idea. But once I got my property managers to be client relations specialist, guess what's happening. All of a sudden people are going to buy houses and they're buying them through us.

[00:17:54] All of a sudden people want to sell. They want to sell through us. So all of a sudden our revenue goes up, right? Then all of a sudden they're like, who do investors hang out with? They hang out with other investors, right? You're the, you're like the five most, what is it? It's the old saying that you hear you're the average of the five people you hang out the most. All of a sudden they're getting, we're getting referrals. We never got referrals. So now we're getting a bunch of sales. We're getting a bunch of referrals. We're getting people to buy stuff where the agent, right? And when you're the agent, you get, you build that, that relationship.

[00:18:18] And so now all of a sudden our churn rate dips down to, I think it was 22 percent from 34%. Right. So the interesting thing is I told you when I first started, right, I went from 54 percent to 34 percent in payroll costs. My payroll actually stayed the same. It was the churn rate that went down, increased my revenue.

[00:18:36] It was the other clients, right? And retaining people and getting more clients. That's what, that's where the difference was. And now my managers. We're incredibly happy. They're no longer working nights and weekends. They're no longer stressed. Right now. And so now they are they're having the best life ever.

[00:18:53] And my VA team, my remote team, they're making more money than they've ever made before. And it was easy to, and then they all had KPIs and they were all like. People want to inherently do a good job. They do. Right. And so, but they don't know how to do a good job unless you tell them what that looks like. And that's the job description. And they want to report card and that's KPIs. And my team down there, we had them in Mexico cause they're the Spanish speaking. But what happened was again, another thing that we didn't realize was not only the team do the work, they hit the KPIs, they exceeded the KPIs and we create a bonus structure around the KPIs.

[00:19:26] So if you hit the KPI, you got a firm handshake. Thank you. Right. But if you exceeded the KPI, you got a bonus. And if you were part of a team, everybody in team added the KPI or you didn't get the bonus. And what I like about with the virtual team is the bonus was a hundred dollars a month. If you hit a certain level, you got a hundred dollars for us wasn't a lot of money, a hundred dollars to somebody in the US. Like literally would get mad at me. That's a little, that's too little of a bonus. It doesn't even fill up my car. Right. And they throw it at you. Somebody in the Philippines or Mexico or Costa Rica it's an extra couple of days of work per month.

[00:19:58] So they were really appreciative of that, of the opportunity to make more money. What happened was everybody started exceeding their KPIs to the point where I couldn't make the KPI any more difficult. Like it just is what it is. And they were just doing it. And then here's the magic.

[00:20:11] What happened next? was they ended up updating or changing the process. So my deal as the business owner was, I am the policy maker, I make the policy, but you own the process. And when somebody comes in and says, "Hey, I changed the process." And I use this example a lot. I had Jessica who was running all my lease renewals.

[00:20:30] So we had about a thousand units and I have one person doing all lease renewals, inspections and lease renewals. Our policy was that you could not do a lease renewal unless an inspection was done, an annual inspection was complete. And we used to start the process 60 days out. Jessica moved it to 90 days out. And when I was talking to them, I'm like, Jessica, I'm just curious what made you, and I don't, I try not to ask why questions because why questions put people blame, excuse, denial below the line and they get defensive. I asked, what made you decide to move it from 60 to 90 days? And she goes, "well, with 90 days, I can do X and Y. Like I can get to the owners faster. I know if the, if the residents do it" and she laid it all out. I'm like, amazing. She was doing a better job than I could have done because that's what her core focus was. Yeah. She was just on that. So then what people will say to me is Pete.

[00:21:13] Okay. Well, how do you know she's just not doing the lease renewals and not the inspections because she wants to hit our number. Right. That's the first question I get all the time. And I say, "well, we hire people based on our core values. And one of our core values was integrity. And so if you hire people with integrity, they're not going to do the loop around."

[00:21:30] I was able to run reports very quickly that determined all the lease renewals and if they had an inspection done so I've been reporting it. It was very simple to, to make sure that I was, I hold them accountable. Yeah, that's another core value of that we had is we hope people get, we run our business by numbers.

[00:21:48] We hold people accountable. And so that's so, so because we did all of that, we were able to solve our challenge of no profit or single digit profit margin to, double digit and eventually get to about that 20 percent profit margin, even though we, even while we were still investing in a lot of money, growing the business.

[00:22:07] Jason: Yeah, so we've, I love all the stuff you've been talking about. I think we've had some phenomenal results getting clients to improve their profit margin. And we've got clients easily getting up to 40%. Sarah ran her business over 60 and I think the three biggest profit levers are building a really solid process system, a really solid people system, and a really solid planning system and the planning system we call DoorGrow OS.

[00:22:33] But that was really where we started to motivate the team to think in terms of outcomes and get them to think more strategically like business owners. And so that strategic work is what moves businesses forward. That's where they're innovating. That's where they're improving a process and so those kind of goals, if we give a team member an outcome and we say, "figure out however you can best do this, within our values with integrity. Figure out a better way," then I'm not concerned about micromanaging them. I we're less involved in managing the team. They're now managing themselves because they're trying to achieve the outcome. And a lot of team members in a lot of business don't even have job descriptions. So they don't even know what outcomes they're expecting.

[00:23:15] Pete: If you're not sure what they're supposed to do. How do they know what they're supposed to do? 

[00:23:18] Jason: Right. And if you ask anyone listening to this, if you ask your team members. This would be a curious and interesting experience for you or experiment. Ask your team members, "what are the outcomes that you think are most important for your role?" and compare that with what you think they are. I think you might be surprised. These should be agreed upon and defined, right? That should be in the job descriptions. Pete, I really appreciate all your transparency and sharing, because a lot of times everybody wants to, especially with like coaches in the industry, I see a lot of people coaching mentoring, but you don't get to see how the sausage is made and you don't really hear the challenges they have, but they might be really charismatic. They might really be good at speaking, but there's a lot of stuff going on behind the scenes. And then what a lot of coaches in the industry do is they try to get people to build the business the way they did, which may not even be working. And so I think what's important, I think every business owner needs to build the business around themselves. It needs to be built to allow them the maximum level of fulfillment and freedom and contribution and support in their own business and that fifth reason of safety and certainty.

[00:24:25] And that means every business is going to be unique because every business owner is unique. If you started a property management business right now, it would be run very differently than some others, because you're very operationally minded and you would build your team very differently than somebody that's very visionary sales oriented, right?

[00:24:41] And I think it's important to get the right team built around you. And a lot of times I think the foundational challenges, a lot of business owners aren't clear on themselves. And then they start building a team and they're miserable. They have an entire team and they're still miserable. They've built the wrong team.

[00:24:55] Pete: Well, I think every new business owner does that, right? They don't feel like they deserve good people. So they self sabotage sometimes. Right. 

[00:25:04] Jason: They don't believe the good people are out there. A lot of times they just don't even believe there's good people. They're like, "Oh, everybody's terrible." so guess what they attract? Right. And what's surprising the truth is just like you had mentioned, when you find good people, they will exceed you doing that role. Especially if it's one of your minus signs, it's not one of the hats you enjoy wearing, they will be better at it than you, if they enjoy doing it. A hundred percent. And that's super humbling for these early stage entrepreneurs, because they think they're the best at everything initially. 

[00:25:33] Pete: There's two thoughts, right? So when you hire somebody, there's the whole abdication of it. And then there's a delegation and then there's the micromanagement. And so, what I find is that when people hire people in the United States, they abdicate a lot of times when they hire people that are remote, they want to micromanage for whatever reason, even though they've invested a lot more money in the person in the United States. Right. And then there's people that just, they just abdicate regardless.

[00:25:58] And what I mean by abdication is, I'm a property manager. I'm doing a whole bunch of stuff myself. I hire an assistant and I just throw up on them and say, here's all the things that I'm doing. Go ahead and do it. There's no direction. There's no accountability. There's no management.

[00:26:11] Right. And then they get excited. " Oh yeah, I'm a great delegator." No, you're an abdicator. You're not a delegator because you're not giving them the tools and the guidance that's needed. And then what happens is the VA or the person leaves and " well, I don't understand. I can't find any good people, so I'm just going to keep doing it myself." the first thing is when you hire somebody, you have to understand, you just can't just abdicate. You have to make time for them, especially in the first couple of months, right? They're learning you and your culture. At the end of the day, if you are the sole operator and the business owner each one of us have core values, right? We have our personal core values. Most of those are going to be embedded into the company that we built. They should be anyway. You shouldn't change your core values for your company. If I'm full of integrity, I'm not going to create a company that's not, that doesn't have a lot of integrity, right?

[00:26:55] So these people are going to learn by you training them or your team training them, right? Core values always get pushed down. If you're listening to this and you do not have core values in your company, you have core values in your company they're just not yours. The team created core values. They push them up and they may or may not be the ones that you want. Right. But when you hire somebody, it's important that you spend a lot of time with them to train them properly so that they understand what they're doing. What I have found is that most jobs can be trained within two to three weeks. Especially if you're wearing one hat. The more, what I call decision points or if then else's, and the biggest one that I've found is in maintenance coordination has a lot of decision points. What if it's over the threshold? What if it's a home warranty? What if it's an emergency? What if it's cosmetic?

[00:27:39] Right? You go on and on. That's why it took me 90 days. Because we had to go through every one of those scenarios and I had to train on. And it's just a little bit more in depth. My least renewable person, I was able to train her in two to three weeks. And you're right. And so by the training and by creating the KPIs and then by having a weekly meeting with structure.

[00:27:57] Right. So nothing gets me more fired up than having a meeting, just to have a meeting. And then we sit there and we sit there for an hour and I literally just wasted not just my time, but everybody else's time all because we don't have any structure. So I'm a big fan of EOS. I'm sure that you have something that's very similar to a meeting structure.

[00:28:15] Jason: We call it DoorGrow OS. 

[00:28:16] Pete: DoorGrow OS. So DoorGrow OS. So if you're not part of DoorGrow, join DoorGrow and get on the OS. That's like number one, right? Because if you just get your meetings in order, you will see an increase in productivity just like that. So by the way, the maintenance team that I built, they always reported to me, even when I sold, until the day I sold the company. I just had a soft spot for them. I like maintenance. I know I'm weird that way, but I really did. And so they reported to me. My other team, I had other supervisors. I actually had supervisors in Mexico that were managing the other team members in Mexico. And that supervisor report to somebody in the U. S. or to report directly to me. But I still had my weekly meeting with my team every week. And we had our OS and one of the questions I asked every week, there's two questions that were always number one was always. "What can I do as the business owner to make your job easier?" I think there's a, I think there's a sphere, a circle, right? My job is to take care of my team. My team's job is to take care of the client. The client's job is to take care of the business and the business job is to take care of me. That's the circle right? So no the client is not always right. And let's do what we have to do to make sure that if we did mess up, we want to make it right. And I get all that. But how can I make my team's job easier? And that could be, I need to go talk to Sandy in accounting because she's not doing something or it means, "Hey, can you create this report for me?" I need a whatever it is. What can I do? Then the last question I asked on every meeting was what is your stress level on a scale of one to 10? And this was really important because it does two things. Number one, if somebody is a 10 plus for three weeks in a row, they are ready to punch out. Yeah. No one wants to work in a stressful environment for more than if we can see that Hey, it's summer, we're a little short staffed, you're going to be stressed for next, six to eight weeks, but there's a, but we're going to do X, Y, and Z to get out of it, I get it and people will handle stress for a short period of time.

[00:30:05] The second thing is, believe it or not, sometimes people are stressed out and has nothing to do with you or your company. I know we all think it's about us and our company, but personal stuff. So one time I actually. And so if anybody's 10 plus and I want to talk to them, I do it off the meet. Like we have a one on one say, "Hey, stay on everybody else. Get off the meeting, whatever." Yeah. And I had this one lady 10 plus and I said, "Hey you're usually a two what's going on. My brother got hit by a car right now." What this does is everybody's always asking me how how can I, how can I bring my team, my remote team into our culture. This is a great way, right? Because at the end of the day, just like you, you want to give time to your owner clients and you want to build relationships, you want to build relationships with your remote team. And so by, by taking an interest in them as human beings.

[00:30:52] Right. It doesn't mean you have to give them, I'm not going to, I didn't fly down and give them a whole bunch of money. I just listened and I cared that her brother was doing okay. I would ask, and it was just an emotional human thing. My team, if your team, if your remote team know that you actually do care about them. So if your remote team knows that you care about them, they're not going to leave you for a 50 cents more or a dollar more an hour. They're just not. Because most of the time, if you're paying them a fair wage. They are making more than enough money to cover their, what I call their nut, just to cover their living expenses. So they're not going to leave because the grass isn't always greener and they are freaking happy.

[00:31:28] If you make your team happy by asking them, how can I help? How can I make your job easier? And letting them know that you care about them as people. That's the, that's like a number three question I get, right? Number one is how do I train them? Number two is where do I find them?

[00:31:41] Number three is how do I make a part of the team? This is how you make a part of the team, right? By, by advocating and just throwing a bunch of throwing a bunch of stuff on them and letting them go. That's not how you do it. And by micromanaging, I'm saying, I want to see all the screenshots. I want you to write down everything you did from this time to this time.

[00:31:57] And if you take a 15 minute break, I need you to punch out and punch in. Right. You said it earlier. You manage by results. That's what I do. Do I care if you put 40 hours a weekend? I really don't. I'll pay you for 40. But if you get if if you're available and I need you, right. So I have managed on availability first, it had to be available.

[00:32:16] So we have policy. We use Slack. If I Slack you, you Slack me back within 30 minutes. If I email you, you email me back within four hours. If we have a meeting, you're on video and you're in your home office. None of this Starbucks crap, none of this on the beach crap, like you're in your home office, you're working, right?

[00:32:30] So availability is number one. Then number two is KPIs. Are you meeting or exceeding your KPIs? Number three, and if I have the right KPIs, I can just look and if it's green, I know that position is doing well. And then number three is escalations. Am I getting calls from our clients or from internal members of the company saying that you're not, that you can't, that you're not doing your job or you're not getting back to them or whatever.

[00:32:53] Those are the three things I need to know. I don't need to know that you're moving your mouse every 30 seconds. I could care less on that. If I got those three things, I know, and again, I know I have the right people because I hired them based on my core values or the company's core values.

[00:33:06] Jason: Yeah, totally. We do a lot of the similar things at DoorGrow. Like one of my mentors would say, cadence is culture. And I really believe that the cadence of your meetings creates the culture. It really does. And this is where you're able to set the culture with your team. And we ask questions like, where are you stuck? How can we support you? We do caught being awesome. We, and I think what team members really want more than money, a lot of entrepreneurs, we like money, right? We don't hate money. And so we assume mistakenly that's the highest priority for all of our team members. Well, I'll just give them bonuses or I'll pay them more. The reality is most team members. With the exception of maybe entrepreneurs and salespeople, most everybody else on the planet would prefer once their basic needs are met, financially would prefer to be recognized rather than get a bonus. And so creating the right cadence and creating a system like DoorGrow OS allows the team to be seen and recognized for their accomplishments strategically and moving the business forward.

[00:34:03] And that prioritizes that we find that if you can get those three systems in place. The planning system, that's DoorGrow OS here at DoorGrow. The people system, we've got DoorGrow Hiring, Applicant Tracking System, etc. And the process system, we've got DoorGrow Flow and some other stuff. If you have these three systems in place, these are three of the biggest profit levers you can get in place.

[00:34:23] And a lot of times people try to skip those three and jump right into profitability and micromanage through just more severe actions, more severe KPIs, and trying to control more. Thinking they can squeeze more blood from the stone when if they did these three profit levers, we've got clients that are hitting amazing profit margins.

[00:34:42] They don't even have KPIs because they don't even need them because they trust their team members so much and their team members are really great culture fits and really motivated. And so focus on those three profit levers first, and you're going to make a lot more money. And really what happens is you get three times the output from good team members.

[00:34:59] Easily and they can be anywhere. And what's, what I love about being able to have a remote team, we've got team members all over the place. Some of the U S Canada, Mexico, one's in London now, Philippines. I'm able to hire the best. I'm able to hire the best, no matter where they are. And I'm able to also for certain roles, get, make sure it's really affordable for the business.

[00:35:20] And so we're not, I'm not too particular about where they're at or what they're doing. It just needs to be a price point that we can afford. And I need a really good outcome. And if we can get that, then that's the ideal. And it's easier for me to run things remotely than if everybody were interrupting me coming into my office all day long, it's a lot quieter.

[00:35:42] And I feel like everybody's able to get more done, but we're able to create that connection in our daily huddles. We check in with everybody, ask where they're stuck. We do one on ones like you were talking about. All these things to figure out where everybody are at. The one thing that we do that I think is really impactful is we have our team members do time studies, not as a punitive measure, as a way to support them and figure out how to get them additional support and help.

[00:36:05] And this is where we figure out which, what are their plus and minus signs. So Adam, who's been on my team for almost, I think almost a decade now. Yeah. I'm like nine years. And he started as a content writer and he's done multiple time studies and every time he gets really honest with me, he's these are the things I don't enjoy doing anymore.

[00:36:21] I'm not enjoying doing all this writing. I'm, what do you enjoy? I enjoy interacting with the clients. He now manages our entire department for websites, branding, all this. He's got a whole team under him. Whereas nobody initially would have thought, Hey, Adam is a manager, but he by default naturally became one because we just got him the support he needed.

[00:36:40] And so he's been, he, and that's how we've been able to retain Adam. And the cool thing about retaining team members is they're like wine. They get better with time. Better and better. And so Adam knows lots of ins and outs in the business. He's super adaptable and versatile, and we're able to use them for billing related stuff and website stuff.

[00:36:58] And there's so many things over time that he's developed and absorbed and learned. He can run significant pieces of the business for me if necessary. 

[00:37:07] Pete: Well, I'll give you a funny story because, here I am teaching and telling you, oh, here's how hire people. Right? So when I first started VPM Leon, who is our onboarding guy now came over and he was with me at mind and he was with me at empire.

[00:37:20] So I've known Leon and I knew he had our core values, right? And so we're like, maybe eight months in and I go to one of my business partners and I go, "Hey man, I don't think Leon's working out," and he's like, "really?" he did the, I called the Mongolian reversal, right? Because he basically takes my words and he puts them right back at me.

[00:37:34] He goes "let me ask you what's his job description?" And it's crickets. So I'm like, "yeah, he don't really have a job description." He's " what's his KPIs?" I'm like, "yeah, we haven't really got to that." So he's like, "how much have you trained him?" And I'm like, "all right, enough."

[00:37:45] Basically, Leon was the right guy. I just didn't know what he's supposed to do. So how did he know what he's supposed to do? So then I got serious about the job description. And then what we realized is Leon was running about two hats, maybe three hats. It's really like he, he was good at one of them.

[00:38:01] So we ended up hiring another guy, Angelino, and gave that hat away. And now Leon just runs and now he is. Thriving and exceeding all of the metrics that we put in his place. And he's the happiest he's ever been. And even though, this stuff, sometimes you have to continuously, make sure that you're doing it.

[00:38:20] Jason: Oh yeah. We had a conversation last night about a team member that we realized they weren't doing some things right. And Sarah put it back in my face. She's well, did you train them on this? And I was like, No, I didn't. I made a mistake in training. I thought they would understand it in my superficial explanation.

[00:38:38] And yeah, 

[00:38:39] Pete: it's shortcuts, right? Those three things that you put out there, the hiring and the process, it sounds so easy, right? But we know it's tedious. And there's, that's a, that's the reason. Why most entrepreneurs who are most of 'em, are visionaries, right? A lot of guys start business with visionaries.

[00:38:53] They're not in the details. They don't like doing that. It's not natural, right? I need an integrator. They need a, they need an integrator. I'm guessing Sarah's the integrator. I'm the integrator. I'm guessing you're the visionary, right? So they need an integrator to, to literally do that stuff and you get, like I said you, when you do it you get it back in perpetuity, like it just, once the system is complete, it's just tweaking. It's not rebuilding, once, and and but a lot of visionaries, they skip that part because they don't like that part.

[00:39:18] Yeah. I agree. It's from hire a consultant or hire the, hire somebody that, that likes that stuff. 

[00:39:23] Jason: Yeah. 

[00:39:24] Sarah: And I love that you just keep like, thank you for continuously driving home the point. Like you have to train people. You have to. And a lot of times what we see is we see doesn't matter your location.

[00:39:34] Doesn't matter your size. Doesn't even matter what industry you're in. People hire out of pain, which makes sense, but they're in so much pain that they're like, Oh, they think as soon as they hire somebody, they're like, Oh, like I'm, it's solved. It's not solved yet because you haven't trained them. 

[00:39:48] It's still your problem until they are properly trained. And it does take time. So for a period of time, when you hire somebody, your life is going to get worse. You're going to be taking on more if you want them to do a good job That is what has to happen because if you hire somebody and you're like, "here just have it like baptism by fire figure it out go ahead and do it."

[00:40:09] It's not going to work out. You're going to be frustrated They're going to be frustrated and it looks bad for both people and then you guys are both frustrated at each other and you're like Why are they not working out? And this person is like I didn't even get training. I don't like you're mad at me all the time.

[00:40:22] And I just I don't even know what to do, but you didn't tell me what to do. Help me. 

[00:40:25] Pete: I'm not going to hire people because I just, there's no good people out there. Right. It's just, when I was telling you that story about training the maintenance team, I was trained about two hours a day on the maintenance, which is a little too much, probably an hour and a half is probably the maximum we can take.

[00:40:37] But I was doing two hours. That didn't mean that my 10 hour day. was still a 10 hour day. It became a 12 hour day because I still had 10 hours of work. I had to do, I just took on more, two hours of training. And a lot of times they ask more, a lot of times it's even more than that because as you're training, what I have found, and maybe you guys see the same thing is as I'm training, I actually learned a lot more about my processes and about my company, and then I realized, oh.

[00:41:00] There's no policy here. Oh, there's no field for that. Oh, that's just in my head. However, I feel that day I'm going to, I'm going to judge on that. And so I, there was a lot of work that I ended up having to do as I'm creating the, to training, oh man, this process is not exactly at all what I thought.

[00:41:16] Jason: Yeah. Yeah. Cool. Well, Pete, this has been an awesome conversation. We appreciate you coming on the show. Why don't you tell everybody just a little bit about VPM solutions. Do a quick plug and how they can reach out and connect with you. 

[00:41:30] Pete: Yeah. So, thanks for that. So VPM solutions is an online platform that connects property management companies with remote team members.

[00:41:38] It's a direct hire, so they don't work for VPM. They work directly for you. You negotiate the hourly rate. There is no upfront cost and there's no fee to use the site. So it's all free for the company managers. The way VPM makes money is the virtual assistant. Pays 10%. So when they apply to a job, they have a breakdown of this is how much hourly rate that I'm applying for.

[00:41:59] It is how much that BPM charges a platform fee. And this is how much that I'll get. We also have about 20, I think 23 free training. So, there's training on the site from fair housing to marketing, social media, to pro we have a flagship property manager, one on one courses. It's about nine 12, 12 courses, nine hours of content.

[00:42:20] Wow. And it's there just to teach folks the basics of property management. No, you're not going to hire them and they're going to be able to run and be a property manager for you, but they're going to know the ins and outs of the verbiage of just the life cycle, like high level stuff. But it's our attempt to get people trained up so that when you, so that when you get them, they're not like that, at least they're crawling.

[00:42:44] Right. Yeah. They have a little bit of deal, a little bit of information. And then we also have we also have some free resources that are on the side as well. Like we have I think we have 50 job descriptions with this profiles that we assume, assume assumptive this profiles.

[00:43:00] We also have like org charts, like what you should, or chart should be as you grow your business. And then we also have just a list of all the vendors and resources and all the different Facebook groups and all of the conferences that are out there for profit management.

[00:43:13] Matter of fact, you're actually on that site by the way, as a vendor. So, yeah. So. That's what we do. And then we also offer what we call the white glove service. It's a free service that helps you go through the hiring process. Because we, what we realized early on, it's a do it yourself platform, but what we realize is most people don't have a hiring process and no idea what to do.

[00:43:34] So we guide them. Now your team your clients probably have a good hiring process, but we'll offer, like we'll offer that free white glove service to them as well, if they want to come in and just. Need a little bit of help. What should they ask before they interview? There's some red tape.

[00:43:47] Like we say, you get a disc profile, and then the, we have these courses that they take, they get certifications, you can search based on those certifications. So it's really the only platform literally built for property management. 

[00:43:57] Jason: Love it. Yeah. Very cool. We'll check it out. So everybody make sure you check out Pete Neubig's VPM solutions.

[00:44:04] Take a look at that. And Pete, thanks for being on the show today. It's good conversation. 

[00:44:08] Pete: Yeah. Thanks guys. Thanks Jason. Thanks Sarah. Appreciate you. 

[00:44:11] Jason: All right. So if you are a property management entrepreneur, you're wanting to grow or add more doors or you're struggling with dealing with your team, reach out to us at DoorGrow.

[00:44:19] We can help you with this. We do this all the time. We would love to support you. We have clients that are easily going from, we can help you scale anywhere from zero to a thousand plus, and anybody can do this in the next three to five years. We would love to support you, help you scale your business and help you save collapse a lot of time and not have to go through a make.

[00:44:37] So many mistakes in your business. And so until next time to our mutual growth. Bye everyone.

[00:44:42] 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! 

[00:45:09] 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.

Dec 14, 2023

At DoorGrow, we love showing off the awesome entrepreneurial people we get to coach and work with every day.

In today’s episode, property management growth experts Jason and Sarah Hull sit down with DoorGrow clients Jill Lyons and Alex Platt to talk about their journey in property management and with DoorGrow.

You’ll Learn

[03:00] Starting a journey with coaching

[07:26] Finding support as an entrepreneur

[12:18] The path to success is hard work

[16:54] Getting out of the business

[19:28] The importance of good company culture

[21:20] The impact of coaching

Tweetables

“Done is better than perfect.”

“The more valuable you are to your business, the less valuable your business is.”

“If you don't mind working, you don't set up boundaries.”

“Just being open to the thought and the idea is enough to make it work.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: The more valuable you are to your business, the less valuable your business is. Ooh, like that one. 

[00:00:07] Welcome DoorGrow property managers 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 DoorGrow property manager. DoorGrow 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 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.

[00:01:13] Our guests today... we've got Jill and Alex. Jill Lyons. Alex, what's your last name? Platt. Okay. I just know he's always with Jill, Alex. So we're really glad to have you on the show. And the topic of today's episode is like, we want to talk about your journey with DoorGrow because you've been with us for a little bit. So, why don't you introduce yourself and explain like kind of how you got into property management. 

[00:01:39] Jill: Well, I must've taken an insane pill along the way, but I like it. My name is Jill Lyons and I own and I'm broker of Relaxed Realty Group in Sarasota, Florida. Currently we manage about 500 homes. We have like maybe 520 now and our rent roll, we just surpassed 800,000 this month, so I'm stoked and happy and proud. And you know, I love the business. There's never a day that's not that I feel like, "Oh my gosh, it's, you know, Monday." I never feel like that. So it's every day is a joy. Not every instant is a joy, but every day is a joy. 

[00:02:12] Jason: So let's Alex, why don't you introduce yourself and tell us what is your role? 

[00:02:17] Alex: So, my name is Alex and I've worked with Jill here just over a year and a half, or going on almost two years when I got my real estate license. My wife started with Jill, Miranda, and she's been with Jill for what, 10 years now? Started with a business with her and I do the operations here. So operations and BDM. 

[00:02:38] Jason: Awesome. Okay, cool. 

[00:02:41] Jill: So he came from a customer service background with T Mobile for the last 10 years. It's great. Corporate's a great, but there's a lot more opportunity here and oh my God, he's great with people. Of course He's not " to brag about himself. So I'll brag about him. So he will put on multiple hats and do everything that whatever needs to be done. 

[00:03:00] Jason: Cool. Yeah, you guys make a good team. We've enjoyed having you in the program. So why don't we start with what problem problems were you dealing with when you first came to DoorGrow? Like what challenges were going on? 

[00:03:14] Jill: So I would say my strengths are that I love to sell and talk to people and help people. So, you know, that was naturally there and I grew the business with success with growing doors. And I was in a kind of a comfortable, I would say position as. Having a good amount of owners and properties, but I want to start exiting the business and it was just way too 'me centered,' you know, what do we do? What do we do with people coming to me? You know, I don't mind working. Like I say, so unfortunately, if you don't mind working, you don't set up boundaries, you don't set up corporate structures. My flow, there was nothing corporate about me.

[00:03:49] If I wanted to step away, which I did this year, hired the operations manager, but I'm like, now what? And now what do you do? I'm an engineer by education. All I know how to do is build a spreadsheet and show people returns. So I was looking for ...I always believed in coaches. I've been coached since day one of my business.

[00:04:07] So coaching is definitely something I believe in, but the coaching company I used was really just real estate working with buyers and sellers. So I hadn't ever got the property management business aspect of it and setting up the business and the structure. So when you watched one of your podcasts and listened to your podcast, and I liked what you had to say, so I-- "let's let them get us to that next level."

[00:04:32] Jason: Watch the podcast, listen to the podcast, and now you're on the podcast. 

[00:04:36] Jill: I know, I'm like, what do I have to offer? That's the first thing, I'm still listening and learning. 

[00:04:42] Jason: You know, there's a lot of people listening out there that would dream of having 520 doors, having an amazing operator, having the operations running smoothly and being on your journey, stepping out of the business, like this, that's a dream for a lot of property managers.

[00:04:58] They're still in the thick of the mud and wondering if there's a light at the end of the tunnel. 

[00:05:03] Jill: So they don't believe that I'm going to step out. 

[00:05:05] Alex: She's a workaholic. So, you know, it's a little bit of yin and yang. 

[00:05:09] Jason: You know, entrepreneurs, it's a tough thing. I've known a few entrepreneurs that have like exited their business and then they were bored and they started another business. It happens. So entrepreneurs, we want to stay busy and we want to do the things we really enjoy doing. So you just have to find something you maybe enjoy doing more. 

[00:05:29] Jill: I don't know. Yeah, no, I'm not closed to what's next, but I don't know. I'm still here. 

[00:05:35] Jason: So let's chat about, and maybe this is a question for Alex. So Alex what did you see when you first came into the business? Some of the challenges in how to like support Jill and how to get her out of the operational stuff. And what challenges did you see that DoorGrow so far been able to help with? 

[00:05:54] Alex: So luckily with your program we got to revamp everything. I mean, your Rapid Revamp was amazing. I mean, we got to go from rebuilding and rebranding our logo and everything. So I really enjoyed your class, especially with the whole cycle of suck, making sure that you're not holding onto those owners that are sucking up all your time and, you know, using. A lot of your resource when it comes down to it. I would say those were the biggest things and especially your systems that you have. I mean, I think the Flow is going to help a lot for us to map out each and every one of our procedures that we have on an operational standpoint. 

[00:06:33] Jason: Okay. So for those listening, DoorGrow Flow, our process software, which is pretty cool. So the Rapid Revamp, I mean, and you guys made a lot of changes. Yes. Changed your pricing. 

[00:06:43] Alex: We changed our name. 

[00:06:44] Jill: You changed the name. I said I would never, ever do that! 

[00:06:49] Sarah: She's like " I'm not rebranding." I'm like, "okay, we don't have to rebrand." And then she's like, "I think I'm going to rebrand." I was like, "wow! All right, let's do it." 

[00:06:58] Jason: Everybody says they don't want to do it. But what I love about entrepreneurs is that if you show them how to make more money, they're pretty okay with it. They're pretty okay with making more money. So, and I think the training, we do a good job in converting people into wanting to make more money. "Here's how it'll make you more money if you do the right things with your branding." So website. Did we help with that? 

[00:07:23] Alex: We're almost there. We're on the tail end of that portion of it. 

[00:07:26] Jason: So for those that have not been exposed to DoorGrow. Maybe they're just listening to this podcast. They're like, "I don't know if these guys are legit. Kind of looks like some sort of one of these Influencer sort of guys," or I don't know what people think before they become a client but what would you say to those that are on the other side of the paywall and maybe struggling? 

[00:07:51] Jill: For me, honestly, if I would have found this 10 years ago, it would have happened faster, my growth and where I am now would have happened faster and more organized. I kind of wing it and I'm the type that, you know, I don't want to spend any money unless a bunch of sitting in the bank. And I probably, if I would have opened up the bank and gotten the coaching and the programs from a property management company versus just from, you know, where I got my assistance from, which I had when I did buying and selling, which I hate it. So I kind of kept my things rather than going into property management coaching and training. It would have definitely made it faster and less painful, and I would say that's the biggest thing that I wish I would have found you sooner, but you know, you always find people when you're supposed to find them and entrepreneurs tend not to be, in my opinion, people that go to business school because they just want to do it. They jump in head first. There's no rhyme or reason to how we do it. So the organization is usually where we struggle the most. And just networking and having the beginning, I just went to Google and figured everything out on my own, rather than reaching out to an organization like yours, that's more specific for us and NARPM, which, you know connected me to other property managers and how are they doing it? And why did I have to create the wheel and do it all my way? I didn't even know that there was anything like this. 

[00:09:16] Jason: Yeah. And you had been in NARPM for a while before joining DoorGrow. 

[00:09:20] Jill: Yeah. I'm heavily involved in NARPM. I'm the president of our local chapter. So that definitely has made helped my business, and the connection and they have a lot of tools that have helped me significantly realize that it is a business and with systems. But but there isn't the sales support, you know, they don't have you, Jason. It's not energetic and make me go, "yes! I'm going to do it!" With you and with everybody around! You know, it's just like the connections. 

[00:09:48] Jason: Yeah. I know you have both really enjoyed the operational pieces as well, and you've attended quite a few of our scale calls on Friday that Sarah runs. What what things have you taken away from on the operational side of things?

[00:10:04] Jill: So what would you say, because you deal with that more? I kind of say, go do it. 

[00:10:07] Alex: So, I take a lot of the way, honestly, you guys definitely on those calls go over a lot of different systems that are in other people's companies, to be honest. And we try to take piece by piece and just kind of make it our own when it comes to this. I think it's developing more of the systems that we have. As far as like a specific system, I think we talked about maintenance heavily. And the processes over how other companies do it and what we do with our maintenance. So it's kind of getting every pieces of everybody's input on that stuff to kind of lay out what maybe we should change, you know?

[00:10:45] Jill: I will say that as far as operational, we were in pretty good shape with that. It's not technicalogical. So you have DoorGrow flow. I'm just talking with Errol tomorrow. So it's been on my list of things to do this whole year to set up flow and get that going so that it's more clear how we do things because when we have a new employee, I can't just hand them, "these are our thing," we have to manually tell them or give them a checklist, which doesn't really help. So, I have to hire Errol cause it stays on my list every single month and it hasn't been done. That's what I'm going to pass the buck on versus the website. I'd like to do the marketing. So we need to finish all of this by the end of the year. That's on our list. Does it check the list? We're at the last, getting to the last quarter. So you give us the tools. It's just setting it up. That takes a lot of time and concentration time. And Errol seemed to be I met him at DoorGrow live, you know, in Texas. And yeah, he was talking about processes and creating them. Like I talked about property management, so he's going to be our guy. I'll see how it goes. 

[00:11:47] Alex: We have a lot in our heads, obviously. So, that's getting it all down to where if somebody needs to know something, it's much easier. 

[00:11:56] Jason: Yeah we're planning on doing some more stuff with Errol Allen, who Jill's speaking with, and he's currently playing around with our DoorGrow flow software and testing it out as well.

[00:12:05] So I think it's going to be a game changer for the market. So Sarah's had a lot of interaction, I think, with the two of you. What's been your perception of why they do so well as clients? 

[00:12:18] Sarah: Oh, well, so there's a few things that I'd like to kind of. Point out and give you guys like major kudos on. First is, I think you're just open. Sometimes we have people who are very resistant. They're like, " that won't work," and "I'm not going to do it like this," and "I can't do this," and "that's not in my market," right? And I think the difference is just being open to the thought and the idea is enough to make it work because if you go into something and you think, "oh, this won't work," well, you're probably right. Then it's not going to work. But you guys are very open and you also, I love this about you guys, you take action. You just come in and you're like, "this is what we're going to do," and then you take action, you implement and you get it done. I think, to date, they are the fastest people who have completed everything in the Rapid Revamp. Like, they get a medal for that. Like, every time, they're like, "yep, we're done with this," I'm like, "oh, wow, okay!" They just get it done. It's like they just put their heads down. They know what they need to do. They put in the work and they get it done and then they go, "okay, great, we did that. What do we need now? Like what's the next thing that we can do to either like build on top of that or like take us to the next level? And I think you guys are really great at that. And I think you, you work very well together. You know, you balance each other out. You like ping well back and forth, back together, and I think that gives you the ability to move things along so quickly. 

[00:13:44] Alex: It's great to have ideas that we can bounce off of each other and make it a solid process and get it out of the way and move on to the next one. 

[00:13:52] Jill: Well, and I love a checklist. So you have a checklist. I want to see checks on there. I don't want to see them open. So I think that myself, I can be more reactionary property management. Our phone is always ringing. Things are always happening. You know, I can easily not get anything accomplished in a day and be busy the whole day. So with the Rapid Revamp it has me be on track along with handling the things that come on you know all day but I have to get my things done 

[00:14:18] Alex: And the nice thing about your dashboard was the fact that you could assign things, we would take them and split them up and be like, "okay, you're going to do these and they're assigned to you" and then I could assign ones to me so we can you know, handle what we needed to. 

[00:14:30] Jason: Cool.

[00:14:31] Sarah: Yeah. Yeah. I think that was really awesome just to see you guys because every time I check in with you, you're like, "Oh, yeah, we're done with that already." Like, okay, let's see what's the next thing for you guys? And you already knew! You were never like, "Hey, I don't know what I'm supposed to be doing. Like, you just like stayed the course. And sometimes it's hard for entrepreneurs to do because there's so many shiny objects. There's so many of them, right? Like, "Hey, I'm coming in, I'm doing this one thing and that's it," and then along the way, there's like some other little thing that's like, "Hey, I need your attention."

[00:15:04] And it's so tempting to go, "Ooh, but I could focus on that." Like, " let me just go over here for a second," and like, you guys just stayed the course. You like stay on point. And I think that's that's something I really have to give you guys like a huge compliment on because it's hard to do that. It's really difficult to do that. And you guys do it really well. 

[00:15:25] Jill: Thank you. 

[00:15:26] Jason: Yeah. And so you've interacted with several of our team members, right? It's not just the Jason show or the Jason and Sarah show. And I think that's what a lot of people think. Could you just comment a little bit on DoorGrow's team? You don't have to remember everybody's names, but yeah. 

[00:15:43] Jill: Well the two that I've probably enjoyed the most is Clint. He's like the coolest surfer dude in the whole wide world, but he's sharp as a tack. You know, "we're just going to buy a $5 million company." He's the exact person to teach you how to be cool and do acquisitions and whatnot.

[00:16:03] And that you can see why he's so successful because he's a joy to listen to. 

[00:16:07] Jason: Yeah, he's fun. 

[00:16:08] Jill: And ironically considering an acquisition in the middle of all listening to him and he took his time out, sent me a lot of information and questions I should ask and what due diligence I should do. So, I mean, his wealth of all the years that he's done that, enticed in a few documents was, I could have never created that. And then Roya, she's a ball of energy and I'm all into manifesting and all that. So, I mean, not many people you can feel through a computer screen with their energy, you know, that's heard of talent that she has. 

[00:16:43] Jason: Yeah, she's our dangerously powerful mindset coach. And teaches the advanced sales stuff.

[00:16:51] She's yeah she's had quite an impact. Yeah. 

[00:16:54] Jill: Yeah. For sure. 

[00:16:56] I went to DoorGrow live, which was fantastic to connect with everybody. But thanks to DoorGrow and Alex being also trained as a DoorGrow. I'm taking my first three week vacation in 10 years. 

[00:17:08] Jason: That's amazing. That's awesome. Yeah. Yeah. That's awesome. Your business will be in good hands with Alex and and we've got his back. So. For sure. So awesome. Yep. Property managers, if you're listening to this and you have not taken a significant vacation in the last five years, when's your turn? Maybe it's time to reach out and let us help you take- this is one of the most common things that we hear, especially this summer.

[00:17:36] Lots of our clients are taking vacations like for the first time ever, or in the first time in a long time, or it's a longer vacation than they've been able to take. 

[00:17:45] Sarah: Brandon and Mark, they took off the majority of July, both of them, took off the majority of July, and they're like, "things were fine, like things were okay," I'm like, "that's great, that's how it should work," and if we set it up that way, then things can work that way. 

[00:18:01] Jason: For sure. Yeah, one of our mentors had this quote, I don't know where it came from, but he said, the more valuable you are to your business, the less valuable your business is. Ooh, like that one. So Jill's working on making herself less valuable to the business. I've made DoorGrow less of the Jason show, and we've got all these amazing coaches and yeah, and that's the goal, right? We're able to provide more value and it allows us to be more free as entrepreneurs. To do the things that we really enjoy doing and eventually maybe to do nothing. If that's really the goal. I don't know. Jill, will have to find something to do. She's going to trap the world. She'll think we're not going to do nothing. Exactly. We're not going to do nothing. I don't think Jill knows what to do. 

[00:18:43] Jill: We just want freedom to not always to be working. 

[00:18:46] Jason: There you go. Yeah. 

[00:18:48] Sarah: You can choose the things you do. 

[00:18:50] Jill: Yeah. 

[00:18:51] Jason: Well, we've really appreciated having you both in the program. You know, the, Sarah mentioned about you, but what I've noticed is Jill, you have this gift of positivity, it seems to rub off on everyone around you. We've really enjoyed having you in the program. Everyone's like, "Oh, we love Jill." All of our coaches and team members love Jill. And you can see Alex has like got a positive, you know, energy going on as well. And so you've created a really good culture on your team and in your business. And I don't know if it's always been that way, but I know that's something that's important to us at DoorGrow is making sure everybody has good culture with their business and with their team. So can you touch on culture just a little bit?

[00:19:30] Jill: Well, I think connection and culture is the most important thing. If I don't have it here, how is a client going to want to be attracted to us? You know, how is that going to work? You know, if you don't have a positive look on the industry, the business... I mean, this is anybody that calls us is frustrated with property management and say, "here, we love to do property management." They're like, "I need you!"

[00:19:51] you know, tenants and everybody gets to complain to us and we have to listen to them and, you know, do our job, but in these walls of this company, we don't have to do that. We can vent to each other. We can laugh. We don't complain. We more laugh about situations than we do complain. And I think I've been a good leader as far as that goes. But I think that also because I have that energy, I want to attract that energy. And so those people are, who are working here and stay. 

[00:20:18] Jason: I love that. I mean, I think having a culture in which complaining is not the norm. I mean, it's easy to complain in property management. Right? And I'm sure there's a lot of you listening that are like, " I complain all the time. I complain every day," like reducing that complaining in the business and creating a culture where the team don't see that it's totally okay to just complain all the time. Because if you're complaining about your clients, they're going to feel that. They're not going to want to work with somebody that's, they know is just going to be complaining about them behind their back.

[00:20:47] And so I think that's really powerful. And I think that there's a lot of joking in property management, and I think if you can't laugh about it, then you're just going to be hurt by it, and so... 

[00:20:58] Jill: and the only way you make a lot of money is to do the things that nobody wants to do.

[00:21:02] Jason: There you go. And they will pay you a pretty penny to do it.

[00:21:05] Alex: Yeah, we don't have one person that dreads coming to work every day. That's for sure. Everybody's like, "oh shoot. It's monday. Let's go!" 

[00:21:11] Jill: We're a little family. 

[00:21:13] Jason: Awesome. Yeah, I love that. You have a good culture. So, cool well, anything else we should chat about? What are the biggest takeaways you feel like you've gotten from being part of working with DoorGrow for those listening?

[00:21:28] Jill: I think first of all to make sure that I express my purpose to everybody, you know, start with the person. 

[00:21:34] Jason: Has that changed your close rate? Has that changed how clients respond to you? 

[00:21:39] Jill: Oh, just overall being brave enough to start with that, you know, I always assume they don't care, you know they're not calling for my me personally, but they are, you know, and some would get to know me on a personal level over time, but I never started the conversation with that.

[00:21:54] I always started it with "I love property management" and I think they could feel our energy, but not deep down what my life purpose is. So, and how I could tie that back into having them become our client. But it gets a personal, it makes it a personal fit right away or not. 

[00:22:11] Jason: Yeah. They either trust your motives and like them or they don't, but they, at least they know what your motives are. Otherwise they're just going to assume you just want their money. 

[00:22:20] Jill: Yeah. The name change was a huge one. And then the third, I think final one for me is. When you did your stack deck and it wasn't like perfectly animated with all these designs and it looked great. And I'm fine with it. I stopped judging my marketing to have to be the caliber of Coca Cola.

[00:22:40] I don't have designers out there. I don't want to spend design. So just produce it and get it out there and make it look kind of quirky and we're quirky anyway. So I don't know why I was thinking that we had to be this high level, corporate marketing program in order for it to work. 

[00:22:54] Jason: I think done is better than perfect for sure.

[00:22:57] That's one of my 

[00:22:57] Alex: favorite things is like, no, just get it complete and then we'll move on and we'll get the next thing done. 

[00:23:03] Jason: Yeah. Done makes money. And you've made a lot of changes. You've gotten a lot of things done that are going to help shore up leaks that make you a lot more money. And. Yeah. A lot of people get really caught up on things being so perfect.

[00:23:14] They don't get as nearly as much done. So kudos to both of you for implementing and taking action. So, well, we appreciate you coming and hanging out with us here on the show. What do you feel like, what are some tangible results besides the brand? Revenue doors, any other shifts that you've seen in the business since joining?

[00:23:33] Jill: Well, we've gotten rid of a lot of the properties. I had the guts to say to a couple owners, you know, "You have to either sell this property or find another manager because it's too much of a liability. And I'm scared to because X Y Z and so should you." And obviously it's a great time to sell last year. So this is the time get to get a better asset, 1031 exchange it, or let's you know, we need to drop it by the end of the year. I didn't, you know, say we're going to drop you on 30 days, but they, most of them, most of those as a consulting, they trust us and know us and they sold those properties. We have two that are closing this week, our last two that are closing and we had problems. Yeah, problems. So we've gotten rid of a lot of problems since the beginning and liability issues, you know, you know, liabilities. So that's that's, I think our biggest deal and it's allowed other doors to come in.

[00:24:28] It's amazing what you let go just energetically things will fill its place. So door wise, I would say we're at about the same, but revenue has gone up 20%. 

[00:24:38] Alex: We've been getting higher-end properties instead of, you know, things that were D class properties that we didn't want. 

[00:24:44] Jason: Love it. 20 percent more revenue. Awesome, that does not suck. 

[00:24:48] Sarah: And getting rid of the problem, right? 

[00:24:55] Jason: Well, we appreciate you being clients and we're super excited to see your progression through the DoorGrow code, and this business I think that could easily be at a thousand doors in the next two to three years. It's totally doable, especially if you start doing some of the acquisition deals, like it's going to be really interesting once you get some of these systems in place, then you're ready to just scale like crazy. So excited to see what you do. All right. Well then we'll go ahead and wrap up. Appreciate you being on the show.

[00:25:25] Thanks for hanging out with us, Alex and Jill. Thank you. Great. 

[00:25:29] For those listening, if you want to be like Alex and Jill and make good decisions and grow your business in a healthy way, and maybe increase your revenue 20%. aNd clean up your portfolio and optimize your sales pipeline so you make more money, more easily reach out to DoorGrow.

[00:25:45] We would love to take a look at your business and see if we can help you. The answer is: we can... most likely and see if you'd be a good fit for our program. You can check us out at doorgrow. com. There's a big pink button on the home page says "I want to grow." click that. Do the three steps there to see if you'd be a good candidate to work with us, and until next time to our mutual growth. Bye everyone 

[00:26:08] 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! 

[00:26:35] 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.

Oct 13, 2023

Michael Sullivan is a property management entrepreneur who has grown his business to 275 doors.

Join property management growth experts Jason and Sarah Hull as they chat with former DoorGrow client Michael Sullivan to learn about his experience starting and growing a property management business.

You’ll Learn

[01:44] Getting started in the property management industry

[07:49] Growing a property management business

[24:01] Having support and feeling fulfilled in the business

[28:13] Growing and scaling to the next level

Tweetables

“To go faster, you need to invest the currency of cash if you want to get more of the other currencies and to get the business to the next level.”

“If you're not making mistakes, you're not learning.”

“A lot of us business owners, we have a bit of ego.”

“Being an entrepreneur can be one can be very lonely, and it is really important to have people in the same industry kind of in your village.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: To go faster, you need to invest the currency of cash. If you want to get more of the other currencies and to get the business to the next level. Welcome DoorGrow hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management, growth expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, the co owner and CEO of DoorGrow.

[00:01:09] Now let's get into the show and our guest today is Michael L Sullivan. Michael Sullivan is here hanging out with us. He is a client of ours and of Sullivan property management. Did I say that right? MLS ullivan property management. All right, your initials. Got it. And Michael, welcome to the show. 

[00:01:33] Michael: Thank you. Thank you very much. Good to be here. 

[00:01:36] Jason: We're glad to have you. So we've really enjoyed having you in our program and it's been really amazing seeing your progress. So maybe to kick things off, let's start with talking about how you got into this crazy industry of property management. Like you woke up when you were like maybe five years old and said "property management is the thing for me" maybe.

[00:01:57] Michael: Yeah, like every little boy and girl, dreams about being a real estate agent or a property manager. 

[00:02:03] Jason: It's right there next to veterinarian and firefighter.

[00:02:06] Michael: I think that's right. That's right or professional baseball player so, I left the teaching profession in 1993 and became a real estate agent, a general brokerage real estate agent here in the Greater Research Triangle region of North Carolina, and I did very well. I, on average, sold anywhere between 5 and 15 million dollars worth of real estate when our average sale price was $150,000. Yeah, we were shifting a lot of shacks, and it was a good life. And for the 15 or so years between 1993 and the Great Recession of 2007, 2008, my biggest fear was, "what is going to happen when the market flips?" Because inevitably, real estate flips. It goes from a boom market to a bust market, a buyer's market to a seller market. And so during those years, I socked away cash. When the market crashed in 2008, I had an inventory of 40 general brokerage homes that were for sale. I had clients that were still moving to Massachusetts or Plano, Texas, or Austin, or Seattle, you know, to the other tech hubs in the United States and my clients were like, "All right, problem solver, what are you going to do because we still have to move?" And I was like, "we're going to rent them." And so with an Excel spreadsheet and time, because I had lots of time then I started managing property and in the first year, our goal was 30 homes and we had 50 and it was me and one part time assistant and an Excel spreadsheet. Well, after about 18 months, that didn't work anymore. So I went out and I found what I thought was a reasonable property management software. And then over the course of the next decade or so, we got up to 110 properties or so and things were good, you know, we were chugging along and profits were good, but I really didn't know what I didn't know, I kind of.

[00:04:22] Believe that once you had an Appfolio or a Buildium on board that you had won the day and that your business was set and you know, it should be easy. And I soon discovered when I got to 115 doors and just kind of got stuck there that the business wasn't growing the way it should be. And I couldn't figure out why. I was on Facebook one day. And there was this guy, Jason Hull, talking about this company called DoorGrow. And so I did the click, click, clickety click. And then I started listening to some of his podcasts and I started researching DoorGrow and I thought, " huh, this guy knows a whole lot about this industry and maybe this is someone I need to engage with." and so that's how I came to DoorGrow about two and a half years ago, I think. 

[00:05:21] Jason: And now you're on one, you're on one of the podcasts. 

[00:05:24] Michael: I know. 

[00:05:25] Jason: So what challenges did you start to realize you were dealing with at the time? Because generally, you've made a ton of changes in your business since working with us, and you know, it's been impressive to watch. What do you feel like were your challenges at that time? Like, what did you not know that you did not know? So 

[00:05:43] Michael: I knew that there were currencies in a business, but I didn't know that there were five of them. And I knew that I was working really hard. So the currency of effort was there. Yeah, my bank account showed me that the currency of cash was there. Yeah, the currency of focus was really lacking because I was still doing a lot of general brokerage and still trying to do property management. The focus of energy was lacking. Because it was draining me kind of going in these different directions. And then there was a lack of time. I didn't have time to take off. I didn't have time to turn it off because it was me and an assistant property manager at that time, I was still doing all of the day to day operations and the round pegs in the round holes work. And figuring out those currencies and how to better divide them and focus on them was one of the things that I didn't know and that once I could put a name to it and once I could focus on fixing where there was a deficiency, then I kind of won the battle. I felt, you know, before you launched all of your different systems to help property managers, I listened to you and I went out and got Lead Simple. I went out and got Property Meld and kind of brought them into the fold. And I recognize that those tools, which you paid dearly for using these outside vendors, really bring you a wealth of time that didn't exist before. So I was able to capture that currency and by extension, the currency of effort was able to kind of tamp down because I had systems now in place to deal with the endless maintenance requests that having a practice that. Goes up over a hundred percent in growth is going to require. 

[00:07:48] Jason: So let's talk about that growth. You had mentioned you'd gotten up to maybe, where were you when you started with DoorGrow? 

[00:07:56] 118.

[00:07:58] 118. Okay. 

[00:07:59] And where are you at right now? 

[00:08:01] Michael: 275. 

[00:08:03] Jason: I mean, it sounds like you had pretty decent profit margin before. Well, what was that? If you don't mind sharing, what is it?

[00:08:09] Michael: So, on a gross per door basis, when I joined DoorGrow, we were right at about $122 a door per month. Yeah. And today we're up. $153 and 82 cents per door per month. 

[00:08:26] Jason: That's very specific. So, you know, your numbers, which is good. 

[00:08:30] Michael: Well I try. Yeah. And year over year revenue increases from last year is up 58.7%. 

[00:08:36] Jason: Wow. That's awesome. So money's up. So the cash currency has improved the focus currency. Have you been able to do less in the business and narrow your focus? 

[00:08:48] Michael: Yes. So Saturday is my benchmark. I call it my Zen day. And if Saturday can be a Zen day for me, where I don't feel like I have tasks that I have to accomplish, that I can do the things that I want to do, still working on the business, not in the business, then I feel like the week has been a win. If I feel like there are pressing tasks that I have to work on within the business on Saturday, then I feel like the week has not been a win. So if Saturday is Zen, if I come into it feeling very kind of centered and relaxed, then I feel like things are in balance the way they should be.

[00:09:34] Jason: So what percent profit margin are you operating at now? 

[00:09:37] Michael: So coming into this year 2022, we were at 27 percent profit margin, but a lot of that was really underpinned by very robust general brokerage sales. I made a concerted effort this year to pour gasoline on the fire to really grow the business. The goal is to be over 300 doors by the end of the year. So we're 25 away. Nice. I'm pretty sure we're going to make that, you know, that goal. But our profit margin right now is at. 11 and a half, 11 and three quarters percent. So it's down substantially, but that was deliberate. 

[00:10:14] Jason: Got it. And is deliberate because 

[00:10:18] Michael: why?

[00:10:18] Because we're making an investment in people. We're making an investment in systems and we're making an investment in things like vehicles and computers and marketing. 

[00:10:30] Jason: Yeah. So I think that's an important thing for business owners to recognize that. To go faster, you need to invest the currency of cash if you want to get more of the other currencies and to get the business to the next level. And you can grow faster if you have thinner margins, which can feel a little more dangerous. And you know, if you're investing into the growth of the business and into the future, but you know how to add doors, so this isn't a concern for you.

[00:10:57] Michael: It isn't. My bookkeeper and my accountant were a little apoplectic until I told them like, this is where we're going. And what I said to my bookkeeper was before the great depression of 1929, Ford motor company was the preeminent motor car company in the world. They had an amazing market share. Then the stock market crashed and the economy tanked and Ford circled the wagons, folded their tents and got very conservative. They scaled back. General Motors, by extension, said, "ah," and they saw it as an opportunity and they poured gasoline on the fire. And for the next 70 years, General Motors was the dominant car company in the world. And so I kind of am using that model. 

[00:11:47] Jason: Yeah. So, now a lot of people listening to this might think, well, cool, I can get Property Meld, I can do something, you know, get something like Lead Simple, or we have a better tool now, which is DoorGrow Flow. " I can go and get tools and maybe I can do it on my own." Because I think this is the challenge. A lot of us business owners, we have a bit of ego. " I've made a lot of mistakes in the past and we think I can do it myself. Maybe if I watch enough YouTube videos, listen to enough podcast episodes, I can figure it all out on my own. I don't need DoorGrow or I don't need it." Like, so what would you say to people that listening to this or thinking that? 

[00:12:22] Michael: So I would say to them, when I think back to me and one assistant and 115, 110 doors and good profit margins. You know, and a good life. I was in a really kind of felt very isolated and very alone I didn't have other friends or colleagues in the property management space that I could talk to. I felt like I was the only person in the world that was doing this, and once I joined DoorGrow and made very valuable, long lasting friends within the organization that I can call on off hours to discuss specific problems related to property management, that burden of feeling on my own and alone disappeared. Being an entrepreneur can be one can be very lonely, and it is really important to have people in the same industry kind of in your village. And that's why that's 1 of the benefits of joining DoorGrow is that I can call friends in Texas, Idaho, Pennsylvania, California and say, "hey, I've got this going on. What do you think?" 

[00:13:40] Jason: Yeah, and I think you know, that's a testament to you is that you've been such a contributor that in the mastermind that it's allowed you to connect with all of these people, you know, there are some people that join the program and they still stay somewhat isolated. They're like, "I'm going to watch videos I'm going to learn stuff and do my own thing and they maybe don't get some of those advantages or benefits But I think that's key.

[00:14:02] So yeah Yes. I mean, Sarah, when she had her property management business, I imagine you experienced some of the same sort of things of thinking it's. You know, this is, you're the only one in the world doing this. You're on your own. 

[00:14:17] Sarah: Yeah, very much. And especially in the area that I was in I was always different and I just kind of do things differently and I think differently and oftentimes people are like, she's nuts, like, why would you do that?

[00:14:29] Even my mom, sometimes she's like, are you sure you're going to do that? Like, are you sure? Like, I'm kind of nervous. But I've just always done things a little differently. And it's so, it is really lonely. And I think the mindset that I had back when I was in Pennsylvania versus, you know, the mindset I have now really has a lot to do with who you surround yourself with and that can.

[00:14:53] I think it can just give you hope and it can show you like, Hey, like, I'm not so crazy. Like I've got it. Like I've got it figured out and I'm like doing the right thing and I'm on the right path. And you know, it feels right, but sometimes it's just, you know, you're like, Oh, is this really right?

[00:15:07] Because it feels good to me, but man, everybody else is doing something so different. 

[00:15:12] Michael: Yeah. And that's another benefit that DoorGrow has given me is. I now have the ability to say no. So I am the business development manager. I have someone in charge of maintenance. I have someone in charge of tenant experience.

[00:15:28] I have someone in charge of ops within the office. They color within their lines and we are good. My job is to go out and build the business to work on the business, not work in the business. And until I joined DoorGrow, it didn't matter what came my way. Property wise, I was going to take it last week. I turned away more properties than we took on because they weren't the right fit.

[00:15:53] And I have a very nice conversation with prospective clients about qualification and that they're qualifying us to make sure we're a good fit for them. But at the same time. I'm qualifying them, their mindset, their properties, their attitudes toward spending money, their attitudes toward maintaining their properties, and if those things don't align with what we believe here, that housing is a human right that people have the right to live in nice homes that are maintained and maintained properly, then We're not going to accept the business.

[00:16:30] We're also not going to accept people that are rude, mean and abusive. Because I've learned since kind of letting the stress of being a general brokerage real estate agent. Slip away that there is plenty of good business out there and that it's more important to have the Philosophical fits with the business than it is to take just any property no matter what the cost 

[00:16:57] Jason: Yeah, your ability to say no in business Gives you a business that you feel you can easily say yes to each 

[00:17:03] Michael: day.

[00:17:04] That's right. 

[00:17:05] Jason: Yeah. Yeah. It's nice to not have to wake up and go, man, I really don't want to do this today. And that's because we're setting boundaries for ourselves and that boundary in those containers allow us to create a business that we really like to be inside. 

[00:17:20] Michael: Right. That's correct. Yeah. Now, 

[00:17:22] Jason: when you came.

[00:17:23] To us DoorGrow initially. I remember like you really had this mindset that you, and now you're doing business development, you had mentioned, you really believed you were the operator. It all was on your shoulders to operate the business, do operations, and you were good at it, but you believe that was your primary gift, I think, to the business and what your contribution needed to be.

[00:17:45] And and I know you had some conversations with Sarah and some shifts in that, so could you touch on that a bit? 

[00:17:51] Michael: Yeah well, control freak and always have been a control freak. I know one of those. You know, own it. And to a certain degree, I still, I observe. I trust and verify, but I don't get involved.

[00:18:07] My number two said it best the other day. He said, yeah, with you. I only have to come to you if I know it's a problem that I can't solve. So I have kind of empowered the people who work with me to color in their lines. And when they are in trouble, come here and ask and we'll figure it out. I have also given them permission to make mistakes because if you're not making mistakes, you're not learning. You're static, and I let them see that I make mistakes and that I admit when I make a mistakes above all else. I expect complete honesty here. We make mistakes. We admit our mistakes. You know, if we have to eat it because it's a financial error that we've made well, then by golly, we're going to eat it because it was our mistake. And we come by it honestly the empowerment of becoming a business development manager is I don't have to worry that the books are balanced every week because I know that there is someone who I've paid good money to who has balanced the books and they can't hide because the system has been created where I can see that it's been uploaded into the accounting software and that the books are in balance.

[00:19:25] I can verify that the financial piece of the puzzle in the business is running properly because I get a report monthly from my accountant and my bookkeeper that says, "this is where we are. This is your cash flow. This is your profit. This is where you're spending a lot of money. Are you okay with that?" and I pay them good money to do those things. I have a maintenance coordinator who deals with maintenance and on the Property Meld dashboard, which I log into every morning. I can see the tasks picking off or I can see things progressing and I can see that we're handling our maintenance requests in 3 to 4 days on average and that's fine. I've also told him to maintain his sanity because he's a bit of a control freak. If it's after hours and it's a garbage disposal in a dishwasher and it's after 5 o'clock, you don't need to deal with that today. If it's a leak and we have a catastrophe, then you deal with that after five o'clock, but the small stuff can wait until tomorrow.

[00:20:26] It's still important. It's important to get it done and move it off our plates, but you don't have to deal with it when you need to be spending time with your children at soccer camp or baseball practice or whatever he does in the evening with his four kids. And then my other teammates, I can see that they are moving their tasks forward and that I don't have to worry about the job that they're doing. And that's empowered me to go out and find the right properties to bring into the practice for us to manage. 

[00:20:56] Jason: You know, one of the gifts that I see in you, which I think really sets you apart, Michael, is coming into the program you're really intelligent. You know this. You're an intelligent guy. I think everybody can pick that up just by hearing you and listening to you. But even though you're intelligent, you have humility about, you know, and this openness to learning. And you've come into the program and you just started to do stuff. Like you tried it out. You experimented, and you allowed yourself the time to prove whether or not it would work or not. And some of the times we get clients that are intelligent, but they're not humble and they're usually the biggest stumbling block to themselves. So I just wanted to point that out. I'm curious what Sarah's experience has been of you as well, because she worked closely with you on like reviewing some of the systems, reviewing your team assessing you and some of this kind of stuff.

[00:21:54] Sarah: So, yeah, I think I definitely agree with what you just said about being open to learning and trying things just a bit differently. And I think a lot of entrepreneurs, we do things differently. We're okay with that. But sometimes if it's not our idea, then we're like "I don't know if I want to do it because I didn't think of it." right. So, I think Michael is, he's open to thinking differently. He's open to trying things out and implementing a system. He'll do the research. He doesn't just, you know, blindly jump and he's like, well, Jason said to do this, so I'm going to do it, but he'll do the research and he's very thorough. And I really appreciate that about Michael. He's all into the details and he knows exactly what's going on in his business. He's not like, "Hey, I'm just going to kind of sit back and like, let the team run everything, and then I just, I'm going to cross my fingers and hope and pray that everything is going well, right?" like we know that it's going well because you're not the one who's doing it, so you've been able to get out of the hot seat in a lot of different ways and get yourself more into the things that you actually enjoy. because I remember that conversation with you about the operations and you said, "well, I really just, I love to sell" like, okay, then let's let you sell. Like if you're doing things in the business and you're just holding on to them going, "well, I have to be the one to do this." I think it's really common for us to think that like, " well, I own the business, so I have to do this piece or I own this. And it has to be me. It doesn't always have to be you." do you have to know what's going on? Absolutely. Do you have to have the right people on your team? Absolutely. And do you have to set it up so that things can run smoothly? Absolutely. But do you have to be the one who's actually like doing the work? Right. And I think that's one of the biggest shifts that I've seen in you is that you're able to say, okay I don't have to do this part and I don't want to do this part.

[00:23:54] This is where I want to be. So I'm going to move closer to this and I'm going to figure out how to get these pieces kind of offloaded. 

[00:24:01] Michael: Yeah. Yeah. When you taught me how to write R docs and after I had a disastrous hire two years ago, disaster, and I had to fire someone, something I'd never had to do, but it was my fault. There was nothing wrong with the person I hired. She was just the wrong fit for the job. And then we sat down, we wrote R docs. With detailed job descriptions and parameters and that made bringing on the next person who is now in that role a dream because she fit the culture. We knew what her profile was before she even interviewed with us. We knew who the person was and then she walked through the door and poof, there she was. And that's one thing I didn't know. I just thought you could teach someone into a position. Well, you can teach skills, but you can't teach the human touch. And that's what I had missed with the disaster, the mistake that I made. 

[00:25:02] Jason: Yeah. You'd learn some concepts from us, like the three fits , mapping out R docs. One of you explain what R docs are for those of us. This is DoorGrow speak here. 

[00:25:11] Sarah: I know it is. So an R doc, it's just basically a fancy word for job description. We call it R doc because every section on it starts with 'R.'

[00:25:20] Jason: There you go. So the ultimate job descriptions. Awesome. So, yeah, so all of these little pieces and systems and mindsets that you've installed in your business have really, I think, primed your business for a lot of growth. Like, where do you see the business going in the future? 

[00:25:37] Michael: Oh, so that's another thing I learned. And it was at, I think, Austin at the Austin meeting. And it was you said it in the first like two minutes and I got my nugget and I was like, okay, I can go home. I got it. You said, don't limit your growth. And I had constantly said 200 doors, 200 doors. That's where I'm going. That's where I'm going. And you already passed that now. Yeah, you said that. And I was like. " Why would I create like this false ceiling that I'm going to just bump into and stop at?" Yeah. So, ultimately, and I'd like to retire in the next 10 to 12, 15 years, maybe. We're realistically thinking in the neighborhood of 1,000-2,000 doors. Yeah, people have started to come a calling about, "Hey, do you want to sell your business?" And the time is not right. Some of the financial offers that have been made already are very intriguing. Yeah. But then I'm like, " what will I do with myself?" You know, "what's the next iteration?" And I think until I figure that out, we're going to just stay the course.

[00:26:47] Jason: Yeah, I think that's one of the key things that I think a lot of people realize in the program that if it was just about money, then maybe you'd cash out, but it's not just about money, right? There's other things we want out of our experience here on this planet. And that's something else you got a lot of clarity on is what really personally drives you, which allowed you to build the business and the team around you so that you really could move into those plus signs and out of those minus signs.

[00:27:13] Michael: Yeah, so the key is I went to the Netherlands in May to see art because it's my thing. Cool. And a little ostentatious to fly to Europe to see Vermeer, but I did it. And I was gone for a good long time and things here chugged right along and it was beautiful. And I knew then that we were doing things right, that I could leave and not be here for 10 days, and the business continued to operate. I continued to watch and check in. But they didn't need me. 

[00:27:49] Jason: And how's that different from before you came to DoorGrow? 

[00:27:53] Michael: Oh my God. Like the first meeting in Austin that I came to, I had I came really close to not coming because I was like "I can't leave. I just can't leave. I can't leave them." I was wrong. I was wrong and I went to Austin and I went to Vegas and you know, things were good. Yeah. 

[00:28:12] Jason: Yeah. So awesome. Well, it's been really cool to see your progress. We really appreciate. Seeing your growth and yeah, there's no question in my mind. A lot of people hear you say, Oh, maybe a thousand, 2000 doors. And they probably think: this guy is ridiculously off his rocker that he could just believe that and the audacity to have that mindset. And I'm sure when you first came to DoorGrow, a thousand doors was like, probably magic, some magic, like pipe dream in the ethers that you would never even consider. I don't know, but.

[00:28:40] Michael: 300 seemed unimaginable. 

[00:28:43] Jason: Yeah, but now it seems very doable. And you're aware of the DoorGrow code and like we've got clients breaking a thousand doors. We've got clients doing it. And there's no question in my mind. You could easily do this in the next two to three years. If you really wanted to easily. 

[00:28:57] Michael: Yeah, I work my golden 100. That's another thing I learned at DoorGrow. To have people that are valuable people that I love and care about that. I have to touch every 30 days because they love and care about me and buy it. So they send business. They ask questions and we share information. Yeah. And for that, I'm indebted to you. 

[00:29:19] Jason: Not at all. Well, great. Well, yeah we, it's been really awesome seeing your growth. So cool. Anything else we should ask Michael? We've got him hanging out here with us. What's next for you, Michael? What's next? 

[00:29:31] Michael: Well, once we go over 300, then the double it again.

[00:29:34] Jason: Yeah. So what I see next for you is you've got some of the systems installed. And then I think what it will be next is to level up your three key systems of. People, process, and planning and maybe starting to build out even a little bit more of that executive team. I think you've got a good team going now and I think then what would be next would be maybe starting to acquire you'll be the one eating up some of these other companies. And I think, maybe working with us on acquisitions, and I think that'll be the quick pace to grow. And that also bring you really great people too, if you want. So

[00:30:07] Michael: we're working on two. They're on a slow simmer because companies that I'm looking at have some. Bookkeeping issues. We'll just put it at that. 

[00:30:17] Jason: It's an opportunity. Yeah. Always do. 

[00:30:20] Michael: So we may be able to fix the problem. Definitely. 

[00:30:24] Jason: You'll be able to fix the problem. Yeah. Yeah. Very cool. Well, I'm excited to see what you do in the future. I know like, I've seen companies hit all these different stages. I know. We know the challenges that you're going to hit at these different stages in growth. We're here to support you. And for those listening here on the DoorGrowShow if you are struggling, you're hitting some of these sticking points, these milestones, you're stuck in your mindset, whatever. Be like Michael, be like Mike, not Mike, but all the reference, be like Michael and you know, talk to us and let us map things out with you and see if we could help you out. We'll be sure with you. So, well, Michael, appreciate you coming on the show. We appreciate having you as a client and grateful for you. 

[00:31:09] Michael: Thank you. Thanks. I appreciate it. Have a good day. 

[00:31:12] Jason: All right. Cool. So, if you're wanting to get into our free community of property management entrepreneurs on Facebook, go to DoorGrowClub.Com. We have some free gifts that we want to give to you. You'll provide your email as you join the group, we'll give you an, a drip, an email drip of some free gifts, including a fee Bible and some vendors that you can use and some different tools just to help you help yourself and help the industry level up.

[00:31:42] And we, and if you provide your info, we will also reach out to see if you'd like to have a conversation with us and see if we could help you grow your business, which the answer usually is. Yes, we can. So we would love to support you and help you out. And if you're wanting to test out your website, which you think might be amazing, go to doorgrowcom/quiz and test your website. A lot of times, this is a great gateway to realizing that you have some blind spots in your business. When you see that your website is leaking lots of money. Which is something we can help you out with. There's a lot of other leaks you can't see, and this might crack your mind open, get you to be open minded like Michael and allow us to be able to help you and support you and make a lot more money, have a lot more freedom and make a bigger difference out there in the marketplace.

[00:32:34] We appreciate you listening to our show. If you could do us a favor and leave us a good testimonial on, if you're hearing us on iTunes or like, or comment all of these things help us out and help us get the message out to enact our vision and our mission for this industry of helping it level up.

[00:32:50] And until next time to our mutual growth, everybody, bye everyone. 

[00:32:54] 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! 

[00:33:21] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Oct 6, 2023

How do you decide to differentiate yourself and your business from your competitors? There’s only so much you can offer to owners and tenants before you completely burn yourself out. What if there was a way to benefit you, your client, and the tenants all at the same time while increasing your profit margin?

Join property management growth experts Jason and Sarah Hull as they chat with Andrew Smallwood from Second Nature. Learn how a resident benefits package can create a win-win-win scenario for you and your clients.

You’ll Learn

[04:56] Is it Possible to Double Profit Per Door?

[07:13] What is a Resident Benefits Package?

[21:37] Ways to Protect Your Investors/Owners

[25:19] The Pitfalls of DIYing Resident Benefits Packages

[32:07] Increasing Profitability with Resident Benefits Packages

[39:31] At What Stage Should You Implement a RBP

Tweetables

“Property managers don't just have one problem. They have a thousand.”

“If we can move the needle just slightly to increase revenue, but also just slightly to decrease operational cost, right, it's very easy to double profit margin in a business.”

“It doesn't matter how many doors you have if you're not taking anything home.”

“It's important for property managers to keep the main thing, otherwise it's so easy to get distracted as an entrepreneur.”

 

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] [00:00:00] Jason: If we can move the needle just slightly to increase revenue, but also just slightly to decrease operational cost, right, it's very easy to double profit margin in a business. 

[00:00:15] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, Impact lives, and you're interested in growing in business and in life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.

[00:00:52] 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 along with Sarah Hull, co owner and COO of DoorGrow. Now let's get into the show. 

[00:01:18] All right. So our guest today is Andrew Smallwood of Second Nature. Andrew, welcome to the show. 

[00:01:25] Andrew: Hey, thanks for having me excited to be here. 

[00:01:28] Jason: So we were talking beforehand and I was expressing how jealous I am of his amazing digital SLR camera. That's so zoomed in on his face. So you look really good today. 

[00:01:37] Andrew: Well, we'll keep it on the face because I've still got some like summer workout to do the summer bods. We'll keep it the neck up here. 

[00:01:44] Jason: Got it. All right. Yeah, I'm working out too. All right. Cool. So our topic today is doubling profit per door with a resident benefits package. You guys, your name has come up— Second Nature— over and over again related to this topic. So I'm excited to get into this before we get in though. Why don't you share a little bit about yourself? How did you get connected to property management? I doubt you woke up when you were a little kid and said, "property management" Second Nature... this is my dream future. This is what I want to be doing." So there's always a story of how people get into this industry, so. 

[00:02:19] Andrew: You know, that's true, Jason, although if I think about every five to 10 year period of my life and where I may have predicted I would be five to 10 years from now, I don't think I've ever gotten that answer right, to date. So, I think I'll probably just stop trying, but really have enjoyed— you know, since 2017, actually is when I found the company at the time. It was called FilterEasy. A couple of years later, we rebranded to Second Nature as we saw our customers were looking at, you know, they had more than just one problem to solve. I think you guys know probably better than anybody property managers don't just have one problem.

[00:02:52] They have a thousand.

[00:02:53] You know, customer said, "Hey, we love the way you're working with us on this. Like, is there more that we could do there?" You know, rebranded to Second Nature, but I'll be quick with my personal story because I think probably other things would be more relevant to the audience wants to hear, but my background came up and coming up in sales was in sales and sales management for 10 plus years, also got into the nonprofit space involved with the Front Row Foundation, which is a cause I'm still passionate about. They put people battling life threatening illnesses in the front row of their dream live event. And so I'm the board chair for the Front Row Foundation today. I've been involved with them in various roles before finding my way to property management. And yeah the CEO and founder of Second Nature, Thad Tarkington, and I actually worked in the same company, although we didn't know each other super well. We were acquaintances in our previous company. And and I was looking to get into B2B from where I was. And that's what attracted me into the cool business. I saw it was a really great product. The customers really loved it. And that's what attracted me to the industry and I've loved it ever since.

[00:03:57] Jason: So what do you think the major difference you see between B2C and B2B? What like really was driving that decision? 

[00:04:06] Andrew: Yeah, I think, you know, in B2C, it was very transactional, like, have one meeting. And it was, you know, this was like a luxury house where items just to put that in perspective. And so it was like, you know, an order might be a few hundred dollars or a few thousand dollars, and it was like, if you didn't have an order form in 20 minutes, then you didn't have an order, right? Yeah, there wasn't a decision at that point. And, you know, I got a lot of like professional foundational skills that I really appreciate from those experiences. But, you know, what I appreciated was developing relationships and continually, you know, working to drive success right over a longer period of time with customers. But that was more interesting and more fulfilling and also would involve developing new skills and learning new things. And so that, that's what attracted me to B2B. 

[00:04:56] Jason: Awesome. All right. Cool. So let's get into the topic at hand. So doubling profit per door with the residence benefits package. So is it possible to double their profit per door?

[00:05:10] Andrew: Yeah, it better be, right? If that's the title of our episode. So, yeah, I mean, fortunately, Second Nature works with a little over 1500, just shy of 2000 management companies across the United States. And if you believe the, you know, studies that have been done out there and benchmarking a lot of property management companies can see their profit per door, you know, somewhere in the 10 to 15, you know, per unit range, obviously some less than that, right. And it's sort of some more than that, but a lot of companies we encounter, that's the range, you know, oftentimes when we encounter them, and the cool thing about a resident benefits package is in 30 days or less, they can be adding, you know, oftentimes $17 in profit per door, sometimes more, sometimes less. We can get into the details of why that can vary, but it can be a really dramatic move. And if it's a fully managed resident benefit package, it can actually be a very easy one to get going. So a powerful step to take. 

[00:06:08] Jason: Yeah. I think a lot of property managers maybe don't see this. They don't realize this. We get so focused as business owners in the beginning of just trying to get revenue up, trying to get in revenue, and the challenge is: if we can move the needle just slightly to increase revenue, but also just slightly to decrease operational cost, right, it's very easy to double profit margin in a business. And Sarah had ridiculous profit margin in her business because she's ridiculously efficient. What was your profit margin? 

[00:06:41] Sarah: On a bad month, it'd be like 60%. 

[00:06:43] Jason: Yeah, so. Wow. And the big secret was she just wouldn't talk to people on the phone. Like that's a big part of it. And still had to talk to people. Yeah. So she's been able to do some amazing things with our clients in increasing profit and profit really per door is the thing that property managers should be taking a look at because it doesn't matter how many doors you have if you're not taking anything home. So let's talk about how they can increase this using a resident benefits packages. Let's define a resident's benefit package for those that have never heard of this idea. Let's start there. 

[00:07:17] Andrew: Yeah. So the way we think about the resident benefits package, and I'd say, this is a generally accepted definition in the industry— is this is a suite of products and services that elevate and professionalize the resident experience, right? And so that's the 1st thing that it does, and it's creating an experience that residents will pay for, and that they'll stay for a recurring monthly charge, right? Alongside rent, there's the costs, right, of all these ancillary service. We can get it into examples of what those different products and services are in a minute. But that's what the property manager is doing. They're saying, "we're going to bring a different level of service. There's value in that service." and if there's a cost associated with that service as well, that's how they drive that as a profit center, but 1. That is bringing value to the resident, also protecting the investor from risk, and then the property manager benefiting as well. We call that a triple win. And that's what we focus on. 

[00:08:13] Jason: Nice. Yeah. Value to the resident, protecting the investor and what was the third one? 

[00:08:19] Andrew: Yeah. And the property manager should be reducing costs and adding a profit center as well. 

[00:08:25] Jason: Love it. Okay, cool. So those are three awesome benefits. Now maybe we'll get into some specific examples, but let's go to this first one, the value to the resident. And does this work only in— because I know some property managers right now are listening and "this won't work in my market. My residents are cheap or my residents don't want extra value 

[00:08:48] Sarah: or they don't care."

[00:08:49] Jason: Yeah, you just want the lowest price possible maybe. So let's tackle the value to the resident.

[00:08:55] Andrew: Yeah. Well, I mean, I think first i'd like to acknowledge some of the truth in that, which is that if I look at different asset classes, right, and you look at like multifamily, which has really done a lot of investment, like you think about class A multifamily major MSAs and like there's golf simulators and bark parks and like, you know, three water fountains and like all kinds of investment.

[00:09:19] Right. And then generally the way you see them monetized is both as a part of the rent— they've figured out how to, you know, classify their property to place where they can actually monetize that in the rent itself. It's amenitized and then also their services like valet, trash and other things like that, right, that are going to be charged as a separate ledger line item there. And so when we think about single family and smaller boutique, multifamily and scattered site properties and third party managers, you know, and I think about the resident profile of who's running the class A, you know, golf simulators place we were just talking about is probably that's probably different value for that person than, like, you know, your typical couple in their 40s with a couple of kids and a dog right in the suburbs, like they're not looking for the same things, right? And what would be valuable and important to them?

[00:10:09] So, I think it's okay to acknowledge that different resident profiles may value different things, right? Where we started. Where we started with this was, okay, we see a future where there's actually a really and truly incredible resident experience. I mean, dozens of dozens and dozens of products and services and bucketing them into what's already required in the lease. Right and so we started with that before going to "hey, what's like standard, but could be opt out or what might be really cool for some residents?" like, you imagine lawn care as an example. That's probably not something that every resident would pay for. And some would choose to do it themselves and. You know, but there's probably a small percentage of residents that really would appreciate having that kind of service done and coordinated for them. And there could be a great revenue opportunity there. So we're working towards that, but starting with the mandatory stuff, that's things like renter's insurance is generally a requirement of the lease, right? That they have it. When you think about paying rent on time, like that's an essential responsibility.

[00:11:10] So how can we make things easier by creating a reward system by every time someone pays their rent on time, it actually boosts their credit score, right? Automatically this is happening. It's almost crazy to think that somebody's largest monthly expense is the only one that they aren't getting rewards points for and that they aren't getting credit, you know, benefits of their credit score for. We obviously started with filter delivery service.

[00:11:32] Like, they got to change the filters on time, but how do we make that so easy to do? It's going to happen the vast majority of times versus all the friction that gets in the way but otherwise, and on down the list. So, hey, we've kind of tackled these things that are core least responsibilities first, and what we've seen is: yeah, occasionally a resident might say 'Hey, I'm not sure about the value of this," and they need some additional explanation. But when it's properly priced, when it's properly positioned and you've got the right product mix, right, with those things all done together... extremely effective, right, for property managers that hasn't gotten in the way of being able to perform, you know, and drive their core leasing KPIs and things that would create a trade off or a compromise for investors or the managers. So that it keeps that triple win intact. 

[00:12:19] Jason: Got it. So what are some of the things that might be included in a residence benefits package? 

[00:12:28] Andrew: Yeah. So we just alluded to rent reporting. Every time someone pays their rent on time, what we do is we actually help take that information. Get it to the credit bureaus so that it's building the resident's score and to give an idea of the impact of that, you know, it's common to see 20 30 40 point bumps. There's some incredible you know individual kind of outlier cases where we've seen 70, 80 point increases, right, in individual profiles. People who did not have a credit score before actually establishing the credit score, right? Which is a big deal and when you think about You know, especially today where interest rates and everything has gone like— the cost of credit has just. Like, if you look at the interest rates on auto loans, they've doubled in just the last few years. Obviously, everyone knows what's happening, probably, you know, with mortgages, right? And what's happening the rate on the home loan and credit card, right? Credit cards. Those are really the big three. And you look at the savings. Over somebody's lifetime of having a 40 point higher credit score, they were at some point to purchase a home, purchase one or two cars, right? And, you know, carrying the average credit card debt that American family has. It's 6 figures, right? It's 6 figures in savings of their lifetime. So it's a really big deal. So that's exciting. The rewards points that we mentioned every time someone's paying on time, they're getting cash value, which they can go then redeem in a marketplace where there's hundreds of brands, right? That they can go redeem that everything from practical stuff of Starbucks, gift cards do like, I actually redeemed for some like bamboo pajamas. I don't know if you guys have seen this or any listeners have seen it, but this bamboo— I'm a sucker for like soft material, like tactile stuff. So anyway, I got the bamboo pajamas. That was my thing, but there's wine, there's dog food, like all kinds of stuff from really practical every day to kind of fun and luxury spend, right, that people can leverage that for, and they can use it right away or they can save it up and bank it. They don't lose it over time. You know, the other things we were talking about was on time filter delivery. So as opposed to "Hey," putting it in the lease and saying, "this is your responsibility." but then residents don't know what their size is. They don't know what quality to buy. They don't really know how often to do it, or they're not going back to page 18 at least to remember that. There's all these things that get in the way. And typically it's your residents who have been homeowners previously. That would be like probably the best at doing this. They felt the pain, you know, themselves, or they've replaced or paid for HVAC, you know, bills or oil cleanings or what might you you know, those are generally your best change, but that's, it's a small percentage. Most property managers report 5, 10, 15, maybe 20 percent of residents are changing exactly on time with the exact right filter, exactly the way the property manager would want them to.

[00:15:06] So what we did, it's not perfect. You know, Jason and Sarah, it's not like, okay, a hundred percent of the time it works every time. But we actually did a study with the national rental home council across 8, 000 single family rentals, 18 months. And we looked at four operators. And it was A B test, right? So some it's hey, you're relying on the resident to do it in some cases, even leaving some in the closet for them to change. Right? Most of the time they're right at move out right where you left them versus a delivery program where they're being delivered every 2 to 3 months. Exactly when they need to change, and what we saw was a 38 percent reduction in HVAC work order volume, right? Between those getting delivered and those not. And the reason that happens is because you go from, you know, 10 or 15 percent changing them to all, but 10 or 15%, right, change them. That's what drives different resident benefits because they're saving on their energy bill and they're breathing clean air and it's as easy as opening their front door now to take care of that lease responsibility.

[00:16:07] So, that's a great one. I'll pause here for a second, but we could talk about renters insurance, which is a big one, ID protection, on demand pest controls, actually the newest feature that we've rolled out most recently, so that's a newer one. A fresher one. Yeah. Happy to dive in more if you guys feel that's appropriate.

[00:16:23] Jason: Yeah. Yeah. I think, you know, people understand the list of all the things their brain starts to go, Oh, I could see how this would be beneficial. This would add value to the resident for sure. 

[00:16:33] Sarah: So if you if you had a property management company that does not have a resident benefit package currently, and they're looking to implement one, but they're like, "I just don't know, like what I should put in there. Should I put everything? Should I put like just one thing?" Like what is some advice that you have on like what to include and why? 

[00:16:52] Andrew: Excellent question. So we can provide a link, I think to you guys the other show, but rbp.secondnature.com, right, is a place that people can go. And we've actually built a contact form there where people put in the state that they're in, sarah. It'll actually pull up the calendar of the person on our team who works with property managers in that area. And so what we generally do in a call is talk about what are their company goals, like what are they trying to optimize for, right? That's the first thing we'll consider. But then really define what you want your resident benefits package to do for you and your residents, investors. Map out that triple win. Once that's clear, the next thing we will do is kind of share, like, Hey, in your market, like your resident profile, your property type, right, your area, here's the product mix, right. And pricing and presentation, right, that we are saying that's a. Compliant, right. Compliant with your local laws and regulations. And then B. You know, is getting the best business results, you know, for that. And so we provide that kind of consultative approach and it can vary.

[00:17:55] I mean, the fact of the matter is filter delivery in Orlando, Florida, right, is a different problem than in San Diego, California. Right. So we're not going to recommend the same thing in two different places. We take a kind of like value based approach. Once we help work with the operator to figure out, you know, what that's going to be and what the right fit for them is.

[00:18:17] Sarah: That's awesome. Super helpful. And I like that it's like, very customizable because I think this is something that people just, they hesitate on a little bit because there's so many options. And especially when we take clients through pricing. Like, what do I include in my high plan? What do I not include? Like, what are the things that I should— and these are always where we see people get stuck is like, what are the benefits that we should include? And if there's something that really helps them figure out, like, am I compliant? What am I actually looking to do and like what in my area seems to be working well already? I think that would be huge for people. So I'm really glad you brought that up. Thank you. 

[00:18:54] Andrew: You know, I'll jump in with 1 thing, and then I think Jason was going to go maybe towards the investor side. If that's where we're going next, but something we saw included in benefits packages early. That we've started to see phase out. Like maybe that could be interesting for people if they've heard about the past, you know, keeping up with this is originally before we had a lot of what Second Nature and other point solutions have been able to do and really productizing and scaling some of these services is. You know, problem is we're figuring out, well, what can I do on my own? And I think some of that is still relevant of communicating anything that differentiates you from a for rent by owner, right, versus a professional management company that you have multiple payment options, right? Maybe you have 24/7, you know, maintenance coordination that somebody can file a maintenance request at any time versus I remember one of my first early renting experiences, you know, I rented from a dentist who had four rental properties and it was like two weeks to get ahold of him to let him know that it was freezing cold in DC. Yeah, I was a college kid that like wore flip flops when it was 10 degrees outside. I didn't complain too much, but you know, thinking about those kind of experiences being a professional, like probably the people listening to this, I would never have that experience, right, working with their company. And so, hey, we do think it's important to communicate those things. Even if you don't monetize them or necessarily charge them in your RBP, it's a good place in the RBP to communicate those differences between a professional property manager and the FERBO. But the one that I've seen phased out were these kind of like early on before there were things like filters and insurance and credit and stuff that felt like really tangible to bring in. We often saw things like, hey, here's a get out of jail free card on late rent, right, or an NSF fee. And the reason we saw that early on is because it was so easy for a property manager to say, hey, this is worth $50, right? Or worth 40. It's like this tangible value of what you're giving, right? As a part of that and communicating it. Because they felt like they didn't have a lot of substance up front. But as more substances come in, we've seen that phase out because people started to realize, well, if I'm incentivizing, you know, on time rent, is that really a triple win for like my team that has to deal with that? Is that a win for the investor? That's not getting their rent on time. And so it's really about how do we incentivize the right behaviors, right? That's good outcomes for everybody. And so that's, that is something that we've seen change over the last couple of years, some of that stuff kind of phase.

[00:21:26] Out and focusing on a more proactive and incentivizing what you want to have happen type of approach. 

[00:21:32] Jason: Yeah. Incentives matter a lot, especially with tenants. Okay, cool. So let's get into then protecting the investor. So, I mean, I can see how some of these things, just if the tenants are behaving better, it's going to protect the property better, like getting filters changed, things like this.

[00:21:51] But maybe you can provide some more detail on that. 

[00:21:54] Andrew: Yeah, I mean, I think you know, a huge one is if you think about in single family rental and that investor profile, you know, in particular, I think about how important it is to keep the property occupied. Right? And you know, if you can keep a resident happy and renewing, right, renewing their lease, then yeah, that's a big win for the investor versus all that. It's not just the vacancy cost, right? It's also all the maintenance and repairs and everything that has to happen during that time. And so we, I mean, we have a client. They've got a scaled single family rental organization, over 7,000 units that they manage in a few markets, right? And their average their average tenancy is just under seven years. Wow, which is like really incredible, right? And that's not just because they have a resident benefits package. It's more than that. But it's really interesting to see a lot of the property managers really pushing for "how can I drive a great resident experience?" That people will pay for and that they'll stay for right and extending you know, attracting great residents and then keeping them longer. How that drives investor value. And then while they're there in the property, they're taking better care of it. The filters are getting changed on time. There's less HVAC expense, right? 38 percent less HVAC bills eliminates 38 percent of those bills that it makes an investor question, you know, "I got into this for predictable and like risk adjusted returns and then boom, I have this 7,000 expense."

[00:23:23] Maybe I'm thinking about selling or do I really want to stick through this or I just ate up the rest of my year's returns, right? You can eliminate those kind of moments. That's really what we're after, right? How do we attack those kinds of moments that you know, create those emotional kind of negative experiences for investors that would make them say "you know, I want to, maybe I want to put my money somewhere else, or maybe I'm not up for continuing this." so we think about how do we create a resident experience so good. Residents don't want to leave. How do we create an investor experience so good, they don't want to sell? They want to buy more. How do we create a team experience so good, the talent wants to be in this industry and wants to grow in this industry forever. And that's that kind of flywheel of what a triple win experience creates. 

[00:24:07] Jason: Yeah, I like it. They're increasing the lease renewals. They're lowering their operational costs by not having those happen as often and because they're taking better care of things, there's going to be less maintenance challenges, et cetera, better property care, lower HVAC expenses.

[00:24:23] I mean, this sounds like an investor benefits package. 

[00:24:26] Andrew: Yeah. I mean, if you look at, if you were to Google resident benefits package, You'll see Second Nature's content, but you'll also see a lot of property managers. And of course, property managers, their website and their content is often generally pointed at property owners, right? And you'll see a lot of the results are like, "Hey, our resident benefits package, how it benefits investors". And you'll just hear it from their mouths, right? It's the things I mentioned and more, like if all of your residents have renters insurance. Guess what? You can get a lower cost on your property insurance as a property owner and investor, right? If that's the case because you're protected from liabilities, especially if there's a master policy in place that has special coverages that protect the investors. Like our insurance products and others that offer great insurance products in the industry. So, whether you're working with Second Nature or not, you know, bringing these kinds of programs and designing things to be a triple win is something we'd, we really encourage people to pursue. 

[00:25:19] Jason: Now, if somebody were trying to design this on their own, then they're probably going to have to source several different tools and services, which I'm guessing you guys like have aggregated and some of this stuff is in house, like the filters and some of this you've partnered, I'm guessing, but you've already brought all of this together. So, one of the challenges or one of the concerns is in those situations is the business owners thinking, "well, I'm going to be cheap. I can do this for less if I go and source all these components myself. Is that accurate?"

[00:25:51] Andrew: Yeah. Yeah. Great question. You know, it's funny. I think I was telling you, we had our whole team in Nashville this past week. And we actually brought a couple of our customers in, three customers to have just like a customer panel. It was great for people not in sales and account management roles, like people in finance, people in technology, IT, to really hear directly what it's like to be a property manager and everything else. And Kevin Patterson was with us. He's a property manager, manages about a thousand units out of California. And Kevin was talking about it. He's like, yeah, "I saw what you guys were doing. I'm like, 'I can do this.'" And he is like, "so I bought pallets of filters, right? And had them shipped to my office. And then we realized, oh my God, like now we have to store all these filters and inventory. What a mess. Yeah. I still have some too, you know, two years later."

[00:26:33] So, I mean, here's the thing. I would say there's probably a percentage or two, like my observation is there's a couple percentage, you know, of companies out there who are wired in such a way and just so passionately logistically detailed that if they wanted to do, you know, a couple of these things really on their own, they probably could do it.

[00:26:53] But I think most property managers recognize. That, "Hey, if I can make $17 in profit per door, I don't have to add to my head count. I can have this whole thing up and running in 30 days and bring that impact to my business." Right. You know, fortunately Second Nature hasn't lost. I can probably count them on a hand or two, customers out of 2000, right? That we've signed over the years. And that's our job, right? It's to continually provide a competitive rate that's attractive, that would make people want to pick us, but I will say this: we've advised a couple of companies who just say, "I want to try it and go on my own." And sometimes with Kevin, like we give them some advice, they end up working with us later. A couple of them have been able to make it successful on their own. We're happy to help, you know, in either case you know, and provide some insight and help avoid some heartburn. I think some things are harder than others, like insurance. Like if you're going to build your own insurance products, you've got to get certain licenses.

[00:27:47] And I want to set up a whole different entity and everything else, you know, for that, but you know, some things are easier than others. Some things are harder than others. So it kind of can just depend what we decided to put together. 

[00:27:59] Jason: Yeah. I think it's important for property managers to keep the main thing, otherwise it's so easy to get distracted as an entrepreneur. We're like, "let's add this and let's do this," and then suddenly the main thing starts to slip. So you're like, "cool. I'm going to beat that $17 that Andrew Smallwood's going to get me per door. I'm going to get it to $20 or to $30," or whatever. And then they're losing out on hundreds of dollars because they're not getting more clients. They're not focused on the main things in the business and retaining clients. And they're like, "Oh, now we have to do this," because you know, in order to do all of this, it's building another business. Building another business in the business. And one of the biggest problems I see with entrepreneurs, especially in early stages of their development is this idea that they need to just keep doing more stuff themselves and they start like expanding, doing other businesses. They have 20- 30 things. The most efficient model for an entrepreneur is one business. That's the most efficient. Generally, all these billionaires scaled one business, right? They cause they have so much focus. And I think focus is the most important of all five currencies of time, energy, focus, cash, and effort in relation to scaling or growing a business it's focus. That laser focus. And so keeping the main thing I've made that mistake, you know, doing my first conference, what I call my $2 million mistake, because we were growing at a healthy pace and then 300 percent a year, and then it was like, let's do this crazy, big, expensive conference and then sales marketing, like everything had to go towards this conference and it distracted the business because we were on the hook. You're on the hook with hotel. You're on the hook with the vendors, like everything that's going on. And that was really difficult. And that was a big lesson to me that the main thing has to stay the main thing.

[00:29:51] It's super important. 

[00:29:52] Andrew: Yeah. I mean, you said it so well, like when I think of Second Nature's own outsourcing decisions, right? Like I look at it through three lenses: so one is scale, right? Do I have scale or does the partner of scale? Who's going to deliver value through scale? Right? Second is skill, right? You know, do I have a certain skill or competency? Do they have a skill or competency, right? Who's going to drive more value that way? And then the third is time, which we were just talking about of like your opportunity cost and your focus on what you do and you know, I suppose there's a probably a fourth dimension there of just control of like ultimately the customer experience that you're trying to create can't be created reliably by an outsourced partner. And they're not dedicated and committed to that, or you're not aligned on that. Yeah. That would be another reason to do it yourself. But but yeah, it's, man, I take your point, Jason, of just, it's so easy to be ambitious and want to take a lot on and not stay focused on here's my core competency that I can continually leverage, to drive a lot of value. And here's how I can bring in complimentary pieces around it to create something bigger than that. 

[00:30:58] Jason: Yeah. I mean, a big part of what we do at DoorGrow is just getting entrepreneurs to focus and then they start to scale really rapidly. So, I mean, in this industry, it could be diluted focus on different types of properties they're managing because each different type is almost like a different business. They're like, "I'm going to do commercial, I'm going to do associations," and then they're like trying to run multiple businesses with team members that are trying to jump into multiple businesses. And then it's a mess. And they're just not going as fast. And so this I view as, this is like adding on another business, and if you can strap on these tools from vendors, other companies, and get these resources, you can go a lot faster and keep the main thing. So, yeah, love it. So the third thing we talked and we've touched on this in a few instances of how this can help, but the third thing was increasing profit. So, I mean, there's the obvious bump that you're charging a fee for this and you're get convincing the residents. And for the residents, I think a lot of this would sound like a no brainer. They're getting more value in their mind than what they're going to be charged, and then it becomes a no brainer for them to do this.

[00:32:03] And it protects them and it helps them get better credit. But let's talk specifically about profitability, like increasing profit. 

[00:32:11] Andrew: So, yeah. So I think, you know, at Second Nature, like we do care about the experience and providing convenience to people, but it's also really important to us that there's a strong economic case for all parties. And so the way we often design and the recommendations we make on pricing. I mean, listen, it's a property manager's business. So Sarah, we're going to let them choose, right? Here's it's their pricing that they're charging their customer. We're not going to get in the way of that. That's in their control. But when we make recommendations, which I'll say nine times out of 10, right? If not more. It's set up in such a way where a resident is saving over $100 per year compared to what they're already spending right on the same expenses if they were to go with the status quo, right? Versus being enrolled in the benefits package. And then we make that as easy as signing their lease. There's a clear economic benefit, right? For the resident for the investors with HVAC savings. Everything else we're talking about earlier. Well over a hundred dollars per year in annualized savings for the investor. And then for the property manager, as we were talking about, well over a hundred dollars per year. Right. And so that's when you create new value. The way we think about it is you have a bigger pie that can be shared right across all parties, as opposed to taking the same pie and saying, "how do I shave off a little more for me?" but then you're cutting into the very relationship that you kind of depend on to support the business. And so how can we find new ways to add on and expand the value and share in that value because that makes it really sustainable and that builds trust while also building your balance sheet and so that's the focus and approach. You know we recommend that property managers take when they approach pricing and the other thing I'd probably give advice on here is that some property managers will go about this and then recognize very quickly, "oh, this is the thinking. I can't—" it's so frustrating, right? When I see an owner do this, you know, like, cost based pricing or a cost based approach as opposed to a market based approach. And what I mean by that is, "hey, here's all my costs. I want to make $17 per door. So here's what I'm going to charge, right?"

[00:34:21] It's kind of like a investor saying, "well, here's my mortgage and all of my expenses, and I'd love to cashflow $800 a month. So I'm just going to charge this for rent." At which point Sarah tells them, regardless of what the market dictates, "yeah, your property is going to sit vacant for six months or it's only going to be vacant for two days and you way underpriced."

[00:34:39] Right? And so the point is, "Hey, here's actually a market based approach to pricing that drives fair value and a good value proposition to everybody." Is the main encouragement we take. And again, if somebody wants to talk to Second Nature, whether they work with us or not, we're happy to advise on what we observe and see is happening in that market as it relates to pricing.

[00:35:00] Jason: Yeah, ultimately the market's King. However, there are different segments of the market. So if people are targeting people at the end of the sales cycle that are searching on Google for property management, for example, the market is going to pay less there, because now you're a commodity. Whereas if you capture people in the blue ocean that are not searching on the internet, which there's a lot more of those, then you can charge more, have more fees, et cetera. And they're easier to close, right? And so the other factor lever that we've noticed with our clients at DoorGrow, increasing their profitability is increasing their ability to sell. So their ability to sell services and to sell the value and to create the pain gap between where people are and where they want to be, what value they want.

[00:35:46] That ability as well as another lever in which they're able to charge more than their competition and close deals more easily. And there's some other levers as well. And so there's the market's one of the factors, but there are some levers that can be leveraged as well. And depending on who you're targeting in your audience, then you also can charge more money.

[00:36:08] So that's something to keep in mind. So, yeah, this is super interesting. So everybody wants to increase profit if they're smart, those of you listening, if you're smart, you want to increase profit, you want to protect your investors, that's like your business, what you do, and you want to provide value to the residents.

[00:36:24] So why would people just not do this? Why? Like have they just not heard of a resident benefits package or why would they not be doing this? 

[00:36:32] Andrew: Yeah, I mean, there are definitely people that fall into that camp, and I'm sure there's probably going to be at least a couple people listening to this who haven't heard of a residence package. I also think over the last few years, this has been a really hot topic that's been talked about a lot, and people are seeing it more and more. As more companies adopt it, they just see it. Like they see our flyers in the Zillow listings, you know, the second photo, you know, beyond the thumbnail, it's like, here's a list of all these benefits, right, that people are putting in the marketing language or listing language or on their competitor's websites. And so I do think awareness is rapidly growing here. I mean, 101% empathy is property managers are often so busy, right? like just to do the kind of like table stakes of property management. It can take a lot of investment into their systems, into their process. I know that's something that you guys offer to folks and help them with. It can really feel like it's hard to implement a change in my business, let alone, you know, I think this is where Second Nature saw a real problem to solve. Like, how am I going to go through seven different sales processes, right, which is really like 21 to 30, if I want to look at more than just one vendor for a service, right? Go through all those processes, line up all my agreements, get those executed, and get my onboarding and implementation set up at the same time.

[00:37:53] And align everybody the same, like consistent experience on going throughout it. That feels like going to Mars, you know, it's like a real big thing to tackle. So that's where we really just wanted to be like the easy button for that and drive, you know, "Hey, we've got a million plus residents on our platform, you know, thousands of property managers that we're working with. And, you know, can we drive some efficiency and pass that benefit alone to the customer," you know, is core to our value proposition. And so that's, I think what has brought, you know, a lot of people to us while we're growing very fast, have earned the reputation that we have, and at the same time we don't take it lightly. There's a lot more work to do. There's still still more change that needs to happen here, but I think the big thing is just the anticipation of all the effort and just the hard work of making any change in your business, right? Is a lot of times what people come up against. 

[00:38:43] Jason: Yeah. I mean, there's a lot of property managers, people have heard me talk about the Cycle of Suck on the show before. There's a lot of overwhelm. There's a lot of stress, a lot of property managers struggling. They're in a race to the bottom in terms of pricing. They're focused on internet marketing, SEO, pay per click, content marketing, social media marketing, which is the bottom of the barrel owners that are the ones left over, the crappy scraps that fell off the word of mouth table. Like there's a lot of challenge there, by the way, we can help you with that. Reach out to us at DoorGrow. So that may be a big reason why they're just not doing these things that are in their mind, ancillary, auxiliary, and they're not adding this additional value and they're leaving money on the table because they're just too focused on trying to just get their business to eke out a little bit of dollars and, you know, they're stressed. 

[00:39:31] Sarah: So I've got a question that Andrew if you have a recommendation on, at what stage would this be easiest for a property manager to implement? Is it easiest right off the bat when they're starting and they have no doors or a few doors? Is it easiest when they have maybe 100? Is it easiest when they get to the 500 plus mark? Or is there a stage at which it's like, maybe it's just in their mind, it feels too hard, and you're like, "Oh, actually, it's really easy, and here's why." 

[00:39:59] Andrew: Yeah, great question, Sarah. I mean, here's the thing. Second Nature works with customers who have as little as their first one to two doors and are just getting started, right? A lot of our customers have hundreds or a couple thousand doors, and we work with a few clients that have 80,000 plus units in their portfolio. So we've worked with people at all sizes who have come and started all sizes. I will say this though. I think if somebody has under 20 to 30 doors, even as simple and easy as Second Nature makes it, you know, probably that person would be better served as they're getting their first couple of dozen doors on in focusing on their core operations, their core systems, their accounting platform getting set up. I would recommend probably holding on the— I'm sure my S and B reps are going to be listening to this and being like, "what are you saying, man?"—

[00:40:47] And jokes aside, like I have talked to a few people where I've like pushed them on it a little bit. Like, "Hey, they've got eight doors," and I'm like, "okay, so here, this handful of hours, right, that you could spend doing this. Let's add $17 per door times your eight doors. Like, here's the business impact to this, and then what are you going to do with that amount," so to speak, right? And "how are you going to reinvest that in your business? Like, how do you see that as the best use of your time versus spending that going and doing, you know, business development or, you know, generating realtor referrals or whatever your strategy is for growing?" Okay. Your business to kind of that you know, initial point of profitability to support yourself. Like, how are you seeing that? And in one case, he said, "this is my differentiator. This is what I get to talk about in my market that I do that others don't. So it's actually going to help me attract more owners. I really want to do this now." Cool. Like I wouldn't stop that person from working with us, but I'd say generally, probably somebody in their first couple dozen doors is better focused on growing that and getting their core processes in a really stable place. 

[00:41:47] Jason: Sure. They can add like one door and make what they would make if I had $17 times eight, right? So if they're focusing on that, but yeah, I get that. So I would imagine then maybe right around that 50 door stage is a really good place. This is where a lot of people start to stack and add vendors and get sort like. Then it starts to make sense to get some leverage because this is a lot of times I call the first sand trap where they start to get stuck between 50 to a hundred, because they're doing everything themselves. And this is probably where they can start to get some additional leverage and add some additional services.

[00:42:18] Andrew: So if I can compliment you guys real quick, I saw like the DoorGrow code thing, and I think part of it may have been blurred out, but I think I got like the gist of it, I remember seeing, you know, how you guys had kind of stages. I'm like, wow, that is so cool. And if I was a new property manager, I would love having and seeing a resource like that of just, "man, here's like what I can focus on at this time that's right for me. It's going to get me to the next phase and then what to focus on here to get to the next one." Like what a helpful and useful tool.

[00:42:47] So I just wanted to say kudos to you guys for putting that out there. 

[00:42:50] Jason: Yeah, thanks. If anybody wants that for free, like they can go to DoorGrow.Com. Click the big pink button on the homepage. 'I want to grow.' And on that page, there's three steps. The third one is a YouTube video, 95 minute training called the DoorGrow Code. It's all about it. So it'll show you how to scale. And we're confident we're doing this with clients that we could take any business from zero doors to a thousand doors in five years or less. If they just listen to us and do what we say at each stage. Yeah. Very cool. So thanks for plugging us. Appreciate it.

[00:43:25] Andrew: So I'm solicited. Yeah. Yeah. But it felt right in that moment. 

[00:43:29] Jason: Yeah. There's very specific things that happen at different stages. And I think if you are at least at that 50 door stage or beyond, like you'll be crazy not to do this. And I love the idea of getting your resident benefits package as a unique differentiator just to stand out, which will give you more confidence in sales. And when people need confidence, the most is when they have the least doors. This is where confidence is a huge factor for them. Like when we take them through our process of cleaning up their brand, their website, all of this, we're really just helping them with their confidence level to go out and sell.

[00:44:04] And they can go out and sell without all that stuff. They don't even need a website. They just need clients. Right. But doing these things helps them. And this is something else I think they can boost their confidence a little bit. And that's worth it. That's worth it for sure. So, well, cool, Andrew, anything else we're missing about this? And if not, then how can people get in touch with you or with Second Nature? 

[00:44:25] Andrew: The only other thing I'd say is anybody who's made it right to this point, 45- 50 minutes in, like, I feel like you deserve a medal or something like that with attention spans, considerations fans. So thanks for sticking with us. I hope you got some value today. Sarah and Jason, I really appreciate the opportunity to be here with you guys. I really enjoyed our conversation. I love you guys' energy and vibe you know, excited to get to know you guys better. And and I'd say this if people are looking for you know, more resources and things like that, we've got at rbp.secondnature.Com, there's a bunch of things, we've got articles, we've got the triple win podcasts that we record a bunch of episodes there that people can check out. If that's of interest to them, we've occasionally got events, digital events and things like that, that we're putting on, if they're just looking to learn more, we've got some of those kinds of resources, or if they're looking to talk to someone specifically about what we talked about here today they can find a contact form to do that as well.

[00:45:16] And just want to express appreciation to you guys. Again, really appreciate you inviting me on and having a chance to do this. 

[00:45:21] Jason: Cool. Thanks for coming on the show. 

[00:45:23] Sarah: Yeah. Thanks for being here. I think this is something that if you don't have it, just look into it. I feel like there's not a downside in this anywhere. So just look into it. If this was something that I had known about when I owned my business, man, would have done that in a heartbeat, but, I really think it's something that can like benefit all parties. It can like help set you apart from other people that maybe don't know about this or just aren't doing it yet.

[00:45:50] And it sounds like they make it easy for you. I think that you're probably right, Andrew. Like you hit that right on the nose. Like they're busy and they're like, "Oh, this is hard." It sounds like they understand that and they'll work with you to make it easy. 

[00:46:04] Jason: Yeah. Yeah I love that you guys are helping people through this process and making it easy. So We'll definitely be pushing our clients to take a look at this episode so that they can start getting the stuff implemented Thanks for coming on the show. Appreciate you. Awesome. 

[00:46:17] Andrew: Thanks guys. 

[00:46:18] Jason: Thanks. All right So if you are a property management entrepreneur that's wanting to add more doors grow your business reach out to us at DoorGrow We would love to help you out anything else we should say All right, then until next time to our mutual growth.

[00:46:31] Bye everyone.

[00:46:31] 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! 

[00:46:58] 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.

Aug 16, 2023

Working with amazing, hard-working property management entrepreneurs is what makes being a coach worth it.

Join property management growth expert Jason Hull in today’s episode as he interviews DoorGrow client Jeff Garner. Jeff went from 150 to 420 doors in 4 months! Learn how he did it.

You’ll Learn

[02:35] Why would anyone get into property management?

[12:40] Fixing the foundation of a property management business

[15:14] Importance of culture in a business

[25:05] Why you need a coach

[27:34] Navigating operational issues 

Tweetables

“No matter what market we're in, it's good. If we're going to the moon, management's great. If we're crashing, it's even better because people can't sell their properties and they go, ‘Oh shoot, we'll turn them into rentals.’”

"Go where they won't go and do what they won't do. That's where the money's at,"

“It all starts with your mindset.”

“Weekly commitments, and you'll start to see the momentum build big time when the team are all visible and can be seen and there's accountability and they get recognized because you have that system installed, performance sometimes goes up.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jeff: I have 420 doors and I have more peace of mind, more direction and I know where I'm going to be and where I'm going and how to get there. 

[00:00:12] Jason: Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not 

[00:00:38] 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 bss, 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. 

[00:01:08] And today's guest is Jeff Garner. Jeff, welcome. 

[00:01:14] Jeff: Thanks man. Glad to be here. 

[00:01:17] Jason: So Jeff, what's the name of your property management business? 

[00:01:19] Jeff: Homes Stretch Property Management 

[00:01:21] Jason: Homes Stretch. All right, cool. And why'd you pick that name? 

[00:01:26] Jeff: I feel like real estate investing it's a long-term play. It builds wealth over the long haul. And for our home stretch of our life, whether you decide your home stretch starts at 40 because you retire early, or whether it's 60 or 70, if you are buying real estate, really it, you know, It's about letting the tenants pay down, you know, principal balance, pay down, depreciation, tax, write-offs, appreciation. Sure cash flow's nice every month, but you can make millions over, you know, 20 year period, 25 year period. And so I see the real value in real estate is being that, so we want to get our owners to the home stretch and, you know, that's kind of how we look at it. So we want to improve and maintain your property so that someday you can either sell or refi and it's in great shape and it's an easy process. Or you just want to keep it in cashflow forever. So our job's to give you freedom and peace of mind knowing that your properties are being taken care of better than you can or anyone else so. 

[00:02:29] Jason: Nice. Love the brand. So Jeff. Why don't you give people a little bit of background on you. How did you start getting into real estate and what made you decide to do the crazy thing of starting a property management company? How did this all happen? 

[00:02:43] Jeff: Yeah, it was the crazy thing because-- so I'll tell you a little bit about me. Real estate's the only business I've ever been in. I got my real estate license when I was 22. I was going to be a real estate agent. Found a niche working with investors because when you're 22, you know, growing up doesn't come overnight. And so when you're got all your, "oh shoot, I'm showing property today," and you have to crunch the beer cans and put them under your seat. because you just turned 21 a year before, you know, it can be a little awkward putting the 40 year old mom and dad and their kids in the car to go show them property.

[00:03:18] Right. Which I did okay at. I did fine. But I found a niche in working with investors because you could sell them one house and most of the time they don't even want to get in your car. Half the time, once you get know what you're doing, you just give them a lockbox code and tell them to call you back and tell you what you think, and they give you a number and you write it and put it in. You could sell them 10 or 20 houses. So I developed a niche at that. I got really good at finding deals and I would send them to my guys. Shortly after that, I decided that I was on the wrong side of the table, you know, three or four years of that. I go to closing, I collect my $2,500 commission check, and he gets a check for $20,000 because he flipped it, right? And I just thought, wait a minute, I'm finding the deal. I'm calling him up, I'm telling him what number to put it in at and he's making all this money. What am I doing wrong? So I got into that side of the business, you know. So, 08 hit crashed. All of us really put me in a position to where I to make a decision on what I wanted to do because all my investors were gone. Right?

[00:04:17] They were trying to stay alive. Yeah. You know, in 08 for the people that didn't go through it, was like If you worked in Walmart and all of a sudden the next morning you woke up and no one will shop at Walmart again.

[00:04:31] Jason: Right? 

[00:04:31] Jeff: Yeah. Never walks through the door. 

[00:04:34] Jason: Yeah. So must have been scary. 

[00:04:37] Jeff: Yeah. And so, I thought, "well, this investment thing's really what I want to do. So I'm going all in. It's time to restart. So that's what I'm going to go all in at." So I really looked at what happened and I realized that history, you know, tells the story and that everyone was riding this wave and had no idea it was a wave because no one does the research to, you know, see what the cycles are. I didn't know there was a cycle. I was young. Yeah. And so the common sense thought came, well, we were at a high. If I was a real investor and I was really good at what I did, I would've been taking vacations, waiting for this crash to happen, and then I'd go out and buy everything I could find and hold it. Yeah, so I did that. I bought 110 rentals over a three year period, all at, you know, probably 20% of what the market is today. And outsourced the management a couple times. Horrific. Cost me more money than you know, one, when I was at 110 properties, I had to take them back overnight because I realized that I had 16 vacants and they didn't even know about half of them.

[00:05:42] Really? Yeah. It was horrible. They just they got overwhelmed and so I built a management company overnight to manage my own properties and had zero desire. It was the last thing on the absolute planet I wanted to deal with was tenants and toilets. I did not get into rentals to deal with tenants or maintenance. It didn't, yeah. So I put together a makeshift management company and decided I'd never take on another property of anyone else's. I'd only do my own, because I was going to do this, it was going to be for myself. There certainly wasn't going to make a hundred dollars a month on a property and do all this for somebody else. Right. That's, that was my thought on being real. And a few years went by '16, '17, realized that I'd gotten tons of equity and I had properties sitting there with 50, 60,000 in equity and I'm making 200 or 300 a month. And I thought, this math doesn't make sense anymore, right? So I sold off over a two or three year period, about 50 of them. But everyone apparently, everyone knew management is a tough gig and there's not a lot of good management companies out there. Why? Right? There was no DoorGrow then that I'm aware of at least. Right? So everyone in the management business just thought, "this looks like we can make some money, let's do this."

[00:06:57] But they had no idea. The machine, it has to be to run well. Yeah. And so they said, "well, I'll buy that property. I'll even give you retail for it, but you have to keep the management." So to this day, I still manage all 110 of those properties, even though I only own 60 of them. Right. So to get the money I wanted, I had to keep the management. And then I just kind of started looking at it is in the last couple years when I realized that we could potentially be getting to another place. If you look at the charts and you look at history that we're you know, we're at a high now, will it last four years longer? Probably. So I had to kind of reevaluate what I wanted to do and I looked at all my businesses, flip business, wholesale, you know, my rental portfolios and my management company, I went, wait a minute, what am I doing? I'm focusing all this energy and chasing down deals and having all these, you know, taking all the risk on everything I buy and just grinding away constantly. For over 20 years now. And I got this management company, although it's not sexy, everyone tells me it's the worst thing in the world to do. Yeah. You know, I realize it was the one thing that was repeatable, scalable, and I could predict. And no matter what market we're in, it's good. If we're going to the moon, management's great. If we're crashing, it's even better because people can't sell their properties and they go, oh shoot, we'll turn them into rentals. I thought, "wait, what am I doing? I'm looking at this all wrong." I just started to look at it and so I started working on getting really good at it and filling all the holes on my own, right, with my own. And it's, you know, and I realized that with the right team in place and the right mindset, you know, which is we want to help landlords, right? I want to take 20 something years of resources and try to convert over this management company and give them to everyone else-- that it could be a great business. And then I realized, like I preach, because I did some coaching in the real estate space throughout the years "go where they won't go and do what they won't do. That's where the money's at," right? So if everyone's going after retail flips and a really nice b and b areas, then go look in the C areas because they're being neglected. If everyone's after all the C properties because the cash flows, so well then go up to your A or B areas and start doing flips because those are being neglected. Nice. Certain town everyone's afraid of? Good. Let them be all fighting in one place and you go there. And so I realized that was what was going on in the real estate market for the management business. So I decided that's what I wanted to focus my energies on. So I literally burned all the other boats, man. No marketing, no wholesaling, no flipping. 

[00:09:40] Jason: Wow. You went all in on property management? 

[00:09:42] Jeff: All in on property management, period. I got online, I did what I did 15 years before, after 08 happened, and I thought, "I'm going to redo myself. How do I do this?" And so I just got online and I started digging around and trying to teach myself things and I got coaches back then, and even though I knew 90% of what they were trying to teach me, because I got coaches in the flipping side, right? I knew you know, 80, 90% of what they were teaching me was that 10 or 20% where I knew would bring me all my money, right? So I did the same thing here and that's how I came to DoorGrow is I found you guys really were the only real system oriented, you know, nuts and bolts teach the how and not just the why. You know, a lot of people want to tell you why you do. Oh, well, you know why? They want to give you the why on, you know, but they don't want to give you the nuts and bolts of the how and tell you connect A to B to C to D and you'll get your results, right? And so, I found you guys, and I knew that's all I was missing to having success because the rest of the management companies all had bad raps. You couldn't talk to a landlord that really loved their management company. Yeah. So I knew I could fix, put those pieces together and really treat it like a business based off of giving people their freedom and peace of mind, knowing that their properties are being taken care of better than theirs.

[00:11:10] If you can do that, anyone listening to this, if you can wrap your mind around being of service. No one else is doing that in the management business. Right? Yeah. You will dominate, it's like I used to say when I had lots of rehab crews going, if someone shows up and does what they say and has half of the talent that I need them to have, they could be rich. That's all they have to do. Just not be the best, but do what you say and show up so it's predictable and we can communicate well and get stuff done. So if you did that, and you can do that with a mindset of, "I want to be of service to the industry." Be the best. You'll dominate, end the story, but you have to wrap that around your mind, you know, and it'll come out in your calls. It'll come out in your conversations at the grocery store. It'll come out everywhere. 

[00:12:00] Hell, I pulled 16 doors out of my gym in the first 30 days after joining DoorGrow because I just got the structure when we went through mindset and and some sales stuff of. Really taking what was in my mind and putting it in paper and going through the process of splitting the page into four spots and right. You know, going through everything. I got to dial it in and then boom, that was it. There's nothing else to talk about, but what I came up with there, you know, home stretch was the name of the business because it fits what I'm trying to do. I know what our mindset is, the culture for my company and you know, we started just plugging in systems and processes. 

[00:12:40] Jason: So let's talk a little bit about it. because you said nuts and bolts, but to most property managers, they're like, "nuts and bolts means how do you like do maintenance and how do you plunger a toilet?" you know, like it's like the practical stuff where you know how to manage properties. Yeah. You know how to deal with tenants, you know how to like do all that. What challenge were you dealing with that brought you to DoorGrow and how did that help? 

[00:13:04] Jeff: It's really hard to explain that. What I really had was is I had a business and it functioned and I did okay, but I did not feel at 150 properties, I did not feel I could bring on 10 more doors. I felt like it would all crumble and break because I had no idea what I was doing really. Right. I had nothing to model. I had just said I got maintenance, my maintenance was horrible. I had all these guys that that was one of the hardest parts to find. But I had all these just subcontractors and every once in a while we'd find someone to come on full time, but you'd have to trust them to be out there all day doing what they said they were doing. And I didn't know how to run that. I didn't know how to manage that. I didn't know how to systematize that where I knew what was going on at all times. And I didn't feel comfortable going any bigger because, I felt like I could see why other management companies had problems, and I don't think they want to suck, right? No, I don't think so. But they just don't want to say no to the money. 

[00:14:06] "Hey, I got 20 doors." oh, we're going to do a great job for you. Let's bring it on. And they're already struggling with what they have. Yeah, right. Just think it's magically you're going to work, or, you know what? It'll give me more money in that way. More money will mean I can do more things. And no it doesn't. It creates more problems that cost more money. So I needed the systems, I needed the processes. Those are the nuts and bolts I'm talking about. Got it. Who to hire to do what and to, because that's it. 

[00:14:34] Jason: I mean, so what's changed then? Like you had 150 doors, you came to DoorGrow and we started helping you change a lot of stuff, right? Yeah, absolutely. So, what things have you changed since joining DoorGrow? Yeah. What are some of the first things we start working on with you? 

[00:14:51] Jeff: Okay, well, really it was just getting my mindset right was the biggest one because once my mindset was correct and I knew and I had our, what we were trying to do, where we could be of service, that opened my mind up to, " how do we do that then?" Right. So that's sort of answering questions for me, you know. 

[00:15:14] Jason: So with mindset, what you're saying is I believe you're talking about all the culture stuff that we took you through stuff. Just the culture stuff and just kind of, I mean, that's the core foundation of the business. Like if we want to make this business built around you, we've got to figure that piece out, right? So we started with that and that probably had a significant ripple through everything. 

[00:15:33] Jeff: Imagine like this, you have children, you all of a sudden you, "I'm going to be the best dad ever and I'm going to have kids." Next thing you know, you got two or three of them, they're under five. You have no, literally imagine your parents weren't good. I don't know. They didn't model worth a crap. Okay. Like, how do I do this? Like, I can feed them, I can put them to bed and I can keep them from killing themselves, but do I really know how to raise them to have commitment, how to be honest, how can I make a five year old a strong member of society at 28 years old, right? But if you have a culture and a mindset, you know, "I want my children to be like this. I want them to have this belief system," and how do we give them that belief system? Okay, "well, let me look into that. Okay. Well, if we go to this school, it'll give them these values and then I can back them up at home. And then with bedtime and, oh, I did a little research here. If I put them to bed at this time, get them up at this time. Oh wait, the sugars and dyes are bad. It makes them spastic and oh, well I'll take that out." And you start learning, right? But it all starts with your mindset. Right. And so my mindset changed and it started making me go down the rabbit holes that are all in DoorGrow of, "Okay. Leasing-- my leasing person that we're just winging it and working out of this software that we really were just doing all workarounds and spreadsheets because we really didn't know how to use it. Watch this. Watch these videos on leasing, watch these videos on placing tenants." And then I would watch them and then we would meet and put together a process and a system on how it's going to go instead of just winging every call we got.

[00:17:17] So I started building it out position by position. I went and I found a new property manager that had the capacity to be a really good property manager and grow from some of the-- I'm still new inDoorGrow. I'm only six months in. Right? And honestly over the last month I've had a two months, I've had a really hard time getting into DoorGrow because I.

[00:17:42] I'm up 420 in doors. Right. 

[00:17:45] Jason: So, yeah. So, and let's get to that. That's interesting. But so the children, in your analogy here, this is your team you're talking about, and this is my team. Yeah. And you were in it for what, maybe a couple months and then you started replacing the entire team?

[00:18:00] Jeff: The entire team is gone except for two people. And one of the two was almost gone. Because of just be all of a sudden having this parent mindset, I kind of coached him, or you know, raised him in a way in this little short period of time to where he's changed. Nice. And he is just, and the reality of it is, what I found out is he was so unhappy because of how screwed up systems were that everything rolled down to him that once I realized that I got to take things away, put them create and find out what was broken on his role. And he was a main construction manager that we created a different systems and now he's probably one of my strongest pieces. So everyone knew the whole team is new. 

[00:18:50] Jason: So new team, you installed a good culture, you're then able to work with us on the hiring piece and getting good team members in place. Absolutely. You've leveled up some team members because you have culture and you know, like what you deserve and want as a business owner and what have the type of team and we want to build around you. Absolutely. Most business owners build teams around the business, and that's probably what you did before.

[00:19:15] Jeff: Absolutely a pure necessity. And I, I didn't but hire people that fit the culture or what I was looking for. I just hired a warm body that seemed like they would work, and I thought, we'll just teach them what we need them to know. Yeah. And their mindset or what they did in their off time or their goals didn't mean they were their business.

[00:19:36] Jason: Right. Yeah it's amazing. Some simple frameworks like just understanding the three fits to hiring. Yeah. Like culture fit, skill fit, personality fit can shift hiring significantly. So then you started working pretty quickly with one of our coaches on acquisitions. You went out and found a deal. And in four months you were at 420 units. 

[00:19:59] Jeff: Yeah. Yep. 420. And I've got probably we're I'm just, we might be at four 40 or four 50 because we have 20 or 30 vacants that Okay. That are under, that are kind of on make ready that we took over that we haven't been able to fill yet because we have this construction backlog, not on our end, but on his backend. The guy that I bought the management from, which was part of the deal, and one of the reasons he sold was because he had done exactly what everyone else did. He got too big and wasn't saying no, and got backlogged and yeah, he was starting to provide really horrible service, so I went in, bought it from him at a really good price for me, but I think it was still a good price for him because if you're at a point to where you're going to, it's stressing you out, you can't get it all done.

[00:20:46] It's affecting anything, all your other revenue streams and people are getting ready to start leaving you. Someone walks in "wait, you can take this off my hands and give me money? Okay. Where do I sign?" You know? 

[00:20:59] Jason: So what are the things did you do with our team? Have we done a website for you? 

[00:21:03] Jeff: You did a website.

[00:21:05] Jason: What about your branding? Did you change your brand at all? 

[00:21:08] Jeff: Yeah. Hell, hell yeah. I was starting point property management. I changed my brand. We rebranded a week before this acquisition, which I was like, I'm going to put this rebranding thing off because that's another, and then we sat down and I was talking to the team and I don't think they loved it, but they agreed that doing it before we transition all these new owners and tenants over was going to be the way to go because then we would have to change it all up in a couple months anyway when we rebranded and had them in a new website and portal and such so.

[00:21:38] Jason: How about pricing? Did you change your pricing? 

[00:21:41] Jeff: I'm on the hybrid pricing. Okay. The three plans. The three plans now, which is exactly from you guys. Which was another thing that really helped me because with changing the pricing and doing the hybrid plan and going through that training, and it was, once again, it was all the why's we're doing it. I got to design the plans that fit our culture and provide the service we wanted to provide. It gave me more confidence, honestly, in what we were doing, even though I was going to be charging more now. So yeah, we're on the three tier pricing, hybrid pricing. 

[00:22:19] Jason: So you've changed your team, you changed your branding, you changed your website, you changed your pricing model. You've probably made some adjustments to your pitch. Do you do the Golden Bridge stuff? 

[00:22:31] Jeff: I didn't have a pitch before. You didn't have a pitch? I didn't have a pitch. I'd just say, "Hey, we do management. Can we manage your properties?" And I just like, that's what I'm saying, when I didn't know, like I couldn't wrap my mind around, because I'd been flipping houses and wholesaling. I had that down to a science. I am a fricking ninja in that. Yeah. But the management side, it was just, "Hey, we manage properties." Yeah. This is what we charge if you want to come over. Cool. If not, I got to go. I got other calls with me, you know, and to have a pitch. So it was literally everything and the pitch made it. That's what I'm saying. I pulled 16 doors out of the gym. Yeah. Just "what are you doing now? Oh, I'm doing management and it's--" 'boop,' just going into my pitch casually, just real casual because we're at the gym. "Do you know anybody that manages any properties? Yeah, I do. I got this buddy. Cool. Could I talk to him? That was it. 

[00:23:23] Jason: So I love clients like you, Jeff. because you implement, like you went through the rapid revamp and you did it rapid, like you got that stuff done. Yeah. Pretty quick. And then you start working on acquisition because you saw that opportunity with our acquisitions coach and you're like, "I'm going to do that." and you're just doing stuff and I think that's a testament to you. You know, this is part, I think when we work out more often at the gym, and I think our brains work better. I think that's science, like that's been proven. Like there's something released in our muscles. And you're a big dude. I got to get to your point. I'm trying to work out to catch up to you. 

[00:23:59] Jeff: I'm going to be pitching you on coaching you in that area.

[00:24:02] Jason: But I think I appreciate that you've been implementing this stuff rapidly and I asked you at DoorGrow Live, I was like, "where do you see yourself, you know, do you think you could get to a thousand doors?" And you were like, "yeah, probably a year and a half." Like it's nothing. Like it's nothing. And you're like, "well, maybe two years." And I was like, "do you know how ridiculous that sounds to most people?" Yeah. So, but I believe it. I believe it for you. I believe it's possible for you. And I believe any of our clients could do it if they just. Take action and implement. And in order to do that, they've got to trust us. And I appreciate you putting your faith in us and trusting us and just putting your head down and doing the work. 

[00:24:41] So what would you say to other property managers that are maybe like the company that you bought or maybe like the way you were before if they've just been watching DoorGrow on the sidelines and they think they know what we're about and they think we're just marketers or something that like have a decent sales pitch, but they don't know if they can trust us? You're behind the paywall. What would you say to them? 

[00:25:04] Jeff: Well, I mean, besides being behind the paywall and doing it and having experience with it, I know coaching and I know that space, and so I recognized DoorGrow immediately from watching your marketing and just digging in a little that you guys taught the business. It wasn't a marketing ploy to get people to sign up to you. Actually, it wasn't like I was just going to get a bunch of motivation, "go out there and do it!" right, right. Because I motivated it was, like I said, it was the whys and the hows and and the all the processes and systems. And so man, it's all there for you to just do it. You would just do it. You would literally just go, "okay, I'll start at one and work to 10." I had a management company already. If I had to redo it all when I got real life processes and systems, and then I saw that there was people in it that had a hundred doors, 500 doors, a thousand doors, and I'm like, "that's what I need." I need to be surrounded by people that are at a higher level of success and have been where I am and now are where I want to go. And so if you are watching and you have management already and you are struggling, and it sucks. Whether it's for you or your customers, or both?  I have 420 doors and I have more peace of mind, more direction and I know where I'm going to be and where I'm going and how to get there. And more time to myself if I wanted to take it. I don't take it because I still have big goals and so I'm working a lot. But then I did with 150 doors. That's awesome. I had more certainty with 3x almost than I did where I started. I got the team in place. I watched them problem solve all day long on the chat and working systems and the processes and everything happens the same over and over again. 

[00:27:01] So it's really a business in a box, but you have to do it. You can't question yourself. You can't make excuses. You just have to do it. It'll be really easy if you just one foot in front of the other and take the steps. It's all there. And I had to stop because I can't wrap my mind around everything until I get to another place. Right. Yeah. Like I can only do so much and it's growing and working and so like, I've got to pause and then I'm going to dive back in and I don't know I'm still in DoorGrow obviously regularly. 

[00:27:34] Jason: Well, let's do some co coaching live on air. Let's figure out what's your next step? Ready? Okay. Yeah. You open? Okay, cool. So you're at 420 units right now. Yeah. Yeah. You've finally got a good team, you've got good culture. Yeah. So the next level to get to, you know, to break past that next kind of major barrier, which maybe is 600 doors, you have to have a great team, but you got to get three major systems installed. Those three major systems are going to be, you have to really get a good process system installed. Not just process documentation, but a system to where they're running the processes each time. So we've got DoorGrow flow. You can use that, lead simple, process street, something, but you need a good process system. That's one piece. The other piece you need is you need a really good people system. So you've started to create the culture, you've started to install that system. Then we want to make sure-- and did you use DoorGrow hiring and do grow ATS and work with Sarah on some of that stuff? 

[00:28:32] Jeff: I watched the coaching and implemented some of the things I learned just like I did with Clint. So yeah. 

[00:28:38] Jason: So we want to make sure we have a solid system so that as you scale, you can get the right people and get those people quickly. So it sounds like you've done some work on that. And then we want to make sure you have a really good planning system. So once you have a team of people you trust to execute, your executive team, then we want to install a planning system. Now these three systems should not be run by you because as a visionary and an entrepreneur, it's not fun for you to do this. So the key person, the most important hire you will have on the team will be an operator. Somebody that runs the operations. Do you feel like you have that key person right now?

[00:29:15] Jeff: I do, but she is one of the people I brought on the most valuable hire I've made after I came to DoorGrow. And it was to have that operator, but she's a CFO. Okay. And she's grown another insurance company to probably where we're at now from scratch, which, you know, I think I'm blowing her mind a little on where we want to go, how fast we're going. But yeah, my goal is to make her the operator. She's the CFO. And so you know management's an accounting business, really at the end of the day, and so we are doing so many changes to our software and our accounting to make sure that all those processes and automations are in place that she is buried every day, but she helps with the team. She helped on the hiring. And she's going to be the operator to try to shorten that. We're working her into that role because as she figures pieces out, we hand them off. So it frees her time up and she's not doing the 15- $20 an hour work because they're paying her more than that. Handing it off and it's freeing up her time and she's. Then we're putting in place some of that more operation stuff, so in process. 

[00:30:23] Jason: Nice. Yeah. Cool. Awesome. So when she's ready, one of the things we'll want to do is start to get her to show up on the Friday coaching call, which is operations, and to do that super system breakout and work with her and you to get DoorGrow OS installed. Once you get DoorGrow OS installed, the planning system is that next level system. This is going to allow you to have your team start to function like a visionary, like the entrepreneur, they're going to start to innovate and move goals forward without you having to, you know, push them. And she will run that system. She'll run the meetings, and then you'll be able to set goals and break them down from quarterly to monthly to weekly commitments, and you'll start to see the momentum build big time when the team are all visible and can be seen and there's accountability and they get recognized because you have that system installed, performance sometimes goes up. When I first install a system like that, we grew 300% in a year. And so that is kind of the next level I think for you guys is when she's ready for that, we start to get DoorGrow OS installed and get that planning system and cadence. Because cadence in a business is the communication, cadence is the culture, cadence creates all of this, and it gets everyone rowing the boat in the same direction. So instead of you saying, "Hey, let's do this to everybody, watch this video at DoorGrow," et cetera. They will start to innovate and move outcomes forward because they're given goals and deadlines and then support instead of tasks. And that's where you'll start to see your team really perform. This is where you get like three times the output from your team members. This is where your operational costs drop significantly in relation to the number of people you have per door. And so that's what I see next level for you guys. And once you have that system installed, 600 doors is going to be a piece of cake.

[00:32:17] Jeff: Yeah. The other thing too is that I know we need a sales funnel. The funnel right now is this mouth, that's it right now. 

[00:32:27] Jason: We got to get you out of that. So what'll be next is either we get you, if you don't have this already, we get you an assistant, a setter, or a sales assistant. And that person will then help you double your capacity currently. because they'll be doing all of the follow up, getting you on calls to close and you can use tactics like the double barrel close and some of these things we talk about. That's maybe, that's like level one, baby step. Level two, we just get you out of doing that all together. We get you a full-time BDM. Just like James Wachob 's team installed Brad, he's been showing up to each of our Wednesday calls where we support the BDMs or the people working on growth and I think he's helped him add like 250, something like that. They've added 400 doors organically in less than a year.

[00:33:18] Jeff: Is that Brian Bouler guy? 

[00:33:20] Jason: Yeah, Brian Bouler's their operator. And he's, he actually just, yeah, he's a stud. He just became the director of the property management. So he's running all property management and he just hired an operator to replace himself from a Fortune 50 company. Right? So this is like once you have your operator fully functioning as an operator, you get her out of CFO role and you get her into being an operator, then we can start to install DoorGrow OS, get that team to the next level. And part of that plan, I think for your 90 days would be to start to focus on that sales side. If you're ready to ramp up lead gen and growth, then we get you maybe a setter initially, and then we get you a full-time BDM or you can jump straight to getting a BDM and we help you find somebody that can just crush it at sales. We identify the right personality type, they're great at this, and they will go out and just make it rain and create business for you. 

[00:34:13] Jeff: I got the hiccups all of a sudden, so I'm like, this is going to look great in the podcast. 

[00:34:17] Jason: You're just so excited about the future. Excited. Yeah. And you know, and that BDM could also, and then I think what you would do, if you want to focus on the growth side, if that's still fun for you, you just go out and find more acquisition deals. Yeah. Yeah. Yeah, that's fine. You can even get your BDM to start hunting for acquisition deals as well and feed them to you, and then you do double barrel close that way. They're feeding you to close it. Right? So, anyway, I think that's going to be the next level for you and, you know, maybe what I would maybe have your CFO do is do a time study and maybe you do a time study if you haven't done one for a while, so that you can see where can you support her even more and more quickly to get things off of her plate. What are you doing? Which things do you love the most? Which things don't you? And start to take some things off of her plate and give them to other team members as quick as possible. So, and then you'll know like, this is what she spent her time doing over the last two weeks. You're like, cool, we, these are minus signs. These are things that are lower level dollar an hour work. Let's define these processes and we make that a goal and all that. When you have a cadence and a planning system, you can plug all that into your goals. Like one of your quarterly goals would be transition CFO to operator, for example. Yeah. So we could start to build out those systems even right now with her, we just need to get you and her on board with that. And then you'll see things start to go even faster because you're already working a plan. When we put the plan in a way that everyone else can see it and everyone can contribute, the whole business starts to go faster. Otherwise, it's you pushing her and her pushing everybody else, and it's very top down. When you create a bottom up system, you'll start to feel a lot of momentum. Okay. It's a weird feeling when you start to feel the team pulling you forward instead of you pushing them forward. 

[00:36:10] Jeff: So, when you say that, what does that, what do you call that then? Like when you're saying bottom up, you know? When you, everything you just said, like, what is that? Like, what do I call that? 

[00:36:21] Jason: So I call that the planning system or DoorGrow OS, the operating system. The operating. So we want to get this operating system installed so that there's this planning cadence and communication. So I'd start with by doing a six core functions assessment with your team brainstorming session. That'll be quarterly planning and it'll take like an hour and a half or two hours. First time you do this as a team. 

[00:36:44] Jeff: That's all in os. That whole process is an OS. The step-by-step on that. That was my direction. I need OS, and I need Flow, and I'm like, oh, another thing I got to plan. 

[00:36:53] Jason: Yeah that's DoorGrow OS. The planning system. What's cool about it and, if you do the math on this, right? Let's say you do in your annual planning, you spend maybe an hour, a half. Your quarterly planning, you do four times a year. You spend maybe an hour, a half, two hours, right? Each of your monthly planning meetings, which you have 12, that adds up to 12 hours, maybe an hour each, right? Then you're doing your weekly commitments meetings every week. Maybe you'll do about 50 of those a year. Maybe those take an hour, sometimes even just 30 minutes, depending on the size of your team and the aggressiveness of your goals. And the goal on a weekly basis is to hit 80% of your weekly commitments. That's a lot of goals getting achieved. This is outside of the tactical work, outside of the day-to-day work. This is innovating and moving the business forward towards your core functions and what the business needs most and what you need most.

[00:37:49] If you stack and add all this up, maybe even add a culture meeting here or there, and you add your daily huddles with your teams that are like maybe 15, 20 minutes, all that combined adds up to, you can run the entire business on 300 hours a year, and it eliminates a massive amount of 'got a minute?'s, sneaker net communication, interruptions, and it makes the business far more efficient. 

[00:38:14] Jeff: And that's all lined out in OS. Like I start OS, it's like everything step by step. I can do this. How? 

[00:38:22] Jason: Yes. However, my disclaimer is, this is not stuff that you're going to want to do. This is stuff that your operator will probably enjoy doing. Okay, but not you. Okay. Like me, I hear a bunch of meetings. My initial gut reaction is like, "oh gosh, shoot me now." Right? Yeah. Like that sounds like a cumbersome and a waste of my time. It actually speeds you up and speeds up the business and gives you more time, but you don't want to run it. You need somebody else to run it because otherwise you end up as the emperor with no clothes because everybody's going to agree to you, say "whatever Jeff says," you need somebody else to run it. And you're last to speak in all these meetings. Yeah. Then you'll start to see the magic and the genius of your team. because some of them are more closely connected to some of the things that need to shift or move or be innovated or move forward than you are, right? Your maintenance coordinator can see what's going on in maintenance and they probably have ideas. And so this will allow them to start to, you know, bubble up some of these ideas and it'll allow them to innovate. When team members don't get deadlines and outcomes that they're given to achieve. And then they can see that there's need for improvement, instead of innovating, they go and try and spend more of your money. Yeah, exactly. And so the team gets more expensive. And then you, if you give them a blank check, they'll just spend like, "let's go buy this new thing and let's buy that. And that might do this," right? When you give your team a deadline and some constraints and an outcome, they will start to get creative and innovate, and you want your team members to start to think like that. That turns them into intrapreneurs. So getting this system installed, I think will be the big next level thing, and we can start getting that installed right away so Sarah can help you get that set up. And set up a call with you and your operator and you're already working on some goals. So let's just get those goals into a system where everyone can see and make sure you start to move the plan forward, create the plan, work the plan, and you'll start to see the team move forward way faster.

[00:40:16] So I'm excited for you man. 

[00:40:19] Jeff: Can you believe I got the hiccups? I get hiccups like once every 10 years. I get in the middle of the podcast. Yeah, I'm very excited about that because here's the truth is you're right, like you get to this place at, you know, 150 doors on my own right, that's capacity really no capacity would've been much higher. But doing it well, capacity was 150 doors. Now I'm at 400 something and we're going, well, yeah. I think I could add another a hundred doors before anything breaks, but I know we're there. We're 50 to a hundred doors away from having to do new stuff again. Yeah. I can feel it. And so that's exciting, but dreadful to think, to have to implement myself.

[00:40:59] I think that's why I've kind of like, "let's just wait till we get everything we're doing dialed it perfectly before I get into that," but I need to just suck it up. I got to call with Sarah coming up the next couple days and I just need to tell her, okay, let's do OS, whatever. Tell me what to do next. Let's go.

[00:41:14] Jason: Yeah. And really we're just going to start working on creating a plan. Then we'll put in the software and you'll start to see when you start having these weekly meetings with your team, you're going to start to see stuff move forward. Like our goal, we sometimes have like 40 things in a single week that we're working on as a team outside of our daily work, like 40 tasks that are assigned to different team members.

[00:41:38] And my team members do not want to show up with a red 'no.' Yeah. And this increases their performance level, like you would not believe. They want green yeses when they show up on Monday for our weekly commitments meeting. And that means we are really likely to get all of our 30 day goals done, which means we're really likely to get all of our quarterly goals done because they're all connected.

[00:41:59] Yeah. You'll start to see your business move forward really quickly. This is a next level thing. So I'm excited for you to get that installed. because first, you got to have an operator. because I've tried to do it on my own without an operator and I really, I get lazy because I just don't like it. Like, I don't like running the meetings. I'm like, "all right, anyone's stuck on anything? Let's move forward faster." And I just skip steps and I tell people, do things, but when the team starts to run this, your operator will start to run the business. The business will start to run itself. Things will start to move forward without you, and then instead of you feeling like you're the entrepreneur pulling your entire team up the hill in a wagon, which is what it feels like until you get a system like this, you're going to start to see them moving forward ahead of you, and you're going to be the one that is in the wagon and they're pulling you up the hill. You're just going to be there like giving some feedback, coaching them, supporting them, but you'll start to see the business move forward. I'm the biggest constraint on my team. Sarah and the team are using DoorGrow OS, and they're moving the whole business forward constantly. And they're like, "Jason, keep up. We need more from you." And so they're keeping me accountable now. I don't need to keep them accountable because I've got A players and I've got a system that brings that out in them. So that's the next level. Cool, man. Awesome. Well, hey, thanks for coming on the podcast and being vulnerable and sharing some of your struggles and your wins.

[00:43:23] Really appreciate you as a client. 

[00:43:25] Jeff: Yeah. Appreciate you too, man. It's been a huge life changer. So cool. Well, keep pushing me. 

[00:43:32] Jason: Yeah, we'll keep going. We'll get you to that next level as well. So, thousand doors, here we come! 

[00:43:37] Jeff: Here we come. All right. 

[00:43:39] Jason: All right, thanks. See you. All right, so if you are a property management entrepreneur and you're wanting to get some coaching, you're tired of not having anyone in your corner, maybe nobody's believing in you, maybe not even your spouse is believing in you right now, and you need some hope, you want to have some results like Jeff, you're wanting to move your business forward. We would love to coach and help and support you. Join our mastermind. You can check us out at doorgrow.com. If you're looking like to get nurtured and warmed up a little bit more and you're not really sure about those DoorGrow people, then go to doorgrowclub.com. Join our free Facebook group. We give out better free stuff than most coaches in this industry give out that's paid, and you're going to get access to our master classes and some really cool stuff in there. Join that and you're going to see that we care and we want to see you succeed. And that will hopefully be a nice pathway into you becoming a client and working with DoorGrow and taking your business to that next level. And finally getting what you deserve, getting paid what you deserve, and having the business that you dream of having.

[00:44:47] Until next time everybody, to our mutual growth. Bye everyone. 

[00:44:51] Jason Hull: 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! 

[00:45:18] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Aug 1, 2023

Even though a vacancy can be painful for an investor, leasing doesn’t have to be the biggest hat a property manager has to wear.

Join property management growth expert Jason Hull to talk about the topic of the property management Summer busy season with Tim and Larry from Tenant Turner. 

You’ll Learn

[02:55] When is the right time to automate?

[07:52] Why being cheap leads to bad clients

[14:34] Staying competitive in the slow season

[18:04] The multifamily market oversupply

[22:13] Lockboxes and self-showings

Tweetables

“The most important currency related to growth is not cash, it's focus.”

“It's really stupid, in contrast, to hold onto the moldy peanuts in the monkey trap because you don't want to let go and not get your hand out because you just want to be cheap.”

“I find that cheap business owners attract cheap clients and they don't grow and scale their businesses.”

“Even if you only have, you know, one door, eight doors, 10 doors, any vacancy is painful.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: I find that cheap business owners attract cheap clients and they don't grow and scale their businesses. And so if you're listening to this and you're like, "well, I'm being cheap and I'm being frugal, and that's smart." It's not smart when it comes to business, and it's not smart when it comes to growth. 

[00:00:17] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you are open to doing things a bit differently then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate, think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management 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, along with Sarah Hull, the COO of DoorGrow. Now let's get into the show, and our guests today are Tim Wallace and Larry Hancock of Tenant Turner. Welcome you two. 

[00:01:27] Tim: Thanks for having us. 

[00:01:28] Larry: Yeah, thanks for having us. 

[00:01:29] Jason: So does everybody there have red hair now? Is this the thing?

[00:01:32] Tim: We're slowly taking over the world. 

[00:01:34] Larry: Like it's just-- gingers unite-- job application requirement.

[00:01:37] Jason: That sounds like a really good t-shirt. 

[00:01:40] Sarah: I like it. Yeah. "Are you willing to dye your hair?"

[00:01:43] Jason: That'd be the strangest thing. Yeah. "It's part of the, it's part of the uniform." All right. Awesome. Well, it's good to have you both and you know, we really appreciate you being a sponsor for our DoorGrow events and doing some cool stuff with us. And Tim, you actually sold Sarah Tenant Turner previously. Oh, Larry did. Larry sold Sarah Tenant Turner. Yeah. You can't have the credit, Tim. Sorry. It's Larry. Larry did this. He closed the deal in Sarah's property management business that she's since sold, but they're still using Tenant Turner. 

[00:02:17] Sarah: They do use tenant turner.

[00:02:19] Jason: There you go. So awesome. So our topic today is scaling up your leasing process during the busy season, which is right now, right? It's summer, things heat up. And what's interesting, if you do go onto Google Trends, trends.google.com and look at the keyword "property management" and you backdate it for like a decade and you'll see these, it just spikes. It doesn't go up like it's not growing in search volume, but property management spikes every summer and goes down in the winter. And that's probably how leasing works as well in property management. So what, where should we start with scaling up your leasing process during the busy season?

[00:02:59] Larry: So what's interesting is it's almost like a catch 22 for our customers. So for folks that aren't using any kind of automation, they're like, "I really need your services, but I'm just too darn busy to even consider it." I'm like, "ah! Why didn't you talk to us just a few months earlier?" And then you got the opposite side where some customers are like, "I'm not busy enough to consider your services." so we're always trying to, you know, have these conversation with these people why automation's beneficial for them. Whether they're in a stage where they're just, you know, drinking from a fire hydrant and they're just trying to just figure things out while they're in the busy leasing season. Or maybe you are using automation and it's just a matter of creating efficiencies. So that way you can continually grow your business. So, typically that's how we'll start our conversation is kind of where are you at right now? Are you kind of just struggling to stay afloat and you need to add some automation into your life, or do you have the automation and it's just creating those efficiencies in your business?

[00:03:53] Jason: So how do you help people that say they're not busy enough justify leveraging and getting tenure turner? 

[00:04:02] Larry: Yeah. So from there it's really. Trying to get them more in the head space of like, "I understand that for now. But let's figure out how we can create value here." So maybe I'm getting them in a place of, you know, let's build the building blocks. "We're not going to create your account just yet, but in a perfect world, when you are busy and need our services, let's kind of back out what the steps are to get there." Sometimes maybe their portfolio isn't large enough. So then that would be a time when I would recommend to someone like you, Jason, where it's like, "Hey, you need to be a part of a program where you can, you know, grow your portfolio because he's going to help you grow your portfolio and then you're going to need us because you're only one person." so I'll try to get them in that kind of head space. But it's really almost building their tech stack. So while we're an important piece to that whole thing there's other moving parts to the entire system. So that's usually how I start. It's really more playing a consolidative role.

[00:04:55] So I'm trying to consult them, figure out where they're at in the process. And if they're not a good fit for us that day, that's okay. Maybe they will be. And then I'm going to set a reminder to reach out before they're busy losing season basically. 

[00:05:07] Jason: So where is that kind of cutoff point to where they've achieved, you know, Tenant Turner readiness status?

[00:05:17] Larry: So sometimes people will view it from like a portfolio size. I think it's really more about the entrepreneurial mindset. I met some people where they have just one door and they're like, "Hey Larry, I'm going to be a hundred units by the end of the year." I'm like, "that's awesome man. You know, it's great you're kind of trying to build this plane before you're trying to take off," where sometimes I talk to customers, they're like, "Hey, We're flying this plane. The wings are about to fall off. And I just don't know what to do." I'm like, "okay--"

[00:05:42] Jason: I'm going to build it in the air. I'm working on it. 

[00:05:45] Larry: I know. It's like, "all right, well I appreciate you, you know, diving ahead first, but you're probably really stressed out right now." So, typically in our world, our pricing model, month to month, no contracts. So one to 50 units you're fine. We're going to talk to you. We're not going to be like, "oh you're too small for us, man. Like, I just can't talk to you." We have a great culture in that way. We try to be that partner with them. But typically our general rule of thumb is if you expect to have any vacancy, whether it's one throughout the entire year, you should at least consider us. Even if it's only one month out of the entire year we'll still talk to you. 

[00:06:16] Jason: Yeah. 

[00:06:17] Sarah: Yeah. And I think something that people don't always realize is even if you're like, I don't need it right now, I'm not ready, I don't have enough. It's going to make it so much easier if you have systems in place already, so that you can scale so that when you scale, you're not now in massive amounts of pain. And even if you only have, you know, one door, eight doors, 10 doors, any vacancy is painful. Yeah, any vacancy is painful and it's going to help you massively, not only just in your time and your effort, but it will make your clients happier. Like when I implemented Tenant Turner, my vacancy rate like took a nosedive. Now, not that I had a high vacancy rate. But like just trying to like market and figure out where to put these things and answering all the messages and doing a gazillion showings for people that might not even qualify. You know, it was taking sometimes like weeks to fill a vacancy. And when I implemented that, it went down dramatically. So clients are much, much happier and you and your staff are going to be much, much happier because now it's a lot less work for you. 

[00:07:28] Larry: Yeah and kind of building on that, Sarah, we kind of find our solution is almost like a an aspirin approach. So people are kind of taking that aspirin when they have a headache in the form of vacancy. And there is a time and place to pop the aspirin, but usually what's a lot better is kind of plan ahead of, "oh, I know I could have headaches during this time of the year, so I'm going to be a little bit more you know, I'm going to prepare, I'm going to be more proactive." where I see people have the right mindset in regards to software is usually what they'll do is they'll annualize the cost and then figure out how to generate enough ROI. So if I'm able to save. Five hours per week, you know, and I annual analyze the software in such a way I don't need to worry about it because I've looked at the 12 month period and I know I'm going to get my value that way. It's a little bit harder when you're trying to convince people when they're kind of penny pitching and it's like you're wasting all this time on that part and that time worrying about it, you just wasted where you could be attracting new owners. So the mindset really is kind of analyzing the software, but trying to build the ROI into that.

[00:08:31] Sarah: I have to say like I was hesitant for a while because I was like, "well, this is easy and like I have this streamlined process" and really, I said this to you. I was like, "I just don't spend that much time." I had 200 and like some odd units, like 260 I think at my highest. And when I was talking with you, I was like, "you know, I just don't spend that much time doing it. So is there a benefit to it? Yes, but how much time am I really going to save? Because I feel like it's already something that is simple for me." And even though I had this streamlined and I had processes to find and I maybe was spending a couple hours a week doing, you know, messaging and email and confirmations and stuff like that.

[00:09:14] I was still spending time doing it. When I implemented Tenant Turner, then I was like, "oh, I don't have anything to do." Like every once in a while I have to just pop in and you have to like manually approve somebody. And then once, like I updated my showing schedule once a week. So once a week I had to go in and update the showing schedule for the upcoming week, which took all of maybe four minutes. And other than that, I was just popping in and kind of like manually approving people. And I was spending, I went from maybe a few hours a week, which I still didn't think was a lot to minutes per week. And I was like, "oh wow. Okay. I see it now. I see it." But sometimes they think you have to experience it to see it. Because I was like, "I just don't know!" And I was really glad that I did it because it really like, it took so much. And sometimes when you make a change like that, then you realize how much work you are actually doing. Because we rationalize, we're like, "it's not that hard. It doesn't take me that long. Like I just send a couple emails," and then when you realize, "oh, I don't have to do any of that anymore." it was like mind blowing to me. I was like, "oh, like this literally takes me like 10 minutes a week and that's it." So all my leasing was done in 10 minutes. 

[00:10:33] Jason: I think that's one of my favorite ways to justify an expense is you have to look at the opportunity cost because if you're just looking, you're like, "okay, well it costs me this much money and if I do it myself, then it's free. But your time is the most valuable resource you have in a business-- not free-- and the most important currency related to growth is not cash. It's focus. And if your focus is diluted as a business owner away from what can generate more revenue, then the opportunity cost is huge in two to three hours you could be closing deals that are worth tens of thousands of dollars over that year. So it's really stupid in contrast to like hold onto the moldy peanuts in the monkey trap because you don't want to let go and not get your hand out because you just want to be cheap.

[00:11:22] And so I find that cheap business owners attract cheap clients and they don't grow and scale their businesses. And so if you're listening to this and you're like, "well, I'm being cheap and I'm being frugal, and that's smart." It's not smart when it comes to business, and it's not smart when it comes to growth. You need to let go of those moldy peanuts. There's bananas in reach and the farmer's going to come along and chop off your head. And this is why most businesses fail. Most businesses fail in the-- or they get stuck-- first year or the first five years. A lot fail and property management is tough. And I see, I see a lot. 

[00:11:55] Sarah: They get, they just get stuck and they're trapped. "I don't have more time. I can't do anything else. Like, I don't know what else I can do in making these little changes." Like I'm going to be honest with you, I like, I bought into the product and I still wasn't like, "ah, I think that's going to be amazing." I was like, "it'll help me." And it helped way more than I thought it was going to help me. I would say this is like 1. Was implementing a property management software and 2. Was implementing tenant Turner. Those are the two things that like made a massive shift in my business for me.

[00:12:28] Jason: Nice. 

[00:12:29] Sarah: And I almost wish I could have told myself like, "Hey, remember when you had 260 units and you were doing it all yourself? You should have been talking to Tenant Turner. 

[00:12:37] Jason: There was some guy that had mentioned these things to you.

[00:12:40] Sarah: I know!

[00:12:40] Jason: He's pretty smart. 

[00:12:41] Tim: I think even if you are in that cheap mindset, like at the end of the day, like vacancy is what's going to cost your owners the most money down the road too. Like one day on the market can cost them anywhere from what, 50 to $200 depending on what they're paying for their mortgage and everything. Like those costs add up and it's as property managers, it's your fiduciary duty to help them recoup that money. And if you're spending too much time on those types of things, even if you're focused on your business and spending time on that, you could still be losing that money by having those extra days on market without this type of system.

[00:13:11] Sarah: Absolutely, and I think the conversation that I have with people over and over again is you need to figure out what this particular task is worth in dollars. So if this is like a $10 an hour task, a $20 an hour task, Is it something that you, as a business owner need to be doing? Is your time worth more than 10 or $20 an hour? And if the answer to that question is yes, then you need to not be the one who's doing this. 

[00:13:35] Jason: Yeah. If a business owner, and a lot of business owners are the BDM, they are the business development manager. They are the person that's doing sales and generating revenue and growing the business. And if you do not as a business owner, have a full-time BDM.

[00:13:49] You have somebody focused on this and it's on your shoulders, then you're a shitty part-time salesperson. You're maybe investing, I find one, maybe two hours a day. That's like 10 hours a week focusing on growing the business. And so everything else other than that should be offloaded that you can everything else. Give up the leasing stuff as much as you can, give up the maintenance stuff as much as you can, like you need to be focused on generating revenue until you can offload that piece and focus. Otherwise, you're not going to grow. And if any business owner is listening to this in property management, if you haven't grown significantly over the last year or two or three, it's because you are doing the wrong things as a business owner in the business. Plain and simple, there's no way around that. So we chatted about justifying it for those that are already, they have lots of doors and they're, you know, how do we deal with making things scalable during the busy season? And then things really for leasing tend to really cool down in the winter months. And so what are you typically seeing with clients that come to you that are maybe at a 200 plus doors or it's obvious that you can serve them.

[00:15:02] Tim: I mean, even if you do have 200 doors sure, summertime's going to be the busiest, where generally speaking, you could have anywhere from what, five to 12% vacancy rates and whatnot with turnovers and whatnot. During the wintertime, there still might be one or two that hit every month. And what we're noticing with customers that size is that throughout the year we kind of keep things with that month to month rate really low for everyone.

[00:15:24] It's based on portfolio size for us. And so most people are keeping that active because even one listing, like you're saying, if you're working on one listing, spending two or three hours on that one listing, even getting to go back and forth with the messages, the emails and everything like that could still be costing you more than what your monthly rate for subscription might be. So a lot of people do keep us going year round and have the lock boxes and things like that in service for vendors and stuff that might need to come and go for properties as well. So, there's lots of different little solutions that we provide there too that kind of help keep the business flowing smoothly, but generally speaking, we're there when they need us and any spot in the road where if it's crazy or if it's just a little bit, we try to keep the system smooth all year for them. 

[00:16:10] Larry: I guess to add to that so typically when things are slow, usually people are saying, "I'm not getting enough leads." really what they mean is they're not getting enough leads from, you know, Zillow, Trulia, the big networks. And when they come to us and say, "Hey, what do I do? What can Tenant Turner provide?" That's usually when I tell them like, "you're really going to hunker down and how are you going to be different than your competition?" and that's also times when like, you know, "let's look at your website. You know, are you being an industry leader in your market?" So maybe they're not going to the Zillows, but when they search, or, you know, what is your web, your presence in your market? Automation's great and you definitely should automate, but then there's also times to be that personalized touch. So when things are slow, what aren't your competitors doing? If they're leaning really heavy where they can't talk to a person at all maybe you should go to what we call the 'take request model,' where we're automating things, we're pre-qualifying, and then we're setting, you know, a couple days and times. But before an appointment's approved, you get to talk to that lead. And really what you're doing, you're leveraging yourself. You introduce yourself, you say why you're great and you're market maybe some key differentiators. And then you schedule an appointment. And you do a couple things. What I like to say is you're doing what's called a vibes test just to make sure both of you are, you know, a good fit, rather to rent the property and that type of stuff. And also you're making sure they have a heartbeat. Making sure, you know, if you're using self-guided tours, it's another security layer to everything. Because at the end of the day, I'm a big fan of it's the, a book called Rework by the guys who created Basecamp. And the whole philosophy is that it's not that in a world where people saying, "I need more of this," whether it's "I need more leads" or "I need more tools," it's more utilizing the tools that you already have more efficiently. So when we look at things like lead flow, maybe it's not necessarily a top of the funnel problem, it's more of a bottom of the funnel conversion problem. And then when you use personalization to a lot of interesting ways, like I mentioned.

[00:18:04] Jason: So one of the things that I think is happening a bit throughout the US and I've had some podcast guests touch on this, is that in some markets-- and I've heard some some property managers anecdotally share this with me as well-- they're having a difficulty getting tenants because the inventory as a result of the pandemic just went up, skyrocketed. A lot of people are like, "Hey, let's build, let's create a bunch of investments." Now there's a surplus of inventory and that creates a scarcity of tenants, and so they're having to get a little bit more aggressive. What strategies Have you guys seen, or you know, because you're connected to a lot of people that are doing leasing, how are they becoming more attractive to tenants than their competition?

[00:18:48] Tim: You want to start or? So there's a lot of different things out there, like different solutions, whether it's providing something like a benefits package to your residents, things like that really making your listings stand out. If it's better photography, if it's better marketing in general for stuff. But generally speaking, we are kind of seeing that trend as well, where days on market are expanding a little bit. It's kind of a trend that's-- we were kind of in a goldlock zone for the last couple of years with rentals. Like it's been amazing and pre covid it wasn't ever really like that either. Like that we're kind of seeing the ebbs and flows of the market, and that's just natural in real estate. So, we're coming back to the time where people are like, kind of hunkering down and making sure that their properties are as good as they can be to really attract the best tenants for them. So while there might be a few extra days on market, there's a couple things you can do around there. Like Larry's saying, adding those personal touches in there. Setting up notifications so that as soon as someone gets to the property, you can still have that personal touch by making a phone call as soon as you can see they got into the property. Or if maybe some people are doing a few more in-person showings, if that's the case. Generally speaking, that's putting more time on the property as well, which, like we talked about, costs opportunity costs. 

[00:20:00] If you got the team to do that, and that's kind of their role as a leasing agent or whatnot, great. They can have that personal touch and then go a little bit further with them. But if you're also focused on self showings having that additional personal touch, some additional marketing on the property or whatnot, I can kind of help draw that process out a little bit sooner. And really with our system, it. We really try to provide as much immediacy as possible. So when someone sees a listing on a site like Zillow, for instance they're clicking request information. We're sending them an email right away that they have the opportunity to come into Tenant Turner and click a link and schedule a tour right away. If they're calling into us, they're not going to a voicemail. They're going to be sitting there waiting three days for someone to respond to. I know that's a trend of the industry. A lot of people have massively filled inbox inboxes that they just can't handle. So tenant leads never hear back from anyone because they kind of pick and choose. We're responding to every single one of those leads as they come in and making sure that immediacy is really driving that engagement. 

[00:20:59] So if we keep that engagement up for everyone the goal is that, generally speaking, that alone will really help drive. What's, I think there's a statistic out there? If you respond within five minutes, generally speaking, you're going to get 80% more acceptance in terms of a conversation. Yeah. There's that click or an actual phone call, things like that, like providing that immediacy is a massive, and it goes a long way for impressing tenant leads on the consumer side, but also in, in business. We all know B two B sales and even BDMs like calling their owners. As soon as you see a click on a website, you want to call them. So we want to keep that trend going on our side as well. 

[00:21:33] Jason: Yeah, this is the TikTok generation man. They have attention spans of like two minutes, you know, it's like really short. So I love these ideas. So pushing owners to improve the property I think is a great strategy. Increasing your availability and your responsiveness and that immediacy, quick, beat, slow for sure in business. Increasing the ease Tenent Turner helps with. And then making sure that you are able to be super responsive within the first five minutes. So yeah. Love it. All right, cool. What else should we chat about related to scaling up your process during the busy season? Did we miss anything? 

[00:22:12] Larry: We got it. I know typically the elephant in the room, so a lot of times, you know, self-guided tours is the golden child of, you know, why you should consider it and how it's helpful, whether it's busy or slow and this, that, and the other. But one of the things that we had is for people that aren't using it and it's like, "I would never consider that or I'm scared to use this or I can never get owner buy-in." And that's kind of always the elephant in the room. I know Tim, you have some very interesting data of, you know, while, you know, like anything in business there are inherent risks, but as business owners every day we are willing to kind of, you know, improve or, you know, try to tackle these risks. And there's usually a pot-- not all the time, but you know, a pot of gold can be waiting for you. So was there any data that you wanted to share, Tim? 

[00:22:56] Jason: Before we get into that, let's kill that objection real quick. because I hear this all the time too. So I say, "Hey, maybe you should be using Tenant Turner or something like this," and they say, "well, I don't want to do lock boxes." And my response is, "you don't have to." like, there's a lot of benefits besides that piece. In fact, there's plenty of benefits besides that piece. And so maybe you can address that real quick and then we can talk about is that even really a valid concern or not? And are there markets that are better for lockbox versus others? Some are like, "I can never do that in my market. I'll have squatters all over the place." you know, they're concerned. So let's address that, that elephant in the room. 

[00:23:34] Tim: Yeah. I mean, at the end of the day, you guys know your properties best. You're going to know which areas might have a high potential for negativity happening. Whether it's someone coming in and stealing wires, the horror stories of people stealing appliances and stuff like that. At the end of the day, if someone wants to do something bad, A lockbox or a keyless lock isn't necessarily going to stop someone in that scenario, right? We all know areas where people aren't afraid to break a window and get in, steal a refrigerator. Like the fact that a property isn't known to be vacant is a big enough red flag alone that most people that want to do something nefarious will go ahead and do it. But at the same time on our side of things, if we can block as many of those instances as possible with our abilities to kind of keep track of known scammers and squatters and things like that. We've got some stuff built into our system, but really at the end of the day, if someone wants to do something bad, it's going to happen. But generally speaking, most people that are doing showings, that type of scenario, if you're, you know, your area, if you're doing your own kind of awareness inspections periodically and you're on top of the property yourself, we barely hear of any instances of negativity happening with those scenarios. Like self showings, we can come up with the horror stories, but at the end of the day, in our experience, they are really few and far between and we're not having major issues, at least more than what you would on average. See, with any property that's being marketed, it's vacant. Like that's, it's going to happen. 

[00:24:56] Jason: And there's some serious advantages because, I would imagine the best defense, period, against all of those type of problems is just getting it leased out as quick as possible. Yep. It's decreasing vacancy, and so if a lockbox can help them get into it right away, get a showing right away, whatever, decreasing the vacancy time is probably your best, you know, defense. 

[00:25:18] Sarah: Yeah. The other thing I'll add to this too, is if there are people who are kind of scoping out the property and they notice, hey, like every Tuesday at six o'clock people come and then that's it. They're not going to come at Tuesday at six o'clock. They're going to come at other times. Yeah. So if we do have a lockbox on it, and now we don't really know, like when people are going to come because they're coming whenever is like convenient for them. So it might be earlier in the morning or in the afternoon or late at night. We don't know for sure. There's not so much predictability in the schedule. So I think that's something that would help as well is if there's someone who's " Hey, that house over there is vacant. Let's like check that out." But they consistently see people in and out of it, that is a little bit of a deterrent as well, because you never know, like, "Hey, if I go over there because I want to steal that refrigerator, am I walking into someone who's already there?

[00:26:14] Jason: Now you can not have a big old sign on the property out front that says, "Hey, this is vacant right now. Do you want to see this?" You know, but you can still market it online without like giving out the address until they're ready to do a showing probably. 

[00:26:29] Larry: Yeah, so there's some kind of tips and tricks that we've found. So one thing is not advertising it as a self-guided tour. If you're going to use verbiage in the marketing description, use contactless showing. Because that could mean virtual tours, it could mean other things. But really for us, I like to describe ourselves as a closed loop system. because usually leads are only interacting with our platform if they find out through your website or through a syndication site. So it makes it much more harder to shop for homes because they really don't know, you know, but if they inquire, then that's when the automation will engage. Some interesting things, you know, kind of like Sarah said, one thing deterrent is they see activity, but you know, we find that a lead isn't going to put a government Id answer some questions and go through this process. Why would they do that when they could just go to the front door? You could go to YouTube and learn how to pick a lock and under five minutes, and then no one's going to know I'm on the radar. It's so much easier to do that. Especially in the age of TikTok. I'm sure there's a TikTok, within two minutes or less you'll learn how to pick a lock or pop open a lockbox or something like that too.

[00:27:34] Sarah: Or break a window. 

[00:27:35] Larry: Or break a window. 

[00:27:37] Jason: Yeah, it's a little bit quicker probably. All right, cool. So, how can people get in touch with Tenant Turner and reach out to you guys? 

[00:27:48] Larry: Yeah, so obviously if they want to learn a little bit about our services, tenantturner.com. My name's Larry, larry@tenantturner.com. Feel free to email me directly. I kind of deem myself as a software nerd so you know, any questions about whether you use this or not, that's fine. You know, I'm always happy to share tips and tricks of how to automate your process, so that's kind of how you learn some more. 

[00:28:12] Tim: So Larry's on the sales side of things for tenant Turner. I'm on the marketing side too, so if you ever need any additional materials or data and statistics around the self showings, if you want to help market to your owners and whatnot, if you've already signed up with Tenant Turner, happy to kind of jump on that side of things. You can email me at tim@tenantturner.com.

[00:28:26] Jason: Awesome. I'm sure that's a big part of it is really if they understand how to sell it to their clients, then that's probably the biggest hurdle. Is just being able to confidently say, here's why this is a good idea and how it's going to benefit you and to sell them on it. So, awesome. Well it's been great having you both here on the show. We appreciate Tenant Turner. We get great feedback on tenant Turner from our clients, so we've always felt very confident pushing our clients towards you as one part of their growth strategy and and I hope you guys have an awesome week. 

[00:28:59] Larry: Thanks. You as well. We appreciate you guys and thanks for including us.

[00:29:02] Jason: All right. So if you are a property management entrepreneur that is wanting to grow your business, reach out to Tenant Turner and make sure you reach out to DoorGrow. We are really good at helping our clients scale if you feel like you need more doors to be able to afford Tenant Turner or to be able to justify tenant Turner. We're really good at helping people do that. Anything else we should add? I don't think so. Let's tell them to join our Facebook group. Join our Facebook group. 

[00:29:28] There you go. DoorGrow club.com. Join our Facebook group community. We have some free stuff in there. Until next time, to our mutual growth. Bye everyone. 

[00:29:37] Jason Hull: 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! 

[00:30:04] 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.

Jul 21, 2023

The property management industry has been moving more and more towards automating tasks and processes in the last decade. Property management tools and software have improved drastically and continue to improve every year.

In this episode, property management growth expert, Jason Hull sits down with Mo Hussein from Balanced Asset Solutions to talk about property management tools and systems.

You'll Learn...

[06:23] Why You DON’T Want Software that Does it All

[10:27] Implementing a New Tool or System

[20:40] The Cost of Hiring vs Implementing a New Software

[28:04] The Most Effective Accountability System for Your Team

Tweetables

“Try to evaluate software from a very objective type of lens. At the end of the day, it is just a tool.”

“You don't see an amazing handyman or you know, vendor or somebody that's going to do some work, show up with a, just a multi-tool. Like where's your toolbox?”

“There's no such thing as one product that's going to do everything extremely well.”

“The humbling experience every business owner needs to have is when they start to hire people that are better at the things they used to do that they've let go of.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: Initially when I was playing around with stuff in my own business, I was like, I need to find that multi-tool, and I think this is a mistake a lot of people make. I need to find this multi-tool that can do everything. That sounds like that would be the best thing, but it does it really badly, right? You don't see an amazing handyman or somebody that's going to do some work, show up with a, just a multi-tool. Like where's your toolbox? 

[00:00:23] Welcome DoorGrow hackers to the #DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and in life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management, business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder, and CEO of DoorGrow. Now let's get into the show. 

[00:01:24] So my guest today, I'm hanging out with Mo Hussein. Welcome Mo and what's the name of your business? 

[00:01:30] Mohammed: Hey Jason. Pleasure to be here. It's called Balanced Asset Solutions. 

[00:01:34] Jason: Balanced Asset Solutions. Awesome. So the topic Mo and I are going to be chatting about today is the Power of Innovative Software Solutions. But before we get into that, Mo, why don't you give everybody a little bit of background on yourself and how you've sort of connected yourself to property management? 

[00:01:50] Mohammed: Yeah, great, great question. So we are a CPA accounting and technology advisory firm that specifically just focuses on real estate. So we work with property managers, asset managers, fund managers. In implementing software leveraging software to be able to streamline their business and enabling them to be able to scale. Prior to starting this practice about six years ago I've actually worked for AppFolio and well before they were public as well as Yardi Systems. And what I saw in the market was you know, the software is a tool at the end of the day, and there's a lot of complexity that comes with these programs. The accounting nuances, how to properly implement it, get your accounting to work right, your numbers to show up correctly. And a lot of customers would call in asking for accounting and operational kind of advice. And being a software vendor, we're there to make sure that the product is technically working right, versus giving advice in the accounting and operations world. And so we started this practice about six years ago and we offer, you know, CPA and accounting services around the accounting that bookkeeping using these products and also kind of maximizing the ability to kind of streamline your business and wrapping your business processes around these programs.

[00:02:59] Jason: Cool. Awesome. So you worked for AppFolio, you worked for Yardi as well, correct? Correct. Okay. And in a tech capacity? 

[00:03:09] Mohammed: In a tech capacity, yeah. In sales and account management? Correct. 

[00:03:13] Jason: Okay. I come from a tech background as well, so. Great. I worked at HP and I worked at Verizon, and so we're both nerds. Talk nerdy to me, Mo! Let's go. So what are you noticing in the industry when it comes to software? And, you know, this is a challenge a lot of people are trying to figure out which one to pick when they're in the startup stage. And then what I also notice-- Some try to do it without it-- but what I also notice is that nobody ever seems totally happy with their software and they're always looking over the fence at their neighbor to try and figure out, what are you using? Is this better? And I get people switch more often than they probably should. And then they realize they're missing something else. So what do you work on with clients and what are you seeing? 

[00:04:00] Mohammed: Yeah. You know, great question and you know about like what, 15, 20 years ago, when we think about property management software and the industry as a whole, there weren't that many players. You had Yardi, this is before AppFolio time, 15, 20 years ago. Yeah. You had some very legacy players that worked with larger commercial operators like an MRI or Skyline. A lot of these on-premise pieces of software have now been kind of gobbled up by larger players or have transformed to be, you know, software as a service or web-based programs. And now, you know, over time now the ability to be able to build new software, the barrier to entry is much lower. You know, modern technology frameworks like using like single page apps and stuff like that are very ubiquitous. And you're seeing a lot of new entrants and players that are coming into the market. You know, players like Red Vine. That you're hearing of now. And then also there's this whole you know, offshoot or like a entire vertical that's been created now called PropTech. And now you have technology that's specific for screening and, you know, maintenance management, facilities management, investment management, and you have all these little products that are coming out. And so, you know, one thing that we always you know, implore on our customers is, you know, try to evaluate software from a very objective type of lens. At the end of the day, it is just a tool. And the effectiveness of that tool is in how you use it. Right? If you're using a hammer, you know, not in a conducive way, then it's not going to be an effective tool, right? And so there's a lot of buzz in the market that you hear now, especially with AI and generative ai. There's a lot of different tools that are in the market, but you know, the fundamentals of what you're looking to make the software do or hopefully achieve with the software, being able to streamline your rent collections and tenant communication, your vendor communication, you know, we always tell our customers, Hey, put together a checklist of what exactly the objectives are that you're looking to accomplish with this piece of software. Try to tie that to some business outcome. And that's kind of the driver of why you're looking at or evaluating the software and then put together a grading rubric and then, you know, find the software that is effective for your business needs. Don't give too much credence and how it looks or the aesthetics or what you're hearing from other folks. Definitely what you're hearing in the market will help kind of guide the software programs they to take a look at, but you know, we tend to see this as well, a lot of clients are kind of jumping around between different products and are not happy with one product or another. And usually it's an issue associated with kind of the implementation and kind of the adoption and enablement that they're giving to their employees with the product.

[00:06:22] Jason: So, going back to your tool analogy, I think my philosophy with software. Initially when I was playing around with stuff in my own business, I was like, I need to find that multi-tool, and I think this is a mistake a lot of people make. I need to find this multi-tool that can do everything. It's got the hammer, the screwdriver, the pliers, tweezers, knife, like everything in it. That sounds like that would be the best thing. I'll just find something, does everything, but it does it really badly, right? You don't see an amazing handyman or you know, vendor or somebody that's going to do some work, show up with a, just a multi-tool. Like where's your toolbox? "Oh, I've got this guy. This can do everything." Right? So my philosophy on software over time is definitely shifted to, I want my team members to have the best tools, and if those best tools can do some things really well, then I will find other tools to strap onto that or add into my toolbox. That also do their job really well, and I find I get a better result having the best tools, even if I'm spending more money, than having that multi-tool that can do a whole bunch of things. So what's your take on this? Are we in alignment or...? 

[00:07:34] Mohammed: Yeah. Yeah. Great question. And I completely agree. There's no such thing as one product that's going to do everything extremely well, right? There's going to be some pitfalls in one area that you have to sacrifice for another area. And so, you know, usually when clients are going through these evaluation kind of cycles of looking at software, what we suggest is, "Hey, you know, use this as an opportunity to also do some introspection. Understand what your standard operating procedures are, how you run your business, what is your accounting cycle look like? Who's involved? How does that process propagate throughout the organization? Same thing with you know, the leasing, the accounting operations when it comes to maintenance and document what that process kind of looks like, and then use that as kind of a guiding post of the functionality you're looking from the program," you know, versus going into the evaluation and looking at a bunch of different pieces of software. And usually when, you know, when clients realize like, "Hey, you know, we didn't realize that this program had a limitation in this aspect," they didn't approach it from a manner of understanding kind of what their processes are and then kind of demoing the software or looking at the programs from that lens, if that makes sense.

[00:08:40] Jason: Got it. So what size of companies and what companies typically are coming to you for help, and what do they need help with? 

[00:08:49] Mohammed: Great question. So we have a pretty broad range of clients. We have small mom and pop and customers with, you know, 10 or 15 doors on the residential side. And then we have clients, large asset fund managers that are, you know, grappling with 80,000 plus doors across the world. And so, we don't only focus on residential, commercial, office, industrial, manufactured housing, self storage. The only vertical we don't touch is senior housing, mainly because of hipaa, kind of healthcare requirements there. Ok, cool. Some of the problems that they do have, one is change management.

[00:09:21] Most of the clients we work with have, you know, CPAs in house, you know, they have staff implementing and properly adopting software is a herculean effort, especially as the organization grows larger and larger. You have your day-to-day responsibilities, challenges, organization, and cleanliness, you know, understanding kind of accounting and software. At the same time, you know, change management and project management and the orchestration of that is probably the biggest challenge that a lot of our clients have. And in general, we're all creatures of habit, right? So there's a significant opportunity that cost that comes with kind of managing and implementing a new solution and ushering a change, versus kind of focusing on growth and your portfolio and servicing your owners and your tenants.

[00:10:04] Jason: Now a lot of business owners will get excited about some new tech or some new software, some new thing they're going to throw into the business, and they go and throw this at their team, and then they get friction and resistance and adoption. Anyone that's ever been around tech or software knows that trying to get a team to use tech adoption is the number one challenge.

[00:10:25] You've already mentioned it twice, right? Adoption's a big challenge. So, What is the secret to adoption? And I find for me, there's a couple of factors, but I want to hear what you found really helps with the adoption happening and getting team buy-in and getting team members to actually use this stuff.

[00:10:46] Mohammed: Yeah. Great question. I did a radio show a couple months ago and kind of the three things that we see that are needed in order to have kind of. Effective adoption and enablement with software and just in general, just changes. One is executive sponsorship and so we see a lot of owners of property management, asset management firms, you know, they understand that there is a need for some of your product or, you know, they're doing a lot of pen and paper using a lot of Excel spreadsheets. They want to use some piece of software. However, they'll relegate or delegate that to the team that would also be using it. And so, And this team not only has to go through and do their kind of day-to-day activities, but now they also have to go through the process of evaluating different pieces of software or different software products. And they're giving kind of an artificial budget and the executive or the sponsor is not as involved. Kind of the evaluation process and not giving much weight to, you know, how significant of a change this will be at the end of the day. You know, implementing a new piece of software is very business disruptive. And so, you know, your employees are the folks that are kind of doing this evaluation, feel like they're on, kind of on their own little island and kind of going through this entire change and evaluation on their own. That's one is the kind of executive sponsorship. And usually when that executive sponsorship exists and the, you know, the owner and the executives in the business are actually involved during the evaluation cycle this also gives confidence to, you know, the the employees and the folks in your organization that you are serious about this.

[00:12:14] want to make sure that it is successful. I want to see it through. And it incentivizes, you know, extreme ownership. You know, folks want to do less manual work. We want to do less administrivia work, right? And so, and these software programs have that promise. So executive owner sponsorship extreme ownership. And then lastly, and probably most importantly is change management. And this is something that most organizations just struggle with in general. They're too focused and kind of, siloed into what they're trying to accomplish, that they're not looking at kind of the bigger picture and the impact that this change is impacting across the organization. And so that's why organizations and consultants like us kind of exist. And so executive sponsorship, extreme ownership and change management. 

[00:12:58] Jason: Yeah, entrepreneurs like to walk into a room, pull the pin on a grenade that they picked up at a conference. Throw it into the middle of their team and say, "here's our new thing we're doing! or "go do this thing!" and the team are like, what the hell? Like, we've got plenty of work already to be working on. We're not excited about this. This does not look fun to us. This is terrifying. You know, how am I going to manage my current work? And and they don't want to really own it. They, and they don't want to mess up because they know if they go out there, start researching software and they're usually not given the right criteria. Right. Like, they're like, how do we weight the criteria? because they probably are going to be conservative and think just in terms of budget. Whereas the business owner's probably like, I want the best. And, you know, there isn't really a good decision making guide related to this and which weighted factors and how they should consider it. Right. And so, You know, if anyone's ever seen a decision making matrix where you list out all the criteria, right? Like what's the speed of implementation, how disruptive will this be? How intuitive is the UI or the user interface for the software you know, can we pick it up pretty easily? So, How much training is going to be required? What's the cost, right? How long is it going to take to implement, right? And then you can weight all the software and figure out, all right, what's going to look like, what looks like the best one, but which of these criteria is the most important? Which one's the second most important? So there's a cool app I like to, I've used in the past called Best Decision on the iPhone.

[00:14:29] Okay. And you can put in all your criteria, you can put in your question, you can put in all your options, and it'll, you can put the weight on these and then it, you can go through and take it like a quiz and put in all your different options and each criteria. And then at the end it'll say, here's your best decision. So it's kind of cool. I don't know if it exists on Android, but I've used that in the past, but a lot of times people just don't have anything like that and nobody wants to manage the process of implementation. Right. Leaving that on the team shoulder generally doesn't work because they're going to just blame everyone else. There isn't extreme ownership. Right. Which is a great book by the way, right? And then the business owner. Is already delegated, so they're not really taking ownership. Yeah. I could see how that would be a huge mess. Yeah. 

[00:15:14] Mohammed: Yeah. It's also you know, implementing a software is it has its own nuances and complexities that come with it, right? There's companies that just focus on that. And quite honestly, if you're a business owner, property manager, you know, implementing software is not a distinctive differentiator to you from your competition, and so you should be taking on responsibilities and delegating internally for the things that actually make material impact and differentiate your business versus, you know, the accounting or implementing some piece of software, which is something that you and your competition peers have to do anyway.

[00:15:43] Jason: Yeah, I find that we have the best success. So DoorGrow has a suite of software as well in that PropTech category, I guess, and we find that the operator is the person that should be moving this forward and learning it and getting the team doing it. Not the business owner typically. Because the business owner likes the concept. They like the idea of the software, they like the vision of where we could get to and the results, but they don't want to do the work to implement it. They don't want to usually learn it fully. And the operator is usually more the personality type that geeks out on that stuff anyway, and would be happy to dig into it, learn it, get it dialed in. Get all the detail in the minutiae en entered into it. Especially when it comes to like process software. It's like we have this Visio like, or Lucidchart like flowchart software for building out workflows for process that you can build in forms and other stuff. But it's very visual and that makes it really intuitive and easy for teams to map out their processes and to know where they're at currently in a workflow if they're running a process.

[00:16:51] We find that's a whole level beyond what we used to experience before we had DoorGrow flow in like Process Street. Or some people use Lead Simple, or they use some of these more checklist based tools. You know, and my operator actually is unique. She's my wife, but she's a little unique that she doesn't like technology, like she thinks it's trying to get her. She's fighting with her computer all the time. She's like, what is this? And she asked me to come in. I'm the nerd in the company. And I'm like, oh, it's like this. She's like, okay. But she's like, "see!" Like technology's out to get me, you know? And so, but she likes using DoorGrow flow. Because it's visual and she can map. I'm like, what are you doing? It was the weekend. This weekend. I'm like, what are you doing? She's like, oh, I'm mapping out a process. I'm like, really? 

[00:17:36] Mohammed: Yeah, and this is a great example, Jason, that was already a process. You guys had documents, right? You're using the software to kind of map, you know, digitally the process that you've already kind of built. And so that's, and that's huge crux also with a lot of folks that are implementing these new products is that, you know, they don't have that process. They don't have SOPs, you know, they don't have controls within the organization and checks, especially when it comes to the accounting. And so they jump into this product and you know, They're, you know, they fail to have a process and that also tends to make the product just the enablement around it. Very finicky and, you know, there's a lack of adoption. And then, oh they find another shiny tool and product and that gets 'em excited. 

[00:18:15] Jason: Right. I think one thing that also really affects adoption is the timeline in a lot of people's minds is a lot shorter than reality. And I think my general rule for implementing something new in a business, whether it's building out one of DoorGrow's, growth engines, and adding this into your business is it's going to take minimum 90 days. And usually it's the first 30 days to just start to install or build this engine or to like get the software just set up. Maybe it's going to take a second month to now start to do the major changes and tweaks in it, and then the third month, usually it's just the little tweaks that give you 90% of the results. Like it's that last 10% of getting something dialed in that gives you 90% of the results. And sometimes the mistake our clients will make, like if they're just implementing a growth strategy, for example, is they will do some of the work during the first 30 days. Not fully build that engine, and then they try and dump a little fuel into it and they're like, this thing is leaky as hell and it's not getting any results and it's not working, and they didn't do the work to get it dialed in. And this happens in your sales process. This happens in just about anything. It's that last 10% of dialing in the little tweaks and the little changes that finally gets you to getting 90% of the benefit and the results. 

[00:19:40] Mohammed: Right. No, of course. And then there's also that notion of implementation fatigue, right? It's like the longer that kind of this implementation cycle kind of drags out kind of diminishing returns. 

[00:19:51] Jason: Oh, totally true. They just burnt out on it. And the business owners getting fed up and it's just because they didn't probably have a decent plan, but they're like, they're giving up. And then you hear, like I hear a ton of clients say, Hey, we really like property meld like this cool tool that really has helped us dial in our maintenance and speed things up. And then I hear some say we tried it for like the first month and it was a nightmare and we quit. And I'm like, really? Because I hear amazing feedback most of the time. They're like, oh yeah, it was awful. I'm like, okay, so. 

[00:20:25] Mohammed: Fail the plan or plan to fail. Right? 

[00:20:27] Jason: Yeah. So interesting. So, well, what else would you like to chat about the power of innovative software solutions that we haven't covered yet? 

[00:20:38] Mohammed: Yeah, so, you know, a lot of times when we're talking to clients or prospects that are implementing a new piece. One thing that I did want to kind of double click on is the the point that you mentioned about kind of the timeframe it takes to implement a new piece of software. It's also the toll and the investment, right? The time investment. You know, there's an opportunity cost between hiring experts to do something versus, you know, DIY or doing it yourself. And so I feel like there's also a chasm and kind of a gap between kind of ownership's understanding of just like, Hey, this new product is just data entry. I can use my VA or folks that I have in the Philippines, or you know, some of my other employees that just enter this data and then all of a sudden this product is going to be working well. Yeah. I'm curious when you're talking to clients and they're saying, Hey, you know, this piece of product didn't work well for us, do you usually kind of dig a little bit deeper? I'm usually try to ask a lot of follow up questions, quantify like where exactly things did not go right.

[00:21:34] And and I tend to get a lot of answers of, you know what, I don't know. That's a good question.

[00:21:37] Jason: So when things don't go well, it's usually excuses. They're like, well, we couldn't get vendors to use it, like if they're talking about Property Meld. But really like, did you tell them if they want to work with you, they have to use it? And did you sell them on the benefits of how it's going to collapse time for them? And they'll be able to just use their phone to do this and it'll make everything easier. Right. So I think one of the challenges is if you go into implementing a software, switching to a software, but you don't yet believe in it, then you're going to sabotage your results with it. And that means they're not fully sold on it. And I think when it comes to technology, First, the person that's the decision maker has to be sold on the technology. They have to believe in it if they're really going to move forward. Otherwise, they should not move forward with it. And then once they believe in it, they have to transfer that belief to their team. They have to convince the team to believe in it, because if they can't sell the team on doing it, but they're going to expect the team to implement it, it's going to be met with disastrous results. And I think that's our role as an entrepreneur. We have to continually be selling our team. On what we're doing, and then we can sell to potential clients on what our business is doing. But we have to always be selling our team. And the way that we do that internally, one of our software or one of our tech tools is a planning software called DoorGrow OS for Operations. One of the flaws or fundamental flaws I see in planning like with EOS or Traction or these sort of things is it's very top down. It's like I'm in charge and it over inflates the importance of the visionary in the accountability org chart. Like the visionary is like this amazing God who the only person who has all the ideas in the business. Which is really flawed thinking. If you have even a decent team, really flawed thinking, that means you're the emperor with no clothes. Everybody's like, yeah, you have the best ideas. Sure boss, you know, and you're missing out on a lot of good stuff. And then they, the below that person, they put the integrator and then below the integrator in the org chart, they put everyone else on the team, right? The rest of the executive team. This is so fundamentally flawed. I think it's ridiculous, but. It really inflates the importance of it inflates the ego of the visionary looking at this, well, yeah, I am pretty important. And then it over inflates the importance of the integrator, which really probably should be called an operator, but the integrator. And that's what the EOS company sells.

[00:24:09] They sell integrators. These are their coaches that help with the implementation of this flawed system. And it over inflates the importance of this integrator so they can sell integrators, right? I believe that's a very top-down system, and I think it's super important to have a bottom up planning system with your team to where the team you're getting their ideas first on each of the major areas of dysfunction or constraint in the business, and then the visionary is the last to speak.

[00:24:37] An operator is probably second to last to speak so that they don't mess everything up and temper it and become the emperor/empress with no clothes, where everybody's like, yeah what he said, I just want to keep my job and please this person. So what he or she said, right? So, so I think with I think it starts with having how you plan as a business and the planning and cadence is the communication system in the business. For effective communication and rolling out software or implementing new things, there needs to be a really solid plan, but the team need to be coming to these conclusions. The team needs to be saying, Hey, we could use a better software. And you can inject those ideas as a visionary, like, Hey, I did see this. There is a problem here. Let's brainstorm and the team come up with ideas. 

[00:25:23] The visionary might say, Hey, you're missing another idea. There's this that could do this. And the team might be like, oh, okay. Right. We should get that Property Meld software or whatever, right? So you got to get the team's buy-in. And I think that happens through really good planning, right? And a lot of teams, that's one of the most fundamental systems I think a business should have, is a really good planning system where they have annual goals broken down into 90 day, you know, quarterly goals, broken down into their 30 day or monthly goals, broken down into weekly commitments. And this is strategic stuff to move the business forward. So they have a strategic plan, not just their daily tactical work. And the challenge, most businesses, everything's tactical, and then the boss comes and throws some strategic grenade into the middle of the room and says, Hey, start doing this thing. And the team didn't plan this together. They didn't buy in into this, they didn't see the problem together, and they didn't brainstorm together. And so there's no buy-in and it's very top-down. I think that's where the mistakes really start to happen, so. 

[00:26:22] Mohammed: You hit the nail on the head there, Jason. It's it's funny you know, that even the way that software today is evaluated has changed also. Right? You know, traditionally, you know, a couple decades ago when you had a lot of on-premise type of software like Cap X, software investments versus, you know, SAAS subscriptions where you're actually paying a monthly maintenance fee, right?

[00:26:41] Jason: You had to have a server and then you had to have a tech guy maintaining the server and there was some nerd that understood it and they had, like, you were like, you had to pay them whatever you had to pay them because this was, your whole business was running off this. 

[00:26:52] Mohammed: Yeah. Right. Now you can just get something off the shelf and get it implemented very quickly. But one key thing that I do want to highlight of what you said is that, you know, you need to elevate the voices of the folks that are closest to the problem. So it has to be kind of that bottom up type of grassroots type of investment and type of focus. Because those are the folks that have the most to gain from being able to solve for those problems. And they'll feel, you know, when there are a lot of initiatives or objectives that kind of come from top down. Similar to what you were saying kind of about the eos, is that folks see it as kind of a task that are being delegated to do this work versus, you know, being incentivized and taking ownership of like, Hey, you know what, this is my domain. This is going to make my life easier in x, y, and Z way. And you know, and then I think the goals are very important. 

[00:27:37] I'm sure you've heard of kind of smart goals specific, measurable, achievable, relevant, and time based. And putting that into, you know, weekly, 30 days, 90 days, and kind of, and going through that type of approach and kind of any type of endeavor or change or kind of trying to turn things around. Most of the clients that we speak with are just folks that we see that fail with when it comes to implementations. It's usually, you know, a lack of ownership and a lot of kind of top-down initiatives that are kind of broad, the organization and then, you know, kind of a lack of a, you know, sponsorship.

[00:28:04] Jason: Also, you know, there's some entrepreneurs listening to this right now. I guarantee it. It might be you, whoever's listening that are thinking, this is total bs this can't work because the, you know, doing something that's bottom up. Because fundamentally, even before having a really good planning system for the team and communication system, if you could do this and have it be bottom up, they're like, it has to be top down because my team are idiots. Like, they don't believe in their team. And that's because there's a lot of bosses that have built the wrong team, and it's because they're showing up as the wrong person already in the business, which means they're wearing hats right now. If you're listening and you're wearing hats right now that you do not enjoy, several hats you don't enjoy, maybe you don't enjoy sales or maybe you don't enjoy accounting or whatever it is, or the team members that do are doing these things, you are all always talking with them about how to do it, which means your org chart really just has you in parentheses, next to every person in the org chart, right? So that means that you are the wrong person. You're showing up doing the wrong things in the business, and you've built a team around the wrong person. It's like having a fake puzzle piece. Instead of the right puzzle piece. It's you, and then you build puzzle pieces all around that. And so now you have the wrong team. And so you have the wrong team if you are constantly frustrated in your mind saying, why won't my team just think for themselves? The problem is you. It's because you as a business owner, Are holding onto too many things and not letting go.

[00:29:37] And it's because you have built a team of people that you don't trust or you built a team of people that the business needed, but you didn't build the team that you needed in order to have more peace and more certainty and more freedom and fulfillment in your business. And so you built this monstrous business around the business and it's taken over like this armchair tyrant, this highchair tyrant. This highchair tyrant that's thrown food and saying, I want more. And you just keep giving it to the business and you should be in charge of this business. And that means that you should be setting really good culture. And that means you should be attracting team members and only hiring team members that believe what you believe in, share your views so that you can actually trust them. And so a lot of the reason why top-down systems are so necessary, even though they're bad ideas because they don't have a team they trust. So even going back before, like before technology, before planning, they need a team they actually trust, which means they need to be super clear on what their values are, their culture, and only hire based on that so that they can actually trust their team members. And if you hire good team members that you like culture-wise and they're the right personality fits for those roles when you weren't? They will be better at those things than you. 

[00:30:53] That's the humbling thing I want every entrepreneur to eventually experience, because it's pretty powerful because we think we're pretty hot stuff in the beginning. We start to build a team, they come to us with all their questions. We're like, man, I know everything. It's so good to be king. And then the humbling experience every business owner needs to have is when they start to hire people that are better at the things they used to do that they've let go of. And they know like they're exceeding your ability to perform in those areas. Like I used to design logos. My logo designers are better at designing logos than me. Right. As an example, and then you can really start to trust that team and you can trust them. Like my operator's a better operator than me.

[00:31:32] I was terrible at running the planning meetings. I just wanted to get them over with, I didn't want to do it right. And now she tells me," you're last to speak. Like don't talk." And I'm like, "okay." because she runs it, she's in charge and she makes it way better. And it's a lot faster than I would and more efficient than how I would do it.

[00:31:50] Mohammed: Yeah, think that creating that crux of dependency is definitely going to stifle growth and scalability, right? And so, it's interesting that you mentioned, a lot of listeners or folks that are probably listening to this, and we hear this as well, is that they don't trust their teams. There's some introspection and it needs to be done there. If you've hired the right people for the right roles. You know, there's there's this notion, you know, Google's considered one of the most like, you know, effective organizations in the world and when, and they do a lot of research on on team dynamics and they have this notion of of psychological safety, which is basically how folks under understand like the own you know, ramifications of being able to take risk within an organization. And so you need to enable your folks and have the right folks in the right roles and be okay with people that have failed, but you want them to be bold. This is what helps kind of move the organization forward and helps you evolve as a business and scale and grow and you know, creating that dependency crux or creating yourself and creating that friction where you are a bottleneck and how things move and change within the organization. It creates not only a challenging environment to be able to like actually grow and evolve, but then it also erodes morality within your staff as well. And eventually you'll push out the high performers. 

[00:33:01] Jason: Yeah, I think you know, A players love to be recognized and they love to be seen and B players love to hide and to not be noticed. Their secret goal is to make as much money as possible and do as little as possible. And A players, they don't just give you their time, they give you their discretionary time. Like they're thinking about you in the shower, they're thinking about your business and how to improve in their role when they're like on their walk, you know, on the weekend, right? Because they're believers and they want to win. And so I think a lot of entrepreneurs out there listening to this, they might be thinking, I need more KPIs. I need more micromanaging. I need more metrics. I need more profits, so I need to squeeze more blood from these team members. They're not giving enough, and that probably just means you have the wrong team.

[00:33:51] It's surprising how little KPIs and metrics and accountability is needed when you have A players on your team and you just build in a simple accountability system like DoorGrow os, or some sort of planning system in which they are working towards objectives instead of just being given transactional leadership where it's a transaction. "Do this task and I'll pay you, right?" Transformational leadership is where you give them an outcome and a timeline, like a deadline and say, by the end of the month we want to achieve this goal towards our quarterly goal, which is in two months, you know, or whatever. You can have these things defined and what happens is these team members start to function like intrapreneurs.

[00:34:31] They start to innovate, think, move things forward, and then implementing things like technology and software is just going to help them get towards these goals that they're working towards. It's not something preventing them from their day-to-day work. Instead, because if you don't, if they don't have strategic goals, they're just going to focus on the tactical work they have. And strategic growth in the business should be at priority over the daily tactical tasks. And if team members can see that and they have strategic goals, they're responsible for by the end of the month, they will focus on that and get their tactical work done. And the business then innovates and moves forward. And it's a really amazing, like beautiful thing to see happen. Well, this is a fun conversation. It sounds like there's a lot of people out there, I'm sure you've worked with quite a few that really could use some help understanding how to get their technology stuff dialed in, knowing what tools exist out there that can solve this you know, what can you help them with and how do people get in touch with you?

[00:35:35] Mohammed: Yeah, good question. So we offer a pretty wide range of services, whether it's, you know, tax help, bookkeeping, accounting, implementing software, custom reporting, creating SOPs, and even just auditing business processes. And then if you ever do get audited by the boogeyman, they call Department of Real Estate. We also do Dre representations as well. You can reach us at www.balancedassetsolutions.com. You're welcome to also email me directly at mo@balancedassetsolutions.com.

[00:36:05] Jason: Balanced asset solutions-- plural-- solutions.com. Yes. Okay, got it. All right. Cool. Mo, thanks for coming on the show.

[00:36:14] Appreciate you being with us. 

[00:36:15] Mohammed: Pleasure to be here. Thank you so much, Jason. Take care. 

[00:36:18] Jason: All right, so check out Mo and his business if you need some support. Coming to this conversation, I didn't even know what he did, so this was really interesting for me. My team sets up these interviews and sounds like a really cool thing to get that support and technology implementation. If any of you've gone through it, you know, this is a painful process, so make sure you get some help. So, for those of you watching the show, if any of these things resonated that you're struggling with your team, you're struggling with getting, you know, more profitability in your business, make sure to reach out to DoorGrow. We can help you do those things in addition to helping you add doors, but more importantly we can help you make your business scalable. A lot of you aren't adding doors right now because you know how, but because. You know, if you add more doors, your life personally will get worse as a business owner.

[00:37:10] And if that's the case, you do not yet have a scalable business. So you need a really good process system. You need a really good people system, and you need a really good planning system. And if you have those three things, you can, you're infinitely scalable. You can scale quickly, you can add any number of doors, and that freedom and that safety and that ability to just add doors and know that your business can handle the growth means you can now go even eat other companies, start to acquire businesses in the property management space, you can start buying up your neighbors. We want to help you do all of this stuff and scale. There's no reason why you can't be probably in the next two to five years, a thousand door business, crushing it and we can help you get there. We've got the roadmap, we've got the tools, we have some tech.

[00:38:00] We can help you move forward on this. So reach out to DoorGrow. Check us out at doorgrow.com. And if you're wanting to get into an awesome free community, you waste a little bit of time on Facebook, you might as well be wasting that time in a way that's not wasting time. Like go to DoorGrowClub.com and you can get access to our free Facebook group. It's for property management, business owners, entrepreneurs. Get access to our free Facebook group by going to DoorGrowClub.com. We have some cool tools and free gifts that you get. As you join the group, make sure to answer the questions and if you plug in your email address in your phone, we will reach out to you and give you some free stuff that's going to help you grow and improve your business. And you will have a resource in which you can ask questions to other property management entrepreneurs get some really good ideas and it's an awesome community. And it's growing rapidly, right? It's growing rapidly. So make sure you get into the DoorGrow Club. Go to DoorGrowClub.com and that's it for today. Until next time, to our mutual growth. Bye everyone. 

[00:39:01] Jason Hull: 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! 

[00:39:28] 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.

Jul 12, 2023

DoorGrow recently partnered with Rocket Station VAs, a company that goes above and beyond finding the right virtual assistant for your property management business.

Property management growth expert Jason Hull brings back Greg Brooks to talk about the new relationship between DoorGrow and Rocket Station and what’s next for hiring in the property management industry.

You'll Learn...

[01:45] Why an Operator is the Most Important Hire

[05:02] Rocket Station’s Unique Process Mapping and Training

[12:56] Why You Should Hire Virtual Assistants

[15:11] Vetting and Filtering Hiring Candidates

[21:25] The Kinds of Team Members PMs Need

Tweetables

“One of the big challenges that our clients have is they need operators. Like, this is the most important hire I think that any business will ever make.”

“Most businesses don't even have a decent operator.”

“A lot of the property managers out there, like if you wanted to map out your processes and systems and you were real operations-driven, you would've done it.”

“If you're listening to this and you are still doing a bunch of stuff and wearing a bunch of hats and you already have a team, you have probably built the wrong team.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: The challenge with operators is in the us, they're expensive. These operators are usually probably minimum, like maybe 80 grand, and sometimes they want equity, you know, like they're not affordable to a lot of these property managers that hit that wall at maybe about 150, maybe 200 doors. And so we were like, how can we solve this challenge? And then it was like, well, maybe one of these companies could take VAs and we could find the cream of the crop and find those that could be operators.

[00:00:29] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income.

[00:01:06] 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. 

[00:01:28] So returning to the show, I'm hanging out here with Greg Brooks of Rocket Station. Welcome back Greg. 

[00:01:35] Greg: Yeah. Thanks so much for having us. I'll just look and say the last invite to this was almost two months ago to the day, so we're becoming like a monthly regular. I like it.

[00:01:43] Jason: Cool. We'll just keep it going. So, we've been chatting and one of the big challenges that our clients have is they need operators. Like, this is the most important hire I think that any business will ever make in their business is to get some sort of person that can help them really get the operations going because a visionary CEO does not like dealing with operations. They're bad at it, and they try to do it, and they're always telling themselves, I need more processes and I need to do more stuff, and, and they're just not doing it. And so what we wanted to do is we had this crazy idea, maybe there'd be a company that could do operators, but do it in an affordable way. And the challenge with operators is in the us, they're expensive. These are people that are beyond the level of what you would normally pay for just a va or even an executive assistant, even if you hired them in the US. These operators are usually probably minimum, like maybe 80 grand, and sometimes they want equity, you know, like they're not affordable to a lot of these property managers that hit that wall at maybe about 150, maybe 200 doors. Maybe they're in 300 to 400 doors, somewhere in there. But they need this operator and they don't have it, and they are in the least profitable stage of their business they will probably ever be in some instances. Because they've maxed out on staff, they've got all these team members, they built the team incorrectly, and so they have a lot of people that are costing a bunch of money. And so we were like, how can we solve this challenge? And then it was like, well, maybe one of these companies could take VAs and we could find the cream of the crop and find those that could be operators. So that's, that's kind of the conversation I think we started to have. Does that sound right?

[00:03:31] Yeah, sounds, sounds accurate. 

[00:03:33] So what, what did we come up with? I don't want to do all the talking so. 

[00:03:37] Greg: You're good. No. So I think the part where we kind of bonded, if you will, between our companies is that that whole process implementation. A. Having someone that can kind of run point on that for you and streamline those processes systems, like that's a huge gap as you're trying to hire that operator, right? You got to find someone, find someone who's affordable and they got to come in and help with the process and systems. So it kind of blended perfectly with how we deliver our services. Because we have a whole team of professionals from the operational standpoint who, you know, help our clients, help our our property management clients go through that thought process and create those documents and create those processes and point out, Hey, why do you do it like this? Did you know your software can automate that? So it blended nicely in terms of that level of expertise. And then when you talk about the cream of the crop, I mean, Obviously, I'm very biased here, but I feel like our, our virtual assistants are the best in the business from the training and the experience and, yeah, really the comprehensive onboarding that we put them through to where DoorGrow members can help leverage our eight years of experience in this space to help with the systems, the processes, the refinement, and then we can put a rockstar VA in there who can jump right into the seat and really be that operator that they need at a much more affordable rate. So it just seemed like how you guys delivered and what you were teaching and the hires and kind of the steps that you, you know, teach to your students, regardless of what level they're at, really aligned with kind of our philosophy in terms of how to hire VAs and find great talent. And so I think we're going to knock it out of the park. 

[00:05:02] Jason: Yeah, there's a lot of synergy there. And you kind of breezed over it, but I want listeners, I want people listening to really recognize this, what's really unique that I found about Rocket Station-- and we actually just gave you a client as a Guinea pig. And he just commented in my group coaching call today, he was like, " they've been awesome already so far." Like he's really appreciating the process. I think what's really innovative or unique about what you do is your team will come in and actually start to map out processes in a flowchart, like you'll start to help them map out their processes. This is something that's so painful for them to do on their own. I hear it all the time. Like, "oh, well, I need to work on my processes." Cool, but why are you doing it? And they really, if they were the guy or gal to do it, they would've done it by now. Yeah, there's a reason why they have not done that. And so when you come in and start to do this with them, that's a game changer for them. And so I love that you do that. Not only that, but we have DoorGrow flow that we launched recently, which is a visual flow chart based software, so similar to like Lucidchart or Vizio or some of these tools. And so, on our last call that you did with our team where we were like sharing with our team what we were going to be doing, we're like, oh yeah, that's some other synergy, right?

[00:06:14] So, we are excited to start to get some of your VAs trained in to learn some of our systems, some of our software tools that we have for clients that I think are really new and innovative to the industry. There's, I don't know of any other visual flow chart software for processes in the industry like DoorGrow flow, and then your team members can help them to start to get these processes mapped out, documented, but even more so, we want to get this person supported in our program for those that are in our mastermind, in our super system and train this VA that is going to handle operations and be an operations assistant, help them figure out how to run the planning meetings, how to run the cadence for the team communication that meeting structure we call DoorGrow os how to handle some of the hiring pieces. And this allows a very affordable solution and it can all be done through Zoom calls, you know, as a team, which is how I run my company.

[00:07:12] And I think that it'll be a game changer for the industry because, One, there aren't operators out there that are really well trained. There aren't operators out there that already know some of these systems and different property management systems. Most businesses don't even have a decent operator. And so, one, to get these systems installed and two, to have somebody to do it, that it actually, the right personality fit, culture fit, and skill fit for that role, I think will be a game changer. So now you have your own vetting process. I think we talked about that a little bit on the previous call. Maybe you can share just a little bit for those that weren't on that or didn't listen to that podcast interview, like, what's kind of your process? How does that unique, and then I'd love to share how we're going to add to that with DoorGrow, another layer to that. 

[00:08:00] Greg: Yeah, definitely. And I know from our side, our team, when we announced this partnership, they were like literally salivating, right? They love the process. They see it as like a triple win. It's like you guys have very structured systems and very, you know, structured teaching, which is great because then when you take that and turn it into processes and act as that resource for the client it makes that synergy where we're, you know, we're speaking DoorGrow, right? And we can really be there you know, in line with their journey, regardless of if they're at, like I said, 20 doors, a hundred doors, 500 doors, wherever they're at. But then also like the software, like you said, our, I know our team has already started to mess around with flow and, and like they love it. So just being able to speak the same language. Every part of the journey is huge. And then, yeah, our vetting process it's basically six weeks of comprehensive screening. I know something that I think we talked about in the last podcast, or maybe it was in the conversation with some of your team members, we're big on, on kind of the three checkpoints, right?

[00:08:52] You got to have the experience, you got to be tested and vetted and evaluated based on your knowledge, based on your tactical and practical skills within property management, and then you've also got to be the right culture fit, right? You got to have the right personality to, you know, want to be that operator. Because like you said, a lot of the property managers out there, like if you wanted to map out your processes and systems and you were real operations driven, you would've done it. Like most property managers are visionaries and they've got big plans, and the day-to-day operations just isn't what they enjoy, and it isn't what, you know, gets them up out of bed every morning. So what we've done prior to any operator or really any position, right? We staff kind of across the board-- is it's six weeks of comprehensive screening, evaluation and property management specific training. And part of what our team's really excited about, that we're literally building as we speak is more DoorGrow specialized training so that, you know, we've got eight years of experience in the property management industry working with operators that are 25 doors.

[00:09:52] Two of our largest clients are over 40,000 doors. So like all the scale and the bottlenecks and the little learning points, like we've seen it, we've done it, we've staffed to it. But what we're excited about is to now really dive in to the DoorGrow platform, whether it's on the software side, whether it's on the process side, and really customize that training even further. So from day one that that VA gets into the seat, they're right there in the thick of it with the property manager to be able to really help and be that operator that assistant, that the business actually needs so they can start taking advantage and scaling quicker than their competitors.

[00:10:25] Jason: So we didn't talk about this on the previous interview, but our team got to see this. One of the things that really resonated positively about Rocket Station is you guys really are contribution focused and you really have a positive impact with the talent that you have in the Philippines and you're impacting, you know, things there in the Philippines. Can you just touch on some of the stuff that you do with schools and some of that kind of stuff just real quick? 

[00:10:49] Greg: Oh yeah, definitely. And cut me off. I get too long winded here. Usually we're talking business and talk and shop, and I don't get to brag on our people and what they do in country. It kind of comes down to how we even deliver the service to. There's a reason we go through the process mapping, right? Talent is everywhere. It's global. We now live in a global workforce. Most of the time, property managers aren't able to really leverage VAs the way we feel like they can. Mm-hmm. Simply cause like there's no process, there's no training, there's no onboarding, there's no ramp up, there's no screening process. So that same commitment to set a VA up for success in their business life. We do the same thing with kind of our-- we have a program called Rocket Station Cares, where we're very intentional about monthly doing events in local neighborhoods, in local communities, in the local islands. All of our people are in the Philippines, so a country of 7,000 islands where we give back.

[00:11:35] So I know you guys, what we kind of showed you a little video that that we had done where we had gone to a a school of 2200 students and we had donated not only our time, we did a whole day you know, volunteer effort where we played games with the kids and we we sang songs, but we also donated computers, printers. We donated over 500 tables and chairs to their classrooms because this school was a state funded school that was only supposed to ever house 800 kids. But the need there in that specific area, The population was almost 1500 that were at this school. So we're very intentional. We're like you guys. You know, we're a little bit bigger. We're about 2200 people all across the Philippines, but we're fully virtual as well. So like being intentional and realizing like, yeah, all of our people, they want great opportunity. They want a professional atmosphere, they want to work for a great client just like anybody does in their business journey, professional lives, but also being like, Hey, There's a huge sense of community, a huge sense of camaraderie, and we're very intentional with getting out into the community and volunteering our time and giving back to their local neighborhoods, their, you know, their local areas. And like I said, the team does it monthly. We go over there, the US side of the business goes over there about four times a year, and we really try to make it a big spectacle. You know, donating money, donating resources, but more importantly, donating our time and getting out there to really give back.

[00:12:56] Jason: So I imagine that's a bit of a challenge is that a lot of people go get VAs thinking, one, they're like, I don't know what the VA could do, but I think we need some help and I want some cheap labor. And then they sometimes treat those people as like second class members of their team and stuff like that. And so I'm sure you run into that, I'm sure. Like you get some clients and you're like, man, I don't know if they're really treating our people right. One of the things I'm really excited about, I hopefully, you know, rocket Station's excited about this too, is we coach and train all of our clients on creating good culture. Like it's wired into what we do because I think it's one of the greatest secrets to us being able to scale businesses. We can get three times the output in a business from staff if there's good culture. And so we get this stuff really well dialed in with them. And so I would imagine, like, I'm biased probably, but I would imagine that doorGrow will provide some of the best opportunities for, you know, for your VAs to work at through our clients because they're going to have good culture, they're going to have strong values and it will allow you to match people that share those similar values. So it'll be great culture fits. Culture is not something you can create in a person. It's hardwired, like it comes from their parents, their religion, their experiences, whatever. And so we need to figure out with our clients, we figure out what are their top three or four company core values? We map out a client-centric mission statement. We map out their personal why. We map out their business, why we want the business owner to have strong clarity so we can start to build the team around the business owner. Because we see a lot of businesses come to us and they've built a team around the business, and the business owner is doing all the wrong stuff, and you can't build the right team around the wrong person. And so these business owners that are holding onto and doing a lot of stuff, That they don't enjoy doing. They are the wrong person. And then they built a team around that wrong person. And so that's why they have the wrong team. If you're listening to this and you are still doing a bunch of stuff and wearing a bunch of hats and you already have a team, you have probably built the wrong team. And so, reach out to DoorGrow, we'll help you clean that up, and then we can get you connected to our collaborative situation here with Rocket Station. 

[00:15:11] So you have this six week of you know, taking them through training, making sure you have a process to vet and find the right people. I'm sure figuring out people that their language level of ability in English and all these kind of things, what we want to bring to the table DoorGrow. We have DoorGrow hiring and we have a process for matching people culturally, personality, and skill wise to a particular role. And then we also have this AI assessments platform that we've partnered with so that we can vet candidates to see if they have the cognitive ability or the intelligence and the personality traits through this AI assessment to be a really great operator. And so there's less guessing, and so this will allow us to identify from the candidates that you send over, which ones will be the cream of the crop that will really do a great job as an operator. So we're super excited about this. And you have plenty of people that we could feed through, I would imagine, and find who's going to be this great fit for this particular business. And it'll be far more affordable than 80 grand a year. 

[00:16:17] Greg: So yeah, and the DoorGrow students are almost getting double due diligence. Cause like I said, we're big on that three-point system in terms of how we evaluate, because most say most clients outside of DoorGrow, they don't really have, it's like, Hey, let's go grab a coffee and see if you're good and I'll read your resume. Awesome. Hired so they're getting the typical due diligence that we do already from a personality profiling experience from practical assessments. And then we're putting the candidates through the DoorGrow hiring platform as well to really niche it down. So, like I said, we definitely have tons of people ready to get going. But we're, we're excited to really see it. because I think when you compare what the AI does and the data you guys already collect through your vetting, mixing that with what Rocket Station has, it's going to be really special in terms of really getting the right, like I said, get the right butts in the right seats. I think we're really going to be able to do that at super high level. For your team for your, you know members that are really looking for that operator to help springboard the company to the next level. 

[00:17:09] Jason: Yeah, and you know, transparently, Rocket Station was not the only VA company we re reached out to. We reached out to several in the industry and we've talked to some about this. And you know, there may be some additional ones that we do in the future, but nobody had something as comprehensive that we've seen so far as to how you onboard clients. And this makes us feel safe giving our clients over to you. And we've actually, like Sarah's, like I want to do a hire through Rocket Station, so she's our operator and so she's been going through it and she thinks it's a really cool process and she likes that you guys are mapping out processes and asking really good questions. And so there's a level of depth there rather than just, Hey, do you like this person? And do you like how they sound on this audio recording and like here, like you can pay right now and get them started to work for you. Yeah. As if they're just some tool that you can throw into your business. 

[00:18:01] Greg: Exactly. Unfortunately, a lot of providers in the industry, they're just placements. It's just you need someone? I got someone. Here, figure it out, right? Mm-hmm. And I think that's where we bonded right when we did the podcast and we first kind of connected and started to have kind of exploratory conversations. It was just like, oh, it is more comprehensive from how you guys deliver your services to your clients. It kind of very well meshed with kind of how we just genuinely feel. It's about setting people up for success. Yeah. And there has to be more that goes into it than just here, here's someone, let us know how it goes. Call us if it doesn't work. You know, it's, it's someone's livelihood and we really take that serious and we know the team at DoorGrow does and with your culture so excited to really kind of build that, build that partnership and add to it. 

[00:18:41] Jason: Yeah, we're really excited. So, so for those that are listening people can get VAs through this partnership with Rocket Station and DoorGrow, we will have some landing pages set up. We have our DoorGrow hiring process. If you want to hear more about DoorGrow hiring. Which can be used for, you know, VAs or can be used for getting team members locally and getting the right three fits for your business. Check us out. You can reach out to us at doorgrow.com. Those of our clients that are in the Mastermind, or if you're interested in joining our mastermind, if you're in our super system, you get access to this. It's part of just what we do. It's included and you get access to DoorGrow flow, our process software. You get access to DoorGrow crm, our sales CRM software that's next level. You get access to DoorGrow os the planning, cadence and operating system that your operator's going to help you run the business through. And what else? There's some other things, but with this, you're going to have an operator that has the tools and the training because we do a weekly call supporting operators and helping them get these systems installed, helping them get the business moving forward. And so as part of our mastermind, you'll have this ongoing support to move your business forward and get the operations really well dialed in. And if you have a really good people system, a really good process system, which is, you need something more than just process documentation. You need a system that they are able to use and leverage consistently, and that's better than just checklists. And then you have a planning system. These three systems will make your business infinitely scalable. You can add doors as fast as you want to. You can do acquisitions, you can you know, go crazy, you can get BDMs and like stack doors like crazy, and your business will not break and your life will actually get easier and better by adding more doors because you have more resources, more support, and you know how to get good people, and you have good processes, and you have good planning system to keep everybody rowing in the right direction and organized. Without those three systems, adding more doors for a lot of y'all will probably just make your life worse. And so we're really excited to have this partnership with Rocket Station to be able to take our mastermind clients to that next level. So, anything else we should say about this? Greg.

[00:21:00] Greg: Oh, I hope everyone's as excited as we are. I know we matched today for the announcement as well, so we're really coordinated. I mean, DoorGrow is on the same page right now, so no, we're, we're excited. Like I said, anyone, I know you'll have landing pages and I'm sure you'll have links to make sure all your people get routed correctly, kind of into, into the pipeline so that we can kind of get them going and get them set up with operators. But no, we're excited and if anybody has any questions, I mean, feel free to reach out to us as well. 

[00:21:25] Jason: I think the last thing, just to be clear, This is not just for operators though. So, why don't you just touch on briefly, like what are some of the other roles that some of the property management businesses are getting VAs for? Yeah, definitely. And operators is typically not, historically, I've haven't seen anybody doing that, so this, that might be a little bit innovative and new, but I'm sure there's, you know, getting a personal executive assistant for the ceo. Which I usually recommend is like the first hire most people should be doing, and I've seen people that have no assistant, that have a bunch of team members. So there's that. And what else? 

[00:21:58] Greg: I would say depending on your size and your scale, like an assistant property manager, right? Someone who can kind of field the maintenance, coordinate with vendors, coordinate with your own guys, the billing, the paperwork. Yeah. The one that we've seen a lot of our clientele, regardless of size jumping into is the leasing kind of administrative assistant where, I mean, maybe you still are the person that gets out there and is showing the property, but like all the paperwork, the follow up, even just prepping the listing, I mean, those are two really big ones. Yeah. In terms of property management is, has just been incredible the last three years, seeing the evolution kind of through covid and being more virtual. So yeah, if anyone's out there, obviously the operator position is something very specific to the DoorGrow community that we're really excited about and we're going to have a nice, a nice through line to get you the best people quickly. But if you're just needing staff, whether it's say on the maintenance, whether it is an executive assistant to give you some more time back in your day, whether it's on the leasing side, listing management, social media management, reach out because that's the bread and butter of what almost 2200 of our VAs are staffed out to our clients doing each and every day. And even if you don't have the process piece fully knocked out your maintenance process, your billing process, Don't worry, like we are there for you. You're running a business, you're running a successful business. What we find is for most people, the processes get stuck in the six inches between our ears. So our team is incredible at flushing that out. We'll build it all for you and then hire a rockstar to, to jump into the seed and, and take on whatever role, whatever role you need. 

[00:23:26] Jason: Cool. Awesome. Well, I'm excited Greg. Thanks for coming on the podcast again, hanging out with me here and for matching my clothing. I appreciate that. Oh, same page. And we'll be talking soon. So until next time, everybody to our mutual growth, go to DoorGrow.com. Check us out and be sure to check out Rocket Station. Bye everyone.

[00:23:47] Jason Hull: 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! 

[00:24:13] 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.

Jul 5, 2023

Have you heard about the multifamily market oversupply that’s been increasing since the undersupply during the COVID-19 pandemic?

In this episode, Jason chats with John Carlson, President of Mark-Taylor Residential about Insight on the multifamily market oversupply. Mark-Taylor Residential has currently an inventory of 22,000 units and over 34,000 residents, being a multifamily leader in Arizona.

You'll Learn...

[06:33] What is the Multifamily Market Oversupply?

[14:44] The Fundamentals of Real Estate and Property Management

[20:05] Why Property Managers Need Their Own Portfolio

[25:11] What will Happen to the Market Next?

Tweetables

“If you're that light, people are going to be reaching out to the light when it gets dark.”

“Property managers, they have no concern about being the bad guy. They're totally cool with making sure that things work and running it like a business.”

“You have to make sense of the market.”

“I think it's a smart move that every property manager should be also building up their own investments.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: Property managers have a duty to be involved a little bit politically to prevent this firestorm from happening. And this is an opportunity to go and be the canary in the coal mine or be the Paul Revere shouting, from the horse, letting everybody know, Hey, there's a problem coming. 

[00:00:18] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income.

[00:00:55] 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] My guest today, I'm hanging out here with John Carlson. From Mark Taylor residential, and I mean, it sounds like you guys are doing some big things. They're in Arizona, they have 22,000 units, 34,000 residents. This is not a small operation, so John, welcome to the show.

[00:01:37] John: Jason, good morning everybody. Thanks for having me. Excited to be here. 

[00:01:41] Jason: Cool. So we're going to be chatting a bit about multifamily market over supply, which I'm guessing is pretty much what it sounds like. So, but John, maybe give us a little bit of background on you first and how you got into this and your relationship with Mark Taylor and all of this kind of stuff. Give us some backstory. 

[00:02:00] John: Sure, brevity matters. So, grew up in the Midwest Southern Minnesota. Farmer by trait with stepfather from age 10 until 18. Realized that was not for me. I'm not the micro dirty jobs kind of guy. You can see. I like the dressed up look. Yeah. So at age 16, I really thought about what I wanted to do in life, and of course didn't know. I was good at math, so I decided to be an electrical engineer. So I went to school for that. Worked for a great small company called vtech for about five years. Was able to finish school while working there and travel the world and discovered Phoenix and realized Minnesota was not long for me and what I wanted to be and do long term. So, chose Phoenix with my girlfriend Megan at the time. Traveled to Phoenix to look at apartments. I think we toured 15 or so apartments in one day. We had the big apartment guide book, if you remember those. Yeah, listeners. So we were feeding through those and there's a big eight fold and it had Mark Taylor communities. So we toured three or four of those and landed on San Cervantes. I always joke with my team, we actually broke into the amenity space because the office was closed, it was past six o'clock. So I just remember seeing this beautiful, resort style pool, sand, beach area, ramada water features. And I'm like, Megan, we have to live here. So, We flew back that night landed. I called the manager, Michelle Sinclair the next day and secured a two bedroom apartment class, a brand new for $940 and a month free concession. 

[00:03:28] So we moved a few weeks later and this was just prior to 9/11. Megan had a job. I was scheduled to fly back to Chicago to a final interview with a fuse company. They were opening a satellite office in Phoenix, and that was scheduled on 9/13 2001. Okay. So clearly there were no flights that day. The world was on edge, including me, and they put a hiring freeze on. So I was off to the races with my fax machine and sending out resumes if everyone knows what a fax machine is, right? So, that lasted a few months and lo and behold, Michelle, the manager, came to me and said, Hey, Would you consider part-time leasing while you wait for a position in engineering? And in my fixed mindset, I said, no. I'm an engineer pounding my chest. And a week later I realized I had to pay bills and electricity and all of those things, car payments, so I signed on and never looked back. I fell in love with the organization, real estate, and truly found my home as we like to say. And that's Mark Taylor. 

[00:04:27] Jason: Cool. That's quite a story. So it's pretty interesting. And so now what do you do at Mark Taylor? So everybody's clear. 

[00:04:34] John: So today I run Mark Taylor as president. As you mentioned, now 23,000 units Class A both Phoenix and Las Vegas. So in two states so, regional but have a pretty good grasp of the market across the country. So, And I think, a lot of us know us nationally from a brand recognition standpoint. We've been in business almost 40 years. So that's Mark Taylor in a nutshell. 

[00:04:56] Jason: So, That's awesome. Yeah, it's quite a story to go from starting to help with leasing to being president of the company. I think you skipped a lot of steps in between, but I enjoyed the beginning. So, what was the time gap there just for the audience to understand?

[00:05:13] John: So I started leasing in 2002. My girlfriend Megan, moved back to Minnesota a year later. So I was here by myself. So I had a lot of time to figure out leasing real estate in the business. So I just moved my way through the organization. Like I said, I was good at math. I think I always had an appetite for real estate and I just really sunk my teeth into this business. And, as I always tell my new hires and the younger generation folks like lean in on mentors, find the best leaders. I found some great leadership mentors, people that were patient with me Yeah. And building up my skillset including Scott Taylor and Jeff Mark, our founders. And I just felt like that really helped my growth and my pathway and I worked my ass off. And I think, you can never look back and poo work ethic and sure. My mom and my father helped me with that years ago. 

[00:06:02] Jason: Yeah. Growing up on a farm, you're going to learn some work ethic. Yeah. Whenever we were bored, my dad would say, we'd learn never to say we were bored because he would put us to work. We'd be working in the yard. 

[00:06:13] John: I think I used that word for about 10 years. 

[00:06:15] Jason: So I'm never bored. I am creative and I'm never bored, so it doesn't happen. All right, so cool. Well, John it's awesome to connect. So what year did you become president? How long? 2016. Okay. Okay, cool. Yeah, I mean, that's a cool story right there. That's a cool story. So let's get into this topic: multifamily market oversupply. I mean, there's a lot of multifamily stuff going up here in Austin. I'm seeing it pop up everywhere. There's building and building. So, what are you seeing there in Arizona? What are you seeing, maybe you think is happening here in the US and the market? 

[00:06:51] John: Sure, let me start with, I'll start with, Phoenix Metro and all this broaden out. So, Phoenix, like most of the country was undersupplied from a multifamily perspective since really 2011. And I think if you just look back at the gfc the greater financial crisis in 2008 and nine and 10 that really I'll say put development in a paralysis type state. And Phoenix specifically was almost like the Black Plague. No one wanted to even think about investing here. And as most of the audience knows, I mean, it takes a long time to, to buy a piece of dirt, zone prep, design, get zoning approvals and get it through the city and actually build a unit that's two to three or four years depending on project type. So it took a long time to build up supply. So being undersupplied for a decade really resulted in a lot of things that we hadn't seen historically in Phoenix or across really the national landscape. So fast forward to the pandemic and we're starting to kind of get our, I'll say druthers in terms of supply. We're starting to get a better balance of that. An interesting data point we were delivering 18 to 22,000 units in the mid eighties in Phoenix, and had never delivered. 10,000 units in a year, past 1987 until last year. So if you think about the population adjustment, 19, just say 95 versus today, that's, almost 2 million people different. So, clearly there was an undersupply component. Fast forward to today and we're delivering and will deliver about 16 to 17,000 units in Phoenix Metro. Again, hadn't delivered past 10,000 units until last year when we delivered just over 13,000. So, yeah, I'll just say the equilibrium was in the landlord's favor, and unfortunately for renters that was costing them in terms of, monthly rent and you add to the field, the tailwind of Covid. Lots of folks came to Phoenix and I call it the Boomerang effect. Although the boomerang never came back, meaning. A lot of folks got to experience Phoenix for the first time, and I think this was a condition across the country. They found great spots where maybe there was a little bit less restriction in the Covid era, if you will.

[00:09:04] And there were people coming here from California nonstop saying, God, I really enjoy Phoenix. I'm going to rent a place for six months. My employer's allowing me to be flexible at this point, and I'm going to test this out. And I think a lot of people decided to stay. So, as always, jobs create future apartment demand, but in this instant, if you worked in San Francisco, but you were living here in a six or 12 month lease, we weren't absorbing your job, but we were definitely taking your monthly payment. So, it was unique in that aspect and a lot of things changed from Covid. Obviously we can touch on that later, but expand. 

[00:09:34] Jason: Yeah. A lot more remote work. Everything flowed in the nation from places with less freedom to places with more freedom.

[00:09:42] John: That's just what one would expect. Yeah. And that's what happened. So I think people got a taste for Phoenix. They realized July and August aren't that bad. Yes, it's an oven for a couple of months, but we're okay. HVAC and other things. So, I think that accelerated what I think people were already starting to figure out that Phoenix was great and I think that happened across the country. So, not only Phoenix, but broadened that out. So across the country, I think there was a similar pattern in terms of lack of development, both in single family, which has to be mentioned because that's a component of our housing shortage and multifamily. So fast forward to today. You had a couple things happen, so you had some momentum in real estate.

[00:10:22] You had zero interest rates, essentially that environment for 10 to 15 years, and you started to have all of these developers starting to get their, I'll say, momentum and build units. And of course a lot of Class A units were delivered and are being delivered. And so, what's happening now is you're seeing a surge in that. And part of that has been fueled by delays in construction. So if you think about the covid related supply chain issues, some of that's kind of worked through itself over the last 12 to 18 months, which is good. So inventories are better. Pricing maybe has reprieved a bit, but if you say, supply chain issues, labor issues, which is the biggest component of that you have construction deliveries that are delayed, say three to 18 to 24 months.

[00:11:08] So a lot of these deals, the 16,000 units specifically in Phoenix are result of that. Otherwise this would've been delivered prior. So I, I think that's a big component of the oversupply. Which at the end of the day if you go into, I can go down to a bunch of soapbox areas, but if you think about the renter, which is most important to me there should be a nice equilibrium in the market that's the best for all of us, right?

[00:11:31] You get about a 3% rent growth, which has been the case since 1982, 3.2% rent growth average by year. That kind of fits with historical cpi. So when you're raising rents 20% or 10% that's not sustainable. I'll just say it that way. So this supply cresting is benefiting the renter for sure. Yeah. Q1 Phoenix was down 3% probably the lowest in the country. And, supply cures a lot of things. I'll say it that way. 

[00:11:59] Jason: Yeah. So I mean, everything's, the pendulum's swinging, right? And it's going to move back towards middle or back towards equilibrium. But how do we stop the swings? Because probably, you'll have a bunch of developers, they've been building stuff out because everybody's trying to capture all the opportunity that seems to be happening in all these markets like here in Austin. It's crazy. I'm sure it's crazy in Florida, like all the areas, there's lots of people moving from states that were more, more liberal and more control, and they're moving more towards areas where there's a little bit more freedom financially. And it'll be interesting to see if some of these places, the people that are moving, if they bring their policies with them and if those areas start to shift and change. But some of these areas what you see going on in San Francisco, what you can see going on in California, what you see going on in Seattle. I mean, some of these places do not look like great places to live anymore. Like it's getting chaotic. Sure. Because of some of the policies. So we're going to see a lot of money, I think shift, continually shifting towards these areas of freedom, and as that's happening, are these builders overbuilding? do you think that's going to be happening? That there's going to be too much like, it's like a gold rush? 

[00:13:14] John: Sure. Well, I think that ship has mostly sailed because of the interest rate environment. So yeah. I think most of us pick any sector have forgotten how to live in an interest rate environment. We were 0% essentially. So, if you look across the spectrum, I think you're going to see zombie companies, fade away. You're going to see the old adage from really 17 to 21. It's weird to say old, but you had startup companies that were negative cashflow that would not, be able to pay for a printer, but they would just get another round of funding, it's almost like a Ponzi scheme. So I think getting back to some fundamentals from a business more of an institutional business, historical methodology makes sense for the entire market. And I think this will force guys or groups or developers to be much more thoughtful as they go to market or try to build deals, right? It just it's not the wild west or, the top of the bubble. I think fundamentals matter. I think how you think about your business, how you look at, your construction, your development, your cost structures, what rent should be, all of those things are probably okay for guys that have done this the right way for a long time. I think it's the fringe guys that are greedy and are taking advantage of certain market conditions. And that's fine. Everyone has their angle. But I think this will shake out in a way where you get back to some real core guys or core groups that know what they're doing and fundamentally will help shape the future of multifamily the right way.

[00:14:44] Jason: So you mentioned the fundamentals. So what do you feel like are the fundamentals that business owners in the property management space should be focused on? That's going to prove to be effective in the long term. I mean, obviously the company that you are president of has been focused on the fundamentals and has been doing well consistently. We've got a lot of listeners that are probably much smaller than your business and what do you think they should take away from and maybe could learn from what you guys are doing at Mark Taylor? 

[00:15:18] John: Yeah, I think you know Jeff Mark, Scott Taylor, our founders, taught me a lot of great things about real estate. And if you look at their track record they've never lost a deal or a unit or a dollar in real estate in 38 years of business, which is impressive considering all of the cycles and dynamics of what happens economically. So I think it comes down to when I look at Mark Taylor, we started as a developer, became a manager. Now we consult, we asset manage all of those things. And I think their fundamentals have always kept them in check, right? They've never gotten to a point where, oh, let's be greedy or let's stretch. If you have an investment model, here's your box. Never go outside of that, right? And so, I think back to, 2006, we sold everything we owned except for one deal.

[00:16:03] In June of 06 at the peak it was a different environment then. And then we went pencils down post 2007. We built our last deal, San Porte and Tempe, and then hit pause on the other five pieces of dirt. We had a lot of guys just kept going nope, this thing's never going to end. And the first out of the ground in 2011 because we are also a data company, we've been collecting enormous amounts of data since 1985. Yeah. And everything said, tailwind, green light. So, we bought as many pieces of dirt as we could and built the most units from 11 through 15. And it really transformed our business and got us really on the front end of the last cycle. So, I think all of those things happened within our box. And today, we're moving through really the last two deals of our construction pipeline, and we'll probably be on pause or pencils down until the market makes sense again. And I think as simple as that sounds, you have to make sense of the market. So when you're seeing real cap rates below 3%, sometimes, below two and a half in 1920 and 21, you kind of got to scratch your head and say, okay, is that long? That in terms of going through a next 2, 3, 4, 5 years or next cycle. Does that make sense? And the problem with that is if you're not putting in fixed debt or fixed rates and you have guys saying, oh, the music's never going to stop, I'll just put floating rates on these or a three-year arm, that's a problem.

[00:17:24] So you're seeing guys that made potentially bad decisions or got outside of their box. Seeing what happens when the market shifts and rates move like they did. No one can control the Fed. And seeing the acceleration of those rates has really created a dynamic where things will start to break. And I think we're seeing that now, or at least those things are percolating. 

[00:17:45] Jason: So for the listeners, help them understand at Mark Taylor the how the portfolio works. Are you doing third party or are you owner operators? because you're talking about selling off properties and you're doing management.

[00:18:01] So, Give the listeners an idea. We talked about kind of the size of it, but what percentage is stuff that you developed that you've owned or that you own currently and then like that you're managing? 

[00:18:15] John: Yeah, great question. So we today, we get really all facets of the business. So our development ownership. So today we have about 5,200 units that are owned and self-managed. So we're about 80% third party. And I think the third party management aspect and also managing your own assets gives us a really nice balance. Yeah. So we're able to, in terms of properties that we own, turn my life back on properties that we own. We get to test new things like centralization and new software, new systems, new methodology. And on the third party side, we get to learn from ownership groups all over the world. We have owners from Japan, Tokyo all over the country large institutions, MetLife, Goldman Sachs, JP Morgan, et cetera, to Mom and Pops. And I think the deal flow that was occurring in 17, 18, 19 and certainly at the peak in 2021 showcased us in a, in terms of how we supported. Transaction capital markets. So every deal that comes on the market, we underwrite and it helps us get a true feel for what's happening in the market from an operational perspective.

[00:19:20] A competitor's not going to send me their financial statement, but guess what? I get to get one when they go on the market. And then we see and track through great relationships, how those things happen. Meaning how many people are signing cas if there's 500 cas in one deal, there's obviously appetite for Phoenix. So, really understanding the transaction markets, the capital markets understanding, how guys are achieving debt, equity and all of those relationships has really kept us well-rounded. So, that's fed into Mark Taylor Consulting. So today we, we consult with a variety of developers groups with marketing programs and plans asset management nationally. So, it gives us a lens into a lot of different areas that really. Just allows us to take advantage of our expertise knowledge and data. 

[00:20:05] Jason: Yeah, and that's interesting. So one of our coaches that we have he said that it's really surprising that a lot of property managers don't have their own portfolio. They don't have their own properties that they have ownership in. There's quite a few. And he says, that's kind of like going to the restaurant, asking the waiter what's good there. And they said they've never had anything. And so I think there's an advantage, like, if you believe in real estate investing, I think it's a smart move that every property manager should be also building up their own investments. That's where some of the funds should be going towards to build up their own portfolio and their own investments, because, That's, that is smart for the future. That being said, building up a business is probably one of the most profitable things if you do it effectively to get an ROI on that exists. So you mentioned you mentioned focusing on the data. And you have all this data that a lot of people just don't have or don't have the opportunity to see at the level that you are doing it at. What is the data telling you right now that you think property management business owners that are doing third party should be focused on right now?

[00:21:14] John: I think that, it's always predictable with each cycle, so I think back to. When we were coming out of the Great Recession, and I still have a, somewhere I have a sign. It was the old Clear Channel Billboard sign. It was just a little standup model. And we had three months free San Palacio, and there were other groups doing four months free. And these were prorated concessions. Wow. And when I think. To that timeframe. And most of my current generation of, leasing agents, service technicians, haven't been through a downturn. It's been a pretty good market since 2012. Yeah. And when I'm in company meetings, they'll say, raise your hand if you've worked in the gfc. And everyone's like this except for some execs. So. Trying to help them understand the cycles of this business is important. So, last year we did a lot of coaching and training on, okay, this is what owners are going to start to look for as the market shifts, right? When your rents are going up 10% NOIs here, you're above budget. There's not a lot of detailed conversations from most owners, meaning you're hitting all of those targets, things feel pretty good. But when it's doing this, And the market's softening, and now rents are going back and retracting. Now what do they do? They start to look at marketing costs.

[00:22:26] They dig in like, what's going on exactly? Is my phone number on my website go directly to, someone that will answer it? Are my phones being answered? What's this expense over here? They become expense conscious, marketing conscious and personnel conscious. That's predictable. So my marketing team said, wow, you were right. We're getting a lot of calls now from owners. Of course you are. Yeah, the dynamics shifted and it's not even bad. It's just softened. So wait till maybe you're not covering debt, right? So I'd say that most of our groups are well capitalized. That's not an issue, but that's going to be for certain third party management groups. That's going to be an issue, right? Because they're going to pay debt before they pay your payroll depending on your property management agreement. So how does that work out? You're going to have to start to scale back on expenses. They're going to say, Hey, We need to save $20,000 this month, how are you going to do it?

[00:23:13] So it just changes the dynamic of how you function as an operator. And I think back to your original point, us as ownership, that really helps us because we know in terms of our focus of maximizing the bottom line or financial potential of each asset. Man, it's a lot harder in this type of environment and it's going to get a bit harder for the next 12 to 24 months.

[00:23:34] Jason: Yeah, I'm a little bit of a conspiracy theorist, but I think leading into the next election, every election year, things get really crazy. So, and it seems like nothing makes sense right now, like everything is just getting worse and crazy and, It doesn't seem to make sense, but I think it's it'll be crazy leading into 2024. So it'll be interesting. And I think, yeah, there will likely, it sounds like, be a wave of owners reaching out, owners wanting more support, investors wanting more help with what they're dealing with and trying to figure stuff out. There's probably quite a few that just I think ever since the pandemic, it woke people up because lot of the investors that were DIY and doing it themselves, they realized that they don't like being the bad guy. And if things do get crazy and things financially get tight, maybe for renters or for owners, right? Then property managers, they have no concern about being the bad guy. They're totally cool with making sure that things work and running it like a business because they've heard it all. Sure. They've been they're numb to all the BS and the stories and the, drama. Whereas, a lot of the homeowners and the property owners like, that's hard. It's hard, it's uncomfortable to deal with those situations. But when things are good, They're like I don't know that I need a property manager. But I think the need will increase. So this is interesting. So, well, is there anything else you'd like anyone to know about this idea of multifamily market oversupply or maybe about Mark Taylor or how should we wrap this up?

[00:25:11] John: Well, I would start with just, from a. Current to long term perspective. So I think the over supply is happening. You're seeing it in Austin and Phoenix and other markets, and that will eventually fill up, right? So you have no choice but to stabilize. So your rents might not be what you performed, but are underwrote in your performer. But the reality is, at some point those will stabilize. And I think if you look past the next 24 months, 36 months and beyond, and really look at the last part of this decade, which is weird to say, but the late twenties. I think, we have to look at the country or this environment as there is going to be a housing supply shortage and I'm including single family for sale, single family for rent. And if you just go back to something we touched on earlier the attack on our industry and landlords and developers in general. Rent control is just. Commonly brought up by legislatures every year, including Arizona. And, the things that have, I'll say mostly ruined certain markets. I won't name St. Paul Portland and I could keep going. Uh, But those policies and how they've thought about creating housing. For their constituents and their population has clearly give them a great f And I think if you look across the spectrum of groups or cities or states that have done this well we have to fight for those policies.

[00:26:36] And if we don't fight the wrong policies will occur and this housing shortage will just get, I think, substantially worse quickly. So, we have to think about policies. We have to think about doing things the right way, making sure that we have an ability to develop and create supply so that we can house folks that want to move to Austin, Phoenix and everywhere else where people believe in liberty, freedom and all the things that we believe are, founded in the constitution and belief in the US makes sense. So here we are today, Phoenix and Austin being two of them. 

[00:27:12] Jason: Yeah, it'll be interesting. If there's a shortage supply shortage coming in, housing, and then people think the solution is rent control it. That's like pouring gasoline on the fire. They're like, Hey, let's just make this worse. It's, I mean, it's wrong politicians that are doing the stupidest thing ever. It was the wrong thing and destroying things. And so, yeah. I think that's everybody listening, property managers have a duty to be involved a little bit politically to prevent this firestorm from happening. And this is an opportunity to go and be the canary in the coal mine or be the Paul Revere shouting, from the horse, letting everybody know, Hey, there's a problem coming. People are going to start trying to push this rent control idea and it's a bad idea if for no other reason than helping the industry. Use it as a vehicle or platform for some self-promotion for your business in your market, and get on some news channels. But I think that would be a great idea because then you're going to look like a profit when this stuff starts to come down and they're implementing rent control and there was a problem and you're like, Hey, I was the one that told you so people are going to start to listen to you.

[00:28:16] This was like Winston Churchill, right? Yeah. Hitler started taking over and he was like, Hey, I've been telling everybody, and they're like, okay, you help us out. And if you're that light, people are going to be reaching out to the light when it gets dark. And because they know you, you have been talking about this. So maybe it's time for property managers to get a little bit noisy about this rent control stuff that's coming and not just hope and pray that it doesn't happen. You don't have to deal with it so.

[00:28:43] John: No question. No question. 

[00:28:45] Jason: Cool. Well, John, really great having you on the show. Any call to action you want to leave anybody with or? How can people check out your company or whatever you'd like. 

[00:28:54] John: Yeah, check us out mark-taylor.com. That's mark hyphen taylor.com. Like I said, third party manager development consulting. If you're thinking about, developing a project in Arizona or you want to learn more about, data and terms of multifamily market conditions, Arizona, Nevada will soon be launching a subscription model, so you'll get access to a lot of our great reports.

[00:29:17] And data, which will be incredibly helpful for those that are just trying to understand the market and what's next. So, reach out to myself directly. You can find me on the website and I appreciate you having me, Jason. It's always good to talk to great guys. 

[00:29:31] Jason: Like really great to have you. Thanks for coming on the show. 

[00:29:34] John: Thank you. Talk soon. All right. 

[00:29:37] Jason: So, really exciting to have John come on the show today. I think this brought up some ideas of what everybody needs to be paying attention to in the future, and property managers, your job for your investors is to see a little bit of the future and protect your investors and your clients, right? And hopefully we had mentioned also becoming an investor yourself if you're not already doing that. So for those of you that are struggling with your property management business right now, you're like, I don't have time right now to even think about getting a little bit politically active about rent control, or, I don't have time right now to even worry about the data or the future. I'm struggling to figure out how to like make money in my business, or I'm struggling with all the questions my team are throwing at me all the time. Why can't they just think for themselves? Reach out to DoorGrow, we can help you make your business scalable. We can help make it easier and we can help remove that secret pain that a lot of you have that are over 200 doors that deep down, if you add more doors, your life's not going to get better, personally, it's going to get harder. And so we psychologically get reversed towards growth and adding more doors. We can help solve that problem. We just need to make your business scalable and get you out of all the things that you really don't enjoy doing.

[00:30:54] And we're really good at helping people do that. So if you'd like to start stacking and adding a hundred, 200 plus stores a year in your property management business and grow it and scale it, we have clients that are doing that and we have proven it and our model works and we can help you do that as well.

[00:31:11] So reach out to DoorGrow. And if you're one of the startups or smaller companies and you're under a hundred doors, we can help you get very quickly, get those doors stacked up and start and get the growth going. So reach out to DoorGrow. Check us out to DoorGrow.com. Click the big pink button. We have a free training that's 95 minutes long of me just dropping value, and that's going to change your mindset about what it takes to grow your property management business and to make it scalable.

[00:31:38] Check that out and it's free. It's right there. There's a YouTube video on that page that we set up. So, and book a call with us. We'd love to talk with you and see if we can help you grow and scale your business. We're always looking for really awesome growth-minded property managers to be part of our Mastermind community. We have some amazing people in there that are getting awesome results.

[00:32:00] Jason Hull: 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! 

[00:32:26] 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.

Jun 15, 2023

Many property management entrepreneurs struggle to document their processes, and this leads to an overall lack of efficiency in their businesses. Documenting processes helps business owners streamline the day-to-day and reduce interruptions from team members.

Join Jason as he chats with Greg Brooks from Rocket Station regarding process mapping and how it can be used to benefit your property management company.

You'll Learn...

[04:10] What Process Mapping is and Why You Need it

[10:35] How to Document Your Processes

[16:15] Why You Need to Focus on YOU not the Business

[22:40] What Rocket Station Does

Tweetables

“Every entrepreneur can double their capacity by getting a really good assistant.”

“It's very common that we focus so much on the business and we don't focus on what we need.”

“As the business grows, the biggest constraints in the business are where there should be the most attention.”

“The process is always needed where we feel the biggest bottleneck or where we're feeling the most struggle.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason Hull: for most business owners, getting a VA is probably the very first hire they should make. Every entrepreneur can double their capacity by getting a really good assistant. 

[00:00:11] Welcome Doorgrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. 

[00:00:37] Jason Hull: 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.

[00:01:10] And I'm hanging out today here with Greg Brooks of Rocket Station. So Greg, welcome to the show. 

[00:01:18] Greg Brooks: Yeah, Jason, thanks so much for having us on. Excited to kind of dive in today.

[00:01:21] Jason Hull: Cool. So to get started, why don't you give us a little bit of background of how you sort of got into entrepreneurism and developed Rocket Station, and then we can transition right into what Rocket Station is. 

[00:01:34] Greg Brooks: Yeah no, definitely. I was like your classic statistic coming out of college, I was a division one athlete and I got done playing and worked in the fundraising world for a little bit, got my masters and very quickly kind of had that entrepreneurial itch. You know, growing up I had you know, goalkeeper academies that I would run, I reffed on the side, kind of had a bunch of little businesses that would help give me some money in my pocket for college. And kind of once I got done with my masters, you know, began on kind of my entrepreneurial journey. I was seven jobs or businesses owned in eight years trying to figure it out. Everything from supplement company all the way through to a restaurant. So really-- Wow. Was trying to kind of find, I feel like being that athlete, right? You have that kind of grind mentality and was trying to see how the heck I was got to get that to translate to making some money and not being a broke college kid anymore. 

[00:02:22] And then about four years ago now met up with my partners at Rocket Station. I'd say kind of similar to you. Had, you know, had a couple investment properties myself, but was by no means a full blown property manager or a virtual staffing company with almost 2200 employees in the Philippines. I had never even met someone from the Philippines. Probably didn't even know where it was on a map. Yeah. But was fortunate enough .A couple of my partners were both operators as well as you know, kind of the visionary for where we wanted to go within the space and say they were looking for someone with, you know, kind of a pedigree in sales and marketing and I guess I fit the bill. So it's been a wild ride, kind of, you know, learning this industry. I mean, we work with. You know, operators from all sizes, 50 doors to 45,000. So seeing kind of the different struggles or bottlenecks and growth opportunity, especially over the last three years that this industry has kind of been dealing with, has been exciting and say excited to kind of sit here now positioned as kind of one of the top virtual staffing companies to the property management space and helping our clients solve a lot of kind of day-to-day operational issues when it comes to process as well as people.

[00:03:29] Jason Hull: Very cool. So where on a map can people find the Philippines? 

[00:03:34] Greg Brooks: Yeah, you want to go say, a lot of people go across the Pacific. You can find Japan and then go a little bit further south. That's where you're looking right there, in that southeast Asian corridor. It's about-- now they can all find it. Yeah. 7,000 islands all spread out. If you push them together, it's about half the size of Florida. But I'm actually, I'm not sure when this episode will release, but we're actually headed there next week for our Q1 wrap up, which I'm excited about. Cool. Spend seven days over there. 

[00:03:57] Jason Hull: Yeah. Very cool. So, our topic today is process mapping your property management business. And so let's talk a little bit about process mapping and then maybe we can get into how Rocket Station could help with that. So what is process mapping? 

[00:04:13] Greg Brooks: Yeah. For us-- and candidly this came from kind of our own business lessons as young entrepreneurs, especially in property management. So often, we've got great teams. We've got people that have been with us for a while that are running our day-to-day operations. But what they're doing right our leasing processes, our maintenance processes, onboarding a new owner, offboarding an owner, a lot of that we rely on people to, you know, "get the job done right." and we have our weekly meetings and our huddles. But in terms of like a conceptualized process flow or kind of orders of responsibility or actual training documentation that could allow us if we took on a hundred new doors next month to hire 3, 4, 5 more property managers. We found that a lot of operators, regardless of size, really lack that in depth, detailed documentation around how their departments, how their businesses, how each of their individual team members operates. So for us, like we feel like that being a virtual staffing company, that's the key, right? Whether you're just trying to maintain and have a better work life balance as the owner, or if you're trying to scale from 500 to a thousand doors. A lot of people try to acquire and then just hire. And we feel like unless you have those processes and systems really mapped out, documented technology plugged in the right place, you're creating a lot of headache and a lot of extra work and just a lot of unenjoyment of the company that you're trying to scale. So we feel like process mapping is really the key and kind of the foundation to any property manager's business in order to get where they want to be.

[00:05:41] Jason Hull: So big challenge that I see in the industry is that a lot of these visionary entrepreneurs, they know that they need process. They know they need a process system, but they hate it, like they hate doing it. It's not fun for them. Now, some of them enjoy the act of creating a system or creating a process, but then they hate to make sure it's being used and they hate to run it. And that's where those operators kind of come in. Like it's kind of the yin of the yang. Most visionary entrepreneurs, they really need an operator. I would say that's probably the most important hire they'll ever have in their business, and a lot of them are lacking it, so, now once they have an operator, this would be like something they could easily give to them. They'll be like, "Hey, do this stuff. Like get these processes documented. Let me show you how to do it." And maybe they'll record that and they'll say, now you make a process for this. Because they don't want to do it. And those of you listening know, you know, you're that person because you've had it on your to-do list for at least a month, maybe even many months, maybe even years, to get certain things documented or defined processes, and it's still not done yet, which is a clue you're not the person that should be doing it yet. You're not the person. So Greg does Rocket Station provide people like that, operators, or are they the more going to be the people that can help to get these processes in place? Just curious. 

[00:07:08] Greg Brooks: Yeah. Yep. Yeah, so we do a combination of both. And you're exactly right. Like most. I mean, you think of a typical property company owner, right? They're the visionary. They've got big goals, aspirations, like sitting at a desk, creating flow charts and documenting SOPs and creating what are the FAQs that most people ask when they make a leasing inquiry? Like they don't want to do that and shouldn't have to, and candidly, like who has the time, right? A lot of us, were operating businesses. If we're at the point where we know we need processes, it's either because, we've got messes we're trying to clean up in the office, which is taking our real time. Or we're acquiring and growing, which is also taking our real time. So it's like how do you balance that? 

[00:07:46] So at Rocket Station, that's really our niche within the virtual staffing space, right? There's lots of providers out there that can staff you with people. We feel like without process and without a resource for the owner to be able to build those processes or to, you know, take a property manager or take your leasing team and have them work with somebody who can conceptualize and document those processes. You're really not doing your business justice. You're not doing your future virtual assistant justice in terms of getting them set up for success. So we do a combination of both. You asked, do we just hand over processes or do we kind of build them from scratch? We do both. So we're very fortunate. Like I said we work with over 550 clients just in the single family property management space itself. We also do commercial, we do short term, but we have developed with our clients. Depending on your scale, you know, the problems at a hundred doors are a little bit different than the problems and processes you need at a thousand doors, but kind of industry best practices based on, you know, the positions and the departments and the structure that companies utilize. We also have great partnerships within the industry with a lot of the softwares that you see out there. Even some names I've seen that have been on the podcast here, whether it's like maintenance coordination software, or leasing software or you know, the Appfolios the Propertywares the Buildiums of the world, where everyone's technology needs to be built into their processes, but not a lot of operators know the ins and outs of all the buttons to click and how to do this, and how to send off this, you know, th this report. So we also work directly with a lot of the software companies, templating out all the functionality that their software enables their clients to utilize, which then we pass along to the client to bake it in.

[00:09:22] So we try to template out as much as possible. I mean, it's no secret top operators, I mean, even mid-level operators, 80% of what they're doing, 85% of what they're doing every single day is pretty uniform across the industry. Where we get really dangerous and become a real big asset for our clients in dangerous, in a good way, is part of our onboarding you first spend two weeks minimum with our process development team and our team of process engineers taking our best practices and our guidebooks on software or specific positions and we tweak it and customize it to how your business operates and the structure, the points of contact, the department leaders that you utilize. So it's kind of best of both worlds, keeping it very efficient at the end of the day. Like we said, most operators are not doing process mapping is because they probably don't have time and we totally respect that. But we are really able to create a very robust, very deep, very thorough process through a combination of the customization as well as the templating and best practices that we leverage across our 500 plus customers.

[00:10:28] Jason Hull: Cool. So let's talk For those that are listening, they're like, yeah, you know, I know I need to map out some processes. I want to start working on the process mapping myself. What would you recommend as the process to map out a process? 

[00:10:42] Greg Brooks: Definitely, I think the process is always needed where we feel the biggest bottleneck or where we're feeling the most struggle, and I kind of joke, the metaphor that we use is within your office, anytime you or your team have, oh, shoot moments. "Oh, shoot, I forgot to do this. Oh shoot, I don't want to do this. Oh shoot, I ran out of time to get to this." That's usually where you need to start developing process immediately. You know, that's typically kind of your foundational billing structure, right? Whether it's you know, whether it's like your leasing process or whether it's how you handle a maintenance call, how you troubleshoot an issue on, on, on site, at a property. I'm trying to think what else. Like your past due, you're invoicing, right? All of those kind of, you know, things that are very repetitive, that are very low level, but have to be done every day. We typically see that's the most impactful place that you can start implementing and documenting your processes. Like I said, we kind of coined the term, the oh shoot moments, you know, the, that's really where the operator, kind of like what you said, same thing for the business owner. Each of your teams, each of your property managers, your leasing agents, there's things that they're either forgetting to do or not doing. It's because it's probably a low priority item that you should be reinforcing process rather than just relying on them to get it done.

[00:11:47] And there's many different ways. I know you guys have a great software. I mean, there's tons of different mind mapping softwares out there, but you know, even just a whiteboarding exercise. You know, kind of just doing the, "okay guys, like where are we? Let's go through the simple 12 steps to go from advertising a property to getting a lease signed." Just simplify, and then start to back into the nuance. I think a lot of operators, they think their business, it's very unique. "We do this a certain way, we do that a certain way," and they start thinking too much about the granular and not enough about just the basic step one, step two, step three of the life cycle of a tenant or an owner. So being able to really start there, kind of the good old KISS method, right? 'Keep it simple, silly,' like start very basic and then you can start to build out first. But even just that very basic you know, 10,000 foot overview of how each department operates or how each department interacts with one another is typically where we want to start from a process mapping standpoint. 

[00:12:41] Jason Hull: Cool. Yeah. Very cool. Yeah. I like the idea of looking at the bottlenecks because as the business grows, the biggest constraints in the business are where there should be the most attention. There's a good book by Eliyahu Goldratt. It's called The Goal and it perpetuates the theory of constraints, and it illustrates it nicely. It's kind of a dry read, but, so I recommend you listen to the audiobook because they have actors to play each part. Unless you like dry reading, so. But the ideas in this book, the guy is looking at everything through the lens of trying to fix this factory that he's in charge of, and he's looking at all these different stages in the factory, and they were making things less efficient by improving each step. Because if each step is maximum efficiency, that means they were just building up inventory and it was causing even more constraint and more delay. And so everything has to work as a cohesive whole. And so I like the idea of looking at the larger big picture because you can like optimize one part of your process super strongly and shove a lot of stuff through, and then it can all pile up somewhere else. And that's not the most efficient business model.

[00:13:50] It would actually be more efficient to slow things down on that previous step to the level that the next step can handle it fully instead of it building up sort of some sort of constraint or inventory or whatever that you have to like manage and inventory and property management would just be like things backing up, right? So in that situation. So what else can we share with people about process mapping? And then let's get into maybe... I really liked what you had said about how you kind of onboard your clients and bringing them into with your dev team to map out processes. So maybe we can go in a little more detail about that.

[00:14:28] Greg Brooks: Yeah, definitely. And then kind of just off of what you just said there, I think the biggest thing is at the end of the day, a lot, I'm sure a lot of people listening to this business they're operators, right? They are stuck. The good old stuck in the business versus working on the business. Yeah. I mean, I would say don't try to do it all yourself, right? Whether it's consultants and consulting services, like what DoorGrow has, or bringing in, hiring kind of your yin to your yang, right? Someone who has an operational mindset, and I think that's a huge part of it as well. Even with how we do it. Typically how an engagement works with one of our clients is like we allow the visionary type business owner to very efficiently get the processes or coordinate their team to get the structure out of them so that you can have that breath of fresh air to like really conceptualize and view your business and even just pinpoint like where those bottlenecks are. So often, I think especially if you're growing your property management company, onboarding new owners, onboarding new doors, it's like you're just waking up and you're a firefighter every day. So just having a resource, whether it's an internal hire, a consultant, a service like ours, to just like get how the system operates now.

[00:15:29] Forget even trying to make it more efficient. Forget refining, forget figuring out how many more people we need. Just having a resource where their skillset is being able to conceptualize and document and get that out is hugely valuable. Where what we find is with our clients, like very quickly, you know, their key investors their property managers themselves as the owner, they're very quickly able to say, "Well, why are we doing it like that? What does this look like?" Or our team can say, "well, did you know you can automate this whole business function with the technology that you're already paying a pretty penny for?" So just like getting it out, right? Don't feel like you got to kind of make it more efficient and document the same time. It's like, let's just figure out what we got here. That's just hugely valuable and should be like kind of the first stepping stone for anybody as they go down the, you know, building systems and processes pathway. 

[00:16:13] Jason Hull: Yeah. I think one of the interesting things that I see a lot in having, you know, been kind of on the inside of probably thousands of property management businesses that's really interesting, is that it's very common, I think just in general for entrepreneurs is that we focus so much on the business and we don't focus on what we need as an entrepreneur in order to move towards what I've talked about on previous episodes, which I call the four reasons, like more fulfillment in our day-to-day, more freedom, more contribution, more support in our business. Those are the four reasons we start a business, and we all want that fifth reason of safety and certainty like our clients want, and in order to create those five things, a lot of times business owners make the mistake of just continually serving the business. What does the business need? Oh, the business needs an operator. The business needs to hire, the business needs this. Meanwhile, their needs continually get neglected. It's super common that you get to the point where you have two to 400 doors, I call it the second sand trap, and you're miserable. More miserable than you've ever been in your business or maybe in your life, and you now have an entire team around you that are doing stuff in the business, but they're asking you tons of questions. 

[00:17:28] You are now the biggest bottleneck in the business. You're frustrated and banging your head against the wall thinking, "why can't they just think for themselves?" And it's because you've built a team around the wrong person. You didn't build the business in a way that you get to do the things you most enjoy. And so the way we combat that, I like the lens of looking at what does the business need? What systems do you have? How can you do this? I want to challenge everybody listening also to pay attention to what you need because this business exists to give you fulfillment, to give you freedom to take care of you, and you've spent so much of this trying to take care of the business and take care of your team. So what we do with clients is we have them do a time study. And we have them categorize based on the energetically, which things give them energy, like gives them fulfillment, freedom. Those are plus signs and which things are minus signs that are taking those things away. And then we take a look at those. And then we also categorize them based on you know, whether it's strategic time, like you're focusing on the business, or whether it's tactical, where you're in the business, you're making phone calls, you're doing sales, you're like doing the work, you're sending emails. And for most visionary entrepreneurs, the tactical stuff are the minus signs.

[00:18:39] And then the other hidden thing that we track in time studies are interruptions, because this is the biggest hidden thief in a business, is all the interruptions, your team interrupting you, tenants, owners interrupting you. All the interruptions are a thief, and one interruption according to Gary Keller's book, The One Thing, according to research cited in there, costs 18 minutes of productivity. And normally team members are interrupting each other at least once every 18 minutes, so you're losing over a half hour of labor every time. One team member interrupts another team member. And so that's why some businesses, I've seen some with entire teams and it feels like they're just spinning their wheels. They're not really making, innovating, moving progress forward and they're just barely getting all the to-dos done. And so I would challenge people, especially if they come on board with DoorGrow, we would have them do a time study to get clarity on what they need most to get to that next level.

[00:19:33] because there's a lot of people in the 200 to 400 door stage that they don't even really want to add doors. That's the secret. Usually at that stage, they deep down unconsciously, don't really want to add doors. They say they do, but when I talk with them, adding more doors, I can tell, means more pain in their mind. So they're psychologically against themselves. They're reversed. And in order to do that, they need to quit focusing on the business and they need to start focusing on themselves and what they need, and their team will be better off if they have those four reasons, their team members can start to have it because their team members will be doing the right things and they'll have the vision to be able to see that their team members are out of alignment or not on those four things for themselves. And I find we get our clients three times the productivity out of their existing team members if they are in alignment with the four reasons. Three times. So yeah, that's cost savings. 

[00:20:29] Greg Brooks: A hundred percent. And it's just that leveling up, right? It's for the business owner then being able to level up into what they want to do, run the business that they want. That cascades down to your management. Obviously we come at it kind of from the bottom up, right? We talk through with a lot of our clients once we go through the process mapping piece is like a virtual assistant hired the right way, onboarded the right way can be so valuable. And it's, you know, for some clients it's a cost cutting measure like, at eight bucks, 10 bucks, 12 bucks an hour, it's typically got to save you a ton of overhead compared to hiring somebody locally. But we go to them and say, "Hey, look, now we have these processes. You've been able to diagnose what your negatives are, right? What's sucking the energy out of you. Well, look, we just took you out of doing c and d level work. You're now doing the a and b in the space that you thrive, which is only got to help the business get where you want it to go. And we have a super affordable resource that has the skillset and character suits to be able to do that work better than you would anyway." So it's that win-win- win all around the board. Yeah. And then it cascade down. Especially for that, we have a lot of clients in that kind of 200 to 500 range. Yes. It's just, you just kind of keep, you keep throwing them muck, right? You're in the minutiae of it, just trying to get through to the next day and the thought of going to 700 doors is just like, "no way I'm got to have a heart attack." But when you can start developing those processes, you know, mirror that up against your team's strengths, who you have, where do you want this property manager or this leasing, you know, agent to be really, and what do you want them doing? 

[00:21:54] We like to simplify it down to, I mean, no one should have more than three to five core responsibilities, right? Really. And then property management. That's very hard. But if we can get people doing the three to five things that are in their sweet spot. What needs to fall off of their plate and then how can we offset that with process and incredible VAs to get them so that the whole business can take a level up and I mean, once again, coming back to just the personal thing, people can enjoy going to work again. There's a lot of times, whereas the owner where like, "I just don't want to go in." I'm sick of getting my teeth kicked in. So it's like your team feels that too. Well, how can we be enjoying this more. How can we increase the culture, make it a better experience? Your owners feel that, your tenants feel that, and it all kind of starts at this initial discovery and jumping in with the process piece.

[00:22:37] Jason Hull: Yeah, totally. So cool. Well, tell us a little bit more about Rocket Station. I mean, there's a lot of VA companies targeting the property management space. We've had some on the show. We've had like Anaquim, virtually Incredible, Hire Smart, and several others. What do you feel like makes Rocket Station stand out? How are you kind of unique in the space? And why should somebody reach out to you instead of somebody else? 

[00:23:02] Greg Brooks: Yeah. No, definitely. So, I mean, big thing kind of comes back to what we just talked about. We feel like there are, there's a lot of, especially, and we've seen them in the last five years, there's a new VA company every single week, that specializes, "in real estate." I think at the end of the day, a part of the puzzle of hiring VAs is finding great VAs. So just from sheer like, kind of recruitment size, all of our team members are based in the Philippines. So like, like I mentioned earlier, we've got 2200 people, 250 internal employees that work in the Philippines, recruiting, training, and onboarding what we feel like is some of the best talent the country has to offer. And all we do is real estate. So we break our business into kind of four key pillars. So it's property management, investor, real estate agent and brokerage, and then we have a home service division as well. So a big part of what we do is providing, we want it to be a win, right? We want a rockstar virtual assistant that has spent five and a half weeks going through our training and evaluation to get placed with the perfect client so they can grow their career and grow professionally and make more money and all the things any employee wants.

[00:24:03] We also want a client who has an ease of experience where at the end of it, they get a high output individual with as minimal headaches as possible. Unfortunately we feel like in the VA space, a lot of VA companies out there are more placement agencies. Meaning they'll find you somebody, but then you're kind of on your own to get them trained and hold them accountable. I mean, every VA company out there touts "you'll get management support and all," but once you get into it, that management support really is just, "Hey, if the VA messes up, give us a call. We'll get you a new one," and that's just not like the end goal. We're big on this idea of an being an integrated staffing service, and what that means is our perfect experience is we only staff dedicated virtual assistance to our clients, either part-time or full-time.

[00:24:45] So the perfect experience for us is, yes, Rocket Station held your hand and helped you develop processes and job scopes. We do all the recruitment and placement of somebody who we've evaluated over the course of five weeks to be the right fit. But at the end of the day, we want them to look, act, and feel like a member of your team. So we feel like that transactional nature that a lot of VA companies unfortunately go with, just because they're trying to get butts in seats. It doesn't help anyone. It doesn't help the property manager. It certainly doesn't help the va. In terms of finding people that really grow and stick well, one of the numbers we're really proud of is our average client retention is 33 months.

[00:25:20] So on average, the VA that you hire with us is lasting with you almost three years. Which I mean, in the VA space is about four times industry average, but even for the types of positions that we're filling, maintenance coordinators, leasing administrators, like you're not hiring somebody locally that's got to last more than nine to 15 months. So we're really proud of that and we feel like it creates that experience where we help. I mean, our point of differentiation is we're not just helping a VA get a job, we're helping our property management clients set up their systems and process so they can be successful with hiring virtual assistants. Because I think anyone out there that either currently has VAs or has maybe tried hiring VAs you very quickly realize that the number one, the term VA kind of very much undersells the capacity of what these team members abroad can do. Virtual assistant, you think my calendar or make a follow up call for me. And it's not that right? We're hiring, you know, world class customer service, leasing agents, salespeople, right? People who can really come in and we've got lots of cool studies to show this, but can typically outperform a local hire about three to one compared to what, you know, what you would get outsourcing versus hiring. But we really try to handhold and help our clients create the infrastructure-- a lot of it through process mapping-- to ensure the success of that hire. Sometimes people don't match. Sometimes VAs, you know, they do get replaced in six months, nine months. But the fact that we take that deep investment from literally documenting the processes for our clients, really getting to know them and managing that relationship as if we are a part of their team, really allows it to be a win across the board rather than just the transactional nature that unfortunately so many VA companies kind of run with in, in the property management space specifically.

[00:27:03] Jason Hull: So, I mean, that's incredibly low churn. If you're able to, on average do 33 months. So what would you say really-- I mean, because that's unique-- what really is causing that? 

[00:27:16] Greg Brooks: I think it's a, I mean, hate throwing around the word culture because everyone throws around culture, right? I got a great culture. We have a different culture, we have a unique culture, but for us, it really is the culture piece in terms of how we structure the experience for the virtual assistant in the Philippines, mixed with how we structure the experience for the client to where we kind of view our business kind of in like two different verticals that combine when the client hires. So through our recruitment process, through the training, through all the support that we give even down to like how we compensate the benefits that they receive. It all lends to being a more structured employment option for the virtual assistant themselves. And we see that in terms of, we're very fortunate. We spend minimal dollars advertising for recruits in the Philippines. And last month we had 5,500 people apply for a job at Rocket Station. And a lot of that we feel like speaks to the culture because we have an incredible internal network over there that champions the culture that we're trying to provide, where we're not just that transactional VA company that's got to get you a client and then you got to kind of figure it out, right? We're helping support their education right from the jump in terms of the industry and the types of clients they're got to land with. Once they do get selected and hired by a client, we have all this process mapping and training and documentation custom-built. That's setting them for up for success. And then we actively are managing it, looking for opportunities to grow the VA's experience and their knowledge once they're working with the client and performing in their role. So just creating those feedback loops that create really strong culture with our teams over there. And then also marrying that with. The preparation that we do with the clients here.

[00:28:58] And I know VAs have become a lot more common, especially during Covid, but I mean there's still a lot of operators all sizes of business where it's still-- for a bad metaphor here-- it's still very foreign to them, right? They're like, how the heck am I got to communicate with this person every day? How are they got to be on our meetings? How are they got to be able to be plugged into our technology? So being able to walk them through step by step with that, doing it a lot of that for them, but making sure the infrastructure is set up allows them to look at this VA that they're hiring more as a member of their team rather than just the person who is vetting all of their lease applications because their leasing agent is sick of doing it or not doing it. You know what I mean? It's that different in terms of like, Hey, we have the end goal of them being integrated, being a part of their team. I mean, we have incredible stories of, ever since the world has kind of opened back up, clients literally traveling to the Philippines to visit. Actually within the PMI franchise network, one of our kind of trophy clients they flew. Four of their VAs over for the Property Management Incorporated national Convention last year. So it's just great. It's that different experience where it's like, hey, people are people. As business owners, we need to set people up for success because personally, I've never hired somebody who wants to quit three months later. When the employer meets the employee, there typically is a value trade there where somebody wants to succeed and for anyone that's worked with VAs in the Philippines, when you talk about like work ethic and really just want to it's world class, like they want to come in and be a valuable member of the team.

[00:30:26] So the way that we're able to prep the client, the culture that we're able to cultivate within the VA space itself is what really lends itself to that really strong marriage and that super low churn that the client actually feels in their business, whether that's being able to add 200 more doors, whether that's becoming, you know, more profitable or cutting down their overhead, like whatever their end goal is with hiring VAs, they're able to realize that faster and they're able to get just a huge resource, a huge talent in terms of this dedicated virtual assistant. 

[00:30:56] Jason Hull: Yeah, for most business owners, getting a VA is probably the very first hire they should make. They're probably not ready yet at a smaller level of maybe like 50 to a hundred doors, you know, they're not ready probably to afford to hire a good operator or somebody come in and do all operations. But getting a really good assistant. Every entrepreneur can double their capacity by getting a really good assistant. I never want to be without my own assistant. I have an amazing assistant. She's in Mexico and we've got at least two team members in the Philippines. We've got multiple team members in Canada. Like the cool thing about being able to do things virtually is that you can get the best, you can get the best wherever they're at. And 

[00:31:44] Greg Brooks: at a price you can afford, typically.

[00:31:45] Jason Hull: Yeah, at a price you can afford. Now I definitely have a lot of US based team members. And I do believe, like, you know, there's a lot of times there's a difference. There's a lot of times there's been a difference, but for everybody on my team, they're the best I could find in any category. And it didn't matter where they were. So, It just is icing on the cake that, you know, having a logo designer, for example, in the Philippines would charge probably 10 times less than a logo designer in New York City. So there's definitely advantages and those get passed on to your clients in a lot of instances as well. And so it allows the property manager to remain competitive in their pricing and to keep their operations and to have more profit margin. So it really does create a win-win- win all the way around so everybody benefits. Well, cool. I think that's a pretty good place to wrap unless there's anything else you want to say about Rocket Station. You can tell us how we can get in touch with Rocket Station or those listening, how they can. Get a hold of you. 

[00:32:43] Greg Brooks: Yeah, definitely. So anybody who wants to nerd out on process mapping or learn more about VAs, say, we'd love to hop on a quick call and talk to you. Our team's got some great resources. We've got some great kind of done for you SOPs where if this idea of process mapping is something you want to get into, but maybe using a service like ours you're not quite ready for. We've got some great how tos. So head over to rocketstation.com. Obviously check out our website. We've got some great lead magnets and resources there for anybody who wants them. Anyone interested in a call, go to discovery.rocketstation.com. For all the DoorGrow listeners, we do have a $500 off promo that we're running. So just make sure in the referral box put "DoorGrow." But like I said, the call itself is completely free. So even if you're trying to learn more about VAs, learn more about processes, our team of specialists, we'd love to kind of walk you through, you know, learn a little bit about your business, see if we can help, and if not, be able to fill you up with a ton of resources and knowledge and a bunch of takeaways to, to hopefully help you run a more efficient business where you leverage virtual assistance in some capacity.

[00:33:42] Jason Hull: Awesome. Thanks Greg for being on the DoorGrowShow. 

[00:33:45] Greg Brooks: Thanks for having us. 

[00:33:46] Jason Hull: Cool. So if you are a property management entrepreneur, you want to add doors, you want to grow your business, you're wanting to scale, check us out at DoorGrow.com. We've got an amazing mastermind. And if you're wanting to get to the next level in your business, You're not got to do that by doing it alone. It's time to start getting connected, reaching out, and not being that entrepreneur on an island. There's lots of people playing a similar game as you and you should be connected. So reach out to us at DoorGrow. We would love to help you grow your business. You can check us out at DoorGrow.com.

[00:34:18] 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! 

[00:34:45] 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.

Jun 14, 2023

Do you feel confident about your current maintenance processes? Maintenance is an area where plenty of property managers struggle with client satisfaction.

In this interview, Jason speaks with Ray Hespen, CEO and co-founder of Property Meld about how tracking key metrics can be an incredible way to identify areas of improvement within your maintenance process. In turn, this can improve resident satisfaction, increase owner retention, and lower maintenance costs.

You'll Learn...

[03:40] How Metrics Can Help You Improve Client Experience

[09:35] Maintenance Analytics you Need to Pay Attention to

[14:50] The Maintenance Hierarchy of Needs

[21:47] A New Tool for Tracking Maintenance Stats

Tweetables

“Oftentimes it's really hard to see what you need to fix next until you progress to that next stage and stuff breaks.”

“In most areas of business, there's a lot of myths and ideas around what creates a good experience or what actually creates retention.”

“Just because they don't love you doesn't mean they're going to go shout from the rooftops nobody should work with you.”

“Anything that can be done too little can also be done in excess. It can be done too much.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Ray Hespen: We've got a really amazing product that's dropping in the middle this year. I think it'll be industry shifting, but it's actually providing the visibility to where you're at on the ladder and what you should be working on. Not just you, not just company X and be like, "how do I think I'm doing in my own little paradigm," but like, where am I at against my competitors?

[00:00:19] Jason Hull: Welcome Doorgrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses.

[00:01:03] 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. 

[00:01:21] So my guest today is Ray Hespen, CEO of Property Meld. Ray, welcome back. 

[00:01:29] Ray Hespen: Hey, thanks so much Jason. Super excited to come back. This is always a lot of fun, so appreciate the invite. 

[00:01:34] Jason Hull: So just before we were in green room and Ray was flirting with me and telling me how good I looked since we last met. 

[00:01:41] Ray Hespen: Just a little bit. Don't tell everybody my secrets-- how do I butter up 

[00:01:47] Jason Hull: He's trying to feed my ego before the show.

[00:01:49] Ray Hespen: Well, I think the thing is I've been in the industry for about seven years now, and so that means you start to, like, you start to realize, you know, it's like I'm growing up here and you get to see your peers that grow up in there. And so, you know, sometimes when you don't see them for a while you'll be like, dang, you haven't aged as much as I have so good on you, you know? So. 

[00:02:07] Jason Hull: And I was saying, I was like, yeah, my my beard has gotten a lot whiter since you were less on the show. I'm getting it. So today's topic is going to be the importance of maintenance analytics in your property management business. And we're not going to run super long because, I told Ray, unfortunately, I have to pick up my daughter from school and that was just a timing thing, so we'll make this potent, but I have to say, Ray, I was sitting on a call with a client Jimmy K. I call him, and he was just saying how Property Meld has like, seriously improved his business. This is what he said, and we probably can share the video with you. I'm sure he'd be cool with that, but he was like, "yeah, I had two maintenance guys. We fired one of them and Property Meld and then we realized we didn't need a second person anymore."

[00:02:53] Ray Hespen: Oh my goodness. So that's basically the gist of it so. That's super cool. And I think the big thing about that, Jason, you and I are both in the business of trying to help other people deliver a better service. And sometimes, you know, what that translates to a lot of people is like, you made that job that much easier for somebody. It's like that hits, you know? Yeah. So thank you for sharing that. Yeah. That's awesome. 

[00:03:15] Jason Hull: We hear it. I told you in the green room, we hear it all the time from clients, like they love Property Meld. Like we're like, go try Property Meld. They do it, and then they become these like religious advocates, like missionaries because every one of our coaching calls, somebody brings up maintenance. They're like, Property Meld! It's life!" 

[00:03:33] Ray Hespen: Man. Gosh dang. See, like I told you, you looked really good and you aren't aging like you just returning the favor. That's really nice. Yeah. Thank you. 

[00:03:43] Jason Hull: So yeah, so let's talk about maintenance analytics. So one of the things I see is a lot of people, especially the 200 to 400 door plus crowd, They start to like freak out because they don't have a lot of profitability a lot of times. They were more profitable, they had more, let's say this, they had a higher percentage of profit margin when they were a solopreneur. Now they've got this team, they've got all these software, they've got all this stuff, and they're trying to figure out how do I become more profit focused? And then instead of solving all of the most significant things that would impact profit, they go and sign up for some sort of profit coaching system, and then they try and squeeze their team with more KPIs and more metrics and force more blood from the stone. When what I see a lot of times is they don't have a good team. They don't have good processes. They don't have good systems. They don't have good documentation. They have no planning system. So their team have no idea how to help and function and think like more like the business owner and like get things done and innovate and create. And so these are all the things that we'll help them install. And early in that stage, before any of that happens, maintenance is usually the thing we need to push them towards because this is like baby steps. Like you need to get maintenance dialed in and you need to get leasing dialed in. Now we can focus on the team because those are things they need to get down in maybe even before they start to build a team, when they're doing it themselves, around 50 to 200 doors, depending on how crazy they get.

[00:05:14] Ray Hespen: Yeah. Well, and I think one of the challenging things is oftentimes you know, both of us are business owners and so oftentimes it's really hard to see what you need to fix next until you progress to that next stage and stuff breaks and you go, "oh!" Obviously being able to know some of those challenges ahead is a superpower. But I even think the scaling element depending on your market type of class of property you're doing for you as an entrepreneur, you know, a property manager might be like scaling up and you know, maybe because they're the most amazing salesperson in the world, they're crushing it. Their problem might be sales in the future cause they can't do it right, or that might be solved. They might have somebody else there and they don't have a rockstar coordinator that's doing it. So it's super hard in that. But I completely agree. I think making sure that you've got measurables to at least understand the health. What's red, yellow, and green? Not sitting there forcing and saying "it's red, make it green," but just knowing that it's red. And then what do you as a business owner are going to do people process training to like address

[00:06:14] Jason Hull: it.

[00:06:14] Yeah. I love that. I call it the stoplight strategy. We just keep it super simple. We'll ask our clients on coaching calls, we'll just say, "who's, you know, red if you're in crisis or having problems. Yellow, if you're a little fuzzy and confused on what your next steps are. And green, if you're in momentum." And people know right away they're like, "oh, I'm this color." And then we're like, "why? Like, tell us why, and then we can't help you out." So, yeah, I like that. All right. So Ray, what sort of maintenance analytics should they be paying attention to, and how are people trying to do this if they're trying to do it without Property Meld?

[00:06:46] Ray Hespen: Yeah, so, and I think I'll kind of just kind of talk about the high level just about it. And you talked about Miserables and KPIs. I think a lot of the times, like, you know, especially you talk about growth a lot of the times, understanding how many leads you're going to get, the quality of leads, your conversion rate, the onboarding success rate, like a lot of those times, those are metrics that you sit there and go, how healthy is my process? Whereas a lot of the times I think maintenance, the big challenge about maintenance is like that metric of how we measure ourselves is oftentimes like, how many angry phone calls do I get? How many negative reviews did I get? And those are really hard to manage cause they're so lagging. Yeah. And so one of the things that we're really trying to get the industry really bought in, and we've spent a lot of time trying to understand these, is like get more crystal about what are good lagging. Getting yelled ats, not a good lagging indicator. A business owner may be shielded from getting yelled at, and so how are they supposed to know how maintenance is going? Resident SAT is a big one and that's probably the easiest one. There's some profitability stuff too, depending on, you know, making money on vendors or whatever. 

[00:07:51] But resident SAT's a great one. It's just a great one that everybody needs, because if you hang onto a renter, they renew the lease, the investor's happy, they stay with you longer, you keep making money. So it's a good one. But I think one of the things that can be difficult is like, how do I impact that? How do I make resident SAT better? So now if I'm measuring it, and let's say it's a 4.1 and I wanna move it to 4.4, and you say, team, I need you to move it to 4.4, they'd be like, great, are we nicer to them? What do we do? Do we send gift baskets? And so I think that's been the big black box of maintenance is how do you impact certain metrics? So I always give the analogy, you know, like, say one of us is sitting there going, you know, I'm really trying to tighten up my budget. You know, I'm getting my credit card debts too high, like, as a human being, right? Take this out of business. I'm relating it to another example. And we sit there and be like, I need to get my credit card debt down, my spending's out of control against my income. Like we have a lagging indicator, which is our bank account. That tells us that now if I were to sit there and do that, the tools that I'm available to as a consumer to understand what are the things that are breaking and what are the things that I'm spending all my money in and what things do I have to move to ultimately move my outcome, my racking up a credit card debt is actually really easy. You run your bank, you go to Mint. There's like tons of tools that will tell us, here's where you're spending all your money. And you can say, all right, I'm going to go fix that. So now if you take and get that to maintenance, I think that's the big challenge is doing that. So we've started to really put together some of those metrics.

[00:09:27] And so one thing that we're super heavy geared up in is leading indicators. And then as business owners, what behaviors are you expecting out of your team to drive those? So I'll give some leading indicators, just some really quick and easy ones that I think are really easy. Speed of repair, probably one of the best ones. Track your speed of repair religiously. Bonus points if you can track it by the stage, how long to a sign, how long to schedule, how long to complete, how long to get the invoice, all those things, right? Track that. Yeah, that's a great leading indicator. And then as you can monitor with the team, that's when you can start to think about as your organization, what sort of behaviors are your team members doing to impact that? We always respond to incoming maintenance requests during the daytime within 15 minutes. We're always assigning. We're always structured, you know what I mean? So it's really about connecting those dots to lagging, and that's where a lot of the data and information has been missing. And most people, one, won't even be able to tell your rent SAT, lag indicator, to much less. What are the contributing elements to that? 

[00:10:32] Jason Hull: You know, that's interesting because in most areas of business there's a lot of myths and ideas around what creates a good experience or what actually creates retention or what creates things, and then the data says often it's not even true. So, for example, one of the, you know, when it comes to client retention or client success, or decreasing churn for SAAS or for coaching or for any business, the big mistake most people think is if they're happy, they'll stay a customer. And that's not true. Like we've all had happy customers leave. They're like, "oh yeah, I love it! You guys are the best and you know, and we're going to go do something else." it's not related to whether or not they're happy or sad in relation to you. For example, for client success, it's just related to whether or not they see a future involving you. That's really it. They could be miserable, but still see in the future that they want to be working with you or that they need you, or that they're working with you or whatever, and they will still stay a customer and some people are just always miserable, right? Yeah. So, you know, sometimes things like net NPS are not super valid, right? Net promoter scores, sometimes because you're like, okay, well if they're not a true promoter, they must by default be a true detractor, but that's not always true. Just because they don't love you doesn't mean they're going to go shout from the rooftops nobody should work with you. 

[00:11:52] Ray Hespen: That is so true. And you know, one of the things that we've been really disciplined in studying, because we've got around 450,000 units on our platform, we process around 1.7 million service issues and we collect immense amount of data and information that we've been trying to like, study some of these behaviors. So I'll give a couple of them because I think this is really good. And Jason we actually studied on service issues, we started to map all sorts of behaviors because Property Meld's an amazing communication tool as well. How much communication happened, speed of communication, all these sort of things. Like we can't measure like how good your bedside manner is in communication. Not yet. But we would sit there and map that across. We'd map across kind of responsiveness we would map all that sort of stuff. We actually saw no correlation to resident sat and communication as odd as it is. Now, we know that it does, in ways, way more nuanced. It's not just, did you do the thing, it's how you do the thing clearly, because it's not as quantitative. But the thing we definitely did learn is ultimately that speed or repair was the number one largest correlation to resident satisfaction. Number one by far. Even in Property Meld, I think I was, I released some of these stats and data on our LinkedIn and stuff like that around, you got three days for an HVAC, you got four and a half days for plumbing, you got five days for an electrical before people start getting really cheesed off and you lose your chance of getting a five star.

[00:13:11] But we've also discovered the same thing in investors you mentioned. Are they happy? Like what's my. CSAT score, it's customer satisfaction score. And what we ended up realizing, because we have around when we did this study, we had around 190,000 investor owners on the platform. Most of our customer service, the, you know, accidental landlord segment, some institutional as well. But the number one correlation we could find there, Jason out of everything. There's some interesting stuff there. We could dive into it more. But the number one is how much in maintenance costs are they spending annually against rent roll? Keep it under 12%. That's the magic. And you know, so that means like you're trying to keep turnovers down. That means you're trying to be competitive with money. And that means if you've got technicians are doing enough jobs per day that you're not getting, you know, roached on it. But the biggest correlation is keeping their cost down. Exponentially increase to the chance of risk if you get above 12%. And these are people that are not crunching a calculator and do an NOI calcs every month. There's a gut feel where once 12% happens and they say, Hey, I like you property management X. You're really great, but this doesn't seem like I'm getting a lot of money back. I'm going to go look for other options, so. 

[00:14:25] Jason Hull: Yeah, that's interesting because there's kind of this trend of nickel and dime fee, like fee max, fee maximization, fee, fee, fee. And there's a point in which anything that can be done too little can also be done in excess. It can be done too much. And so it's interesting that, you know, related to data, it suggests that you can go too far and then it's going to start hurting you. 

[00:14:50] Ray Hespen: Yeah. And I'll even tell you one of the things and I don't know if your viewers are super interested, we started actually kicking out this thing, like, are you familiar with like Maslow's Ladder of hierarchy?

[00:14:59] Jason Hull: Hierarchy of needs? Yeah. 

[00:15:00] Ray Hespen: Yeah. So somebody joked one time. And I took it to heart cause I thought it was actually quite brilliant. They said, is there one of those for maintenance? Kind of seems like there is. You know, if you think about Maslow's Ladder, it's right. You got food and water and there's a measurable there if you want to keep that.

[00:15:16] Jason Hull: So for yours, it'd be speed first. Like, just get the problem off my freaking plate. Like, get it done. 

[00:15:23] Ray Hespen: Well, I'll break through it a little bit. If you want to check it out, you can download the image on our website. We're pretty proud of it. And it's not Property Meld applicable. It's anywhere applicable. Okay? But it's the concept like a Maslow's ladder, right? You got water and food, right? If you don't have water and food, you're going to die and you need to go to the next thing. And then what happens is then once you go to water and food, then you go up the next one, and that's shelter, security, all that. And once you go up that, it's like recognition. Then once you go back, it's purpose. And I'm probably butchering Maslow's Ladder, but the concept is as human beings, we have to get the previous need met before we move to the next need. And so we actually started building this for maintenance. We call it ladder maintenance excellence. 

[00:16:02] And really it starts down at communication. Communication's critical. You can't do anything else without getting good communication. But once you get communication mastered, that's when you start to get to scheduling efficiency. And we have metrics and stuff of how to do it. Then once you get to scheduling efficiency, then you can get to staffing efficiency because you know how many vendors you need, how many technicians you need, how many coordinators you need. Then once you do that, you can start doing really cool stuff of really driving preventative repairs and it goes through all the way to the top, which is you know, basically creating predictable NOI for investors. And it connects how all that marries together. But the reason I say that is along the way, it's how do you know you're ready to move to the next? And that's really hard. Where are you at in the ladder? If you're thinking you're up here and you're down here, it's like, go down here and fix this, then build back. Yeah. So anyways. 

[00:16:50] Jason Hull: There's a similar pyramid and I'm trying to remember the name of the books. I think. I'm doing a quick Google search here, but I think... so there's this pyramid and it's called the customer satisfaction pyramid. I think it's from a book. Yeah. Called First Break all the Rules from the Gallup organization that does the Gallup polls. And it was a bunch of research they'd done, you know, on businesses and when it comes to the customer satisfaction and the pyramid, they had these four levels and the lowest level was availability. It was like, just answer your freaking phone. Or I usually use the waiter analogy, like, if the waiter's at a restaurant and he is never available, you're going to be pretty upset. The second level is accuracy. Does the waiter bring you the right food? And if the waiter does those two things perfectly, if a business does availability and accuracy perfectly, you don't even notice they exist. Yeah. It's not like you're like, "oh my gosh! The waiter actually brought me my food and actually came right and asked me what I wanted and checked in and refilled my water." You don't notice them. You're enjoying your guests or whoever you're with or whatever, right? Yeah. Now, the next level is where people start to pay attention, and most businesses are failing at availability and accuracy. The availability is low. They don't have Property Meld. They're not answering their freaking phones. Nobody can reach them like you'd be surprised. A lot of property managers-- you wouldn't be surprised. But some might be surprised. A lot of property managers don't even answer their phones. They get a lead and they follow up with it like a day or two later, right? And then so after availability and accuracy, there's partnership. This is like, "Hey, I'm in this with you." Like, we actually have a desire to help and we're going to work with you to make this happen, this partnership and the next level beyond that, in customer satisfaction where you're, it's beyond partnership is a the advice category. Now you're an advisor. 

[00:18:43] Now, they trust you as being somebody in a superior position of knowledge or information where they're going to, you know, acquiesce their own will to you in some instances. And so for property managers, partnership's, good. But if they don't perceive you as being an expert or knowing more than them, then they're going to micromanage you at times, they're going to be a difficult client. And so that highest tier is advice where you can now give them advice and you're educating them and they know that you know more than them about some of this stuff. But if you do the first two, a hundred percent, you're a hundred percent available, a hundred percent accurate. Your clients won't even notice that you exist. They'll just not get angry. 

[00:19:23] Ray Hespen: Do you know, I think what's so great that you said, and I think it marries up so well, we focus on those next steps without coming down and going, "I got to get some foundational pieces." And it just keeps toppling over and breaking. So that ladder, Molly posted where that ladder is. If you wanna take it, you got to just scroll down on the page a little bit. I see. But like the big thing is there's a lot of people who sit there and go, "we're going to get staffing efficiency, like nailed down. We're going to get it, here's how we're going to get it." but like, What's happening is you have can break down on communication the way that you can tell us. If you look on the left side of that ladder, happy residents tell you if you need to go down the ladder or up, right? They're kind of like your limiting force, right? And there's a point where they quit to matter. It starts to matter to the investor. And so kind of like your analogy is like a lot of people will start up a bit higher, probably the one they should. And it's like you got to go to those first two because if not, If you're not available and you're not accurate, there's no way that you can be a partner.

[00:20:19] Jason Hull: Yeah. It doesn't matter. Yeah. I mean, let's imagine the waiter, right? You have this waiter and they come over and they're like super charming and they're charismatic, you feel like there's partnership. They're giving you great advice on what to eat, but they never show up to give you your fucking drink. And you don't have silverware yet, and they bring you the wrong food. This isn't right. It puts you in, you're in so much discomfort in having to relate now to another human being to express that they didn't do it right. You're frustrated. And so, yeah, it's absolutely true. Like most businesses, if they just did what was expected... I think most of the research indicates people don't really want their expectations exceeded. They don't want their mind blown. They just want them actually met. That's it. 

[00:21:05] Ray Hespen: Yeah. I completely agree. And I'll even kind of marry back to the analytics and insights part that you were kind of walking through. Like you've got some measurables probably in the customer service thing that you can probably measure today and know. Yeah. And say, Hey, my response time. Like awareness, accuracy. There's ways that somehow that you probably do that partnership. You have a measurement or whatever that you can do there. Is that good? And like how much are you an advisor to people? Like are you consulting on how many houses they should buy or whatever. Like there's ways that you measure it, but I think that's the big gap for a lot of people, particularly in maintenance. If you look at that maintenance ladder, It's like, how do I know where am I even at? Which area should I be starting at and working on? And that's one of the big challenges about insights and we've got a really amazing product that's dropping in the middle this year. That's, I think it'll be industry shifting, but it's actually providing the visibility to where you're at on the ladder and what you should be working on.

[00:22:01] Not just you, not just company X and be like, "how do I think I'm doing in my own little paradigm," but like, where am I at against my competitors? Really important to know because at the end of the day, like that investor that's coming in and looking that resident is chances are, has the asset and your only competition is not your own picture of yourself or what do you think it should be, it's about the PM down the road. So it's about the institutional partner. Oh, go ahead. Go ahead. 

[00:22:30] Jason Hull: So let me make sure I understand this. You have a tool coming out and this is going to help people understand how they compare basically to other companies or maybe best practices in relation to data when it comes to maintenance coordination. You got it. So this is then instant analogy I saw in my head. Do you remember in video games, do you ever play a race car video game as a kid? Yeah. You play this race car video game. You see your score score at the end and then like you do it the next time and you're racing against the ghost car. It's either yourself in a previous race and you're trying to beat that time, or it's that ghost person that was some other player that you need to try and beat. So this, that's the ghost car. Having that data, you can see that other thing and you can, you now have contrast. I'm behind. I'm ahead. 

[00:23:18] Ray Hespen: A hundred percent. And I think one of the things that's so difficult, Jason, is like the fact that people don't know if they're working on the right thing or the wrong thing. They make an assumption because one customer gets mad at them and says, you're spending too much on HVAC costs. It's happening. HVAC invoices are up 43% year over year. Yeah. You know, and it's like, hey. And so the reality is everybody's natural instinct is, oh my goodness, that means my costs are high. When in the reality their costs could be actually below market and they're trying to beat the crap out of their vendor to get costs down. And if they don't know if that's actually broken or not, they could be working on the wrong thing. Oh, good. Yeah. And so I think that's one of the biggest challenges a lot of people have. The idea is it's not like, oh, how's it against me and my competitor? It's what parts of my business are we excelling at and what parts are we not? We need to know that so we can actually go point at it. 

[00:24:13] Jason Hull: This is brilliant because if the owner is pushing back on something and the property manager doesn't know, they don't have definitive data to know that this could be an issue or is not supposed to be an issue and is not, they then won't have the confidence to go to that owner and say, this is not an issue. It's completely in range. We have access to hundreds of companies data. We know where we're at, and we're actually a little ahead of the curve, so this is good. That gives them the confidence to go back to the owner and instill more confidence so the owner doesn't like quit or feel like they're being taken advantage of and then go down the street to another company where they get like, You know, railroaded. Even worse. 

[00:24:48] Ray Hespen: They're worse. Exactly. There's one example, and I'll just give this super quick here, is we had a customer that had an institutional client. They were getting beat up on price, and I asked the question, I said, where do you think they're getting their information from? I have no idea. And they're like, it's like this. And I'm like, we have more data than information about invoice costs of different kinds of things like. And that was actually part of the thing that spawned it was exactly that. Most property managers, some of them don't even own a home. How are they supposed to know how much a hot water heater costs? How are they supposed to know when an investor calls them and screams on what it should be? They don't know. So the only way that you can, just like you said, is enrich them with data to feel confident to go back and say, we're actually doing better. Or if it is bad, it gives an investor or you know, the owner of the business a good idea to say, Hey. We actually do need to work on this. Maybe we need to look at our our pricing structures or our network or whatever. 

[00:25:43] Jason Hull: So this is powerful because also for a property manager to go out and just try and get that, anecdotally, that would be viewed as collusion. That would be a dangerous thing. So now they're talking to other property managers like, Hey, what are you charging and what's going on with this? And so, good point. That's dangerous ground. And so the reverse, this is after the fact, and this is data. This is based on reality. And so you're just reporting on here's reality. But you're making it visible. Yeah, exactly. Solution. But it's helpful. Absolutely. It's good stuff, man. Okay, well I got to wrap up, but this is really awesome.

[00:26:18] Hey, thanks man. Appreciate you having me on.

[00:26:20] But yeah, everybody check out Property Meld. We still have that old link up if you go to DoorGrow.com/maintenance. Do you guys still get these? We send people to that. 

[00:26:32] I'll ask marketing. I'm sure we. 

[00:26:34] If you go to doorgrow.com/maintenance, fill out that form. And it's like a quiz to see if you could benefit from maintenance automation, which the answer is yes. Spoiler alert. If you fill that out, it will send your information over to them and they'll get connected to you. And I believe it says there's some sort of discount, so. 

[00:26:51] Ray Hespen: Awesome. Cool. Well thanks so much Jason, and I really appreciate it. Great way to go check it out. And if you wanna look at that ladder. It's posted in there, so you can see that. It's a lot of cool stuff there, so thanks for having me on. Always enjoy it. Thanks for inviting me, man. 

[00:27:05] Jason Hull: All right. Thanks for being here. Cool. So if you are a property management entrepreneur that wants to add doors, like we talked about in the podcast intro or the more important problem, you now are adding doors. You've got plenty of doors, maybe you've got 200 to 400 or higher. But you know deep down that adding more doors is just going to create more friction in your life. It's going to create more pain for you as a CEO. You're not going to enjoy your business more, even though you're going to make more money. You know it's going to mean less fulfillment in your day-to-day of enjoyment, less freedom, less of a sense of contribution and making a difference in the world. It's just going to burn you out, and you're going to feel less supported because you're just going to more people needing things from you and wondering, why won't my team think for themselves? Then you need to get into and check out our DoorGrow Super system. This is where we help you get an operations person in place. We help you hire, build out your hiring system. We help you get really good process software in place. We help you get really good planning software in place. This is where you now are able to get more fulfillment, more freedom, more of a sense of contribution, making a difference in the world, and more support in your business. The bigger you get, that's the right way to build your business. It actually should be getting better and better the more doors and more money you add because you have more resources if you're doing it the right way. And we want to help you make sure you're doing it the right way because that's not the default. I've seen inside thousands of property management companies. It's not the norm and it's the norm for our clients and we want to help you get that. So reach out to us. Check us out doorgrow.com and make sure you join our free community. Our Facebook group will give you free stuff. It's really cool. Go to DoorGrowclub.com. Join our Facebook group and you can learn more about us there.

[00:28:52] Bye everyone. 

[00:28:53] 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! 

[00:29:20] 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.

Jun 7, 2023

On this week’s podcast episode, we brought back a guest we’ve had on the #DoorGrowShow before, Joe Edgar from Tenant Cloud.

Property management growth expert, Jason Hull sits down with Joe Edgar to talk about the many new features that have been added to Tenant Cloud to benefit property managers and what is next to come for the software.

You'll Learn...

[01:35] An Introduction to Tenant Cloud

[06:44] The Different Systems PMs Need

[14:11] Integrating Different Property Management Tools

[17:36] Tenant Management and Roommates 

[27:43] Accessing and Transferring your Data

[31:55] Are Completely Remote Showings the Future?

Tweetables

“Listings are important because of course, as soon as you have a rental, what do you need? You need a tenant. Nothing worse than vacant property.”

“So there's a relationship in all of those that you really have to harbor and that's where making sure you're connected to your tenants and you're connected to managing service for them is important because then they will reach out to you to buy one where if it's a bad experience, they won't.”

“You're busy doing all this work, but then actually going back and making sure you're making money at what you're doing is often the last thing they look at.”

“You have two choices in life... You can be reactive or you can be proactive. ”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Joe: Because that's one of the hard parts is you're busy doing all this work, but then actually going back and making sure you're making money at what you're doing is often the last thing they look at. They worry about because they're trying to provide to customers, their owners. Yeah. And the tenants, good quality customer support. And so that's where it's the hard challenge and making sure they're all connected in a nice, easy way. 

[00:00:20] Jason: All right, we are live. Welcome DoorGrow Hackers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management 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. 

[00:01:25] All right, so my guest today is Joe Edgar. And Joe, it's been a while since we've had you on the show here, so. 

[00:01:33] Joe: Yeah, definitely has. Glad to be here. 

[00:01:35] Jason: So Joe started a company called Tenant Cloud. And today you're going to be talking about property management and real estate technology in 2023. So, Bring us up to date, man. 

[00:01:47] Joe: Yeah, it has been a while since we first launched, I think back in 2016 was a real focus on the DIY landlord and trying to support that general group. And as it really has grown into-- our biggest following is now really property managers focused in the single family rental space. So, that distinction has come down to really the difference in logistics. And so, as many know in property management, if you're managing multi-family, then you usually have somebody on site, but if you're managing single family rentals, there's just too many properties. And so Yeah. Ends up being a logistical nightmare. And so that's really where we end up fine tuning our solution is all around the logistics, managing those single family rentals and helping you grow your business. 

[00:02:30] Jason: Cool. So what have you been up to since then? I'm sure you've made some updates to Tenant Cloud. 

[00:02:36] Joe: Yeah, there have been a lot of updates especially since then. I think some of the best things that really help a property management company really get going is the fact that you can sign up for Tenant Cloud and in just a couple of minutes for free. There are some paid solutions, but just on the basis of free, you can set up your own company website. From your company website, you can have its own listing portal. So all of your listings that you're going to manage, it can have applications and so tenants can find you. They can apply for a rental. You can manage that application, you can send it back for more information. You can charge a management fee or not. Lots of customization inside of there. You could have multiple bank accounts. If you have different owners, you can, send an agreement to an owner have them sign it. They have their own portal so they can own their own reports. And then of course, the more traditional stuff on top of that, which is, just managing the property itself. Everything from maintenance to just general communication with your tenants. And so all those things kind of fit in there. I think the most fun thing that we have that really brings a lot of value worth mentioning is if you follow the industry, we're starting to see these silos and vertical step up. I think the biggest mover now is co-star who is looking to buy move.com, which is realtor.com. And so they're really trying to have that niche. And then Zillow of course, exists. And then you have Redfin who's putting together a lot of other sites. And those are all around listings. And so listings are important because of course, as soon as you have a rental, what do you need? You need a tenant. Nothing worse than vacant property. So, we built this thing. We have so many tenants that come to us. Our affiliate sites, College Pads, and Rentler, are all really bringing us lots and lots of leads. 

[00:04:25] So having all of these leads, we decided to go the extra mile. We said, what if we offered all of them the ability to basically say what it is they're looking for. And by telling us what they're looking for, we can then match them with all of the inventory of vacancies. And so we take users who are already, they came to us for the purpose of trying to find a home. And we have all these property managers who are trying to find tenants into their rentals. So we built this thing called premium leads, and really you could think of it as like Tinder for tenants. Okay. And so what happens is the tenant will put on what they're looking for. They're like, "I want Southwest Austin. I'm looking for, $2,500 a month, a two bedroom, one bath, a yard, a fence." Say the general things they're looking for. And the second you turn on premium leads as a landlord, it will take all of your properties, even if they're not listed, it'll have them already matched, but they won't see it. The tenant won't see it until you actually make it live by listing it. And immediately all of those show up for the property manager. So the second you turn on premium leads, you have potentially, like, I love turning it on because it's such a nice feeling to like list a property, immediately you have like 15 leads, you're like, "That's great," and you invite them to apply. So you just invite them to apply and that sends real invites to those tenants. So those tenants now got a personal invite from you and you can go through, the tenant goes through it. If they like the property, they can swipe left and ask more questions. They can fill out a rental application, maybe schedule a showing, anything like that. Or if they don't like it, they swipe left and they move on their way. 

[00:06:03] Jason: So they'll swipe right if they like it. Yep. And left if they don't, and then it's swipe left if they don't. Got it. 

[00:06:08] Joe: Yeah. So it's a very non-abrasive way to approach all of these different tenants looking for leads. And so it now is the largest lead generator inside of our solution. So we integrate with Zillow, we integrate with realtor.com, many of the Redfin solutions, but it now outperforms all of them. It produced about 60% of the leads on Tenant Cloud. Wow. So it's a really nice way to go and find and fill your tenants. So again, everything, it's really about bringing all of those things that you have to property management into one easy solution at a low cost, help you save time, grow your business. 

 

[00:06:44] Jason: So if somebody already is like knee deep in another property management software, can they still use the premium leads?

[00:06:50] Joe: Oh yeah, for sure. It's easy. I mean, that's what's nice is it's segmented off. We have a lot of property managers who do multi-family and multi-family is a different beast. We have a lot who hack us and use us for like multi-family, but as I said, the single family rentals has a logistics problem and I can explain why we're so different in that space. Sure. But when you get into multi-family we know where the space and we know the industry. And so if you're in multi-family more traditionally after one of those larger property management solutions, and most of that is in part because multi-family is 95% owned by institutional investors. And institutional investors need data. These large rates. And so we're not designed for that big stuff. We're really out to help smaller property managers kind of, grow their business and not answer to large rates. So the way the data flows separates us pretty substantially. And so that's what would make a unique thing. So on the logistics problem you have, maybe you have one maintenance person, but a lot don't. And so the key feature is if you were a property manager, you already know, it's like how many property managers can manage how many units? You have the math and it's generally around a hundred units per person. 

[00:08:04] And you can get some that are starting to get more efficient. They're getting into like duplexes and triplexes where they get down to, maybe the 85 to one. But normally about a hundred. And a hundred's a good number because if you're also a broker, then you also know I'm managing these properties because I know about 5% of them will bring me additional business annually. Either my clients are selling or my clients are buying, or my tenants are looking to buy. Right. So there's a relationship in all of those that you really have to harbor and that's where making sure you're connected to your tenants and you're connected to managing service for them is important because then they will reach out to you to buy one where if it's a bad experience, they won't.

[00:08:43] And so having a nice solution on their phone that they can easily sign a lease, they filled out their application, they can pay their rent, they can view everything that's in their power, is great. Then in addition, if anything happens, they can go to their phone. And there's four simple questions that breaks 1500 problems with a home down into four simple questions that are icon based. And so they select them and they can take a picture and a video and it goes direct to the property manager. And the property manager now has the choice because we can't say, not all tenants are accurate. Not all tenants know how to fix anything. And so, whatever they say the problem is, it could be something different. And so I've had this on my own experience where it's like, I find out the roof keeps leaking, but I'm like, you realize it hasn't rained in weeks. And you find out it's the air conditioner. It's like catching condensation. And so you know what they say the problem is and what it actually is is not always the case. And so it's nice. You get the maintenance request, you have a picture, you have a video, you have a small explanation if they wanted to add it to it. And if you have a service professional that you work with, you can send it to them or you can change the category. You can schedule it from there.

[00:09:50] And once you assign it to them, they can now communicate directly with the tenant, but you are privy to all the messages. And now they can schedule this outside of it. Or you can plan for them, but they can schedule outside of you having to do it constantly. Now, that's one method. It can also be if you're in a property management office there's one here in Austin I just talked to. They have 50 rentals, so they're growing theirs. They're managing on behalf of about 10 owners. And so that's not big enough on their level to have a maintenance person on staff. And so they contract everything. And so what's nice is inside of theirs, they can actually use it inside the maintenance request. They can get a quote and that quote goes out to all service professionals in the local area that can then send in bids on behalf of that. And you can run it in two different flows. You can say, "okay, well I'll make the decision," depending on what you have with the owner. Or you can send the different quotes to the owner to pick one of them.

[00:10:44] And so there's lots of different ways to manage that. But now once you connect them, you can then do the same thing. You're like, okay, I like your bid. You do it, I'll schedule you. You're in. And then you have privy. And then there's a way the tenant can say, well, it's not done exactly. And they say it is done. So you kind of do a lot before you actually have to go on site. I mean, when I was doing property management, the worst thing was most of the site visits are not what they said. And they're things like, "the lights are out," and it's because the light bulb is burned up. It's like, well, that's not, you just wasted a lot of time for me to drive across town. There's two hours of wasted time to do this. And so having those logistics are great. That's the heart of Tenant Cloud. But then on top of that, it's like, okay, well the logistic problem and getting on the phone and scheduling is tough. Then I got to account for all this.

[00:11:30] And accounting is the next piece. So when the tenant goes in and enters that, we have those categories of which they're selecting by icon based for maintenance requests. They're matched with both revenue and expenditure and capital expenditure categories inside the accounting automatically. And then in addition, you can keep track of any assets. And by that I mean if you have a refrigerator or an oven, you can store all those in. So if a maintenance request comes, you can actually look up any piece of equipment like a fridge and it can tell you, show you all the maintenance requests it's had. It'll find correlations like things. You're replacing this motor every year so you can make those decisions on like, we probably should just get a new fridge. But then inside of that, all of those are matched with the IRS 1040 Schedule E categories. And so what is great is you as a property manager who is going to be doing your 1099s at the end of the year. Your contractors, if you were to bid it inside the system, you can pay them and they can invoice you. So if it's someone you don't know, then of course they'll create an invoice for you after the work. But it's someone you do know and they just, you're figuring out what the bill is on the side. You can message them on the side or directly in the ticket, and then you can pay them directly. What's nice is when it comes to accounting time, your owners have a very clean, simple 1040 Schedule E already done for them that has all their costs laid out, that you didn't have to go back and do anything extra, has all the receipts matched to it. Each one goes all the way down. And each property manager, as a refer to, are these "additional opportunities." There's lots of ways, depending on how you have a relationship with your owner to set up those additional opportunities.

[00:13:06] For example, you could just charge like, I have a 10% fee on top of any cost for maintenance I do. And so that would be added into maintenance requests. So that's already being done. Or you could have it, we have a flat rate that we charge for tenants. I mean there's lots of ways to set it up for your property management company to make sure they're accounting for their revenue as well. Because that's one of the hard parts is you're busy doing all this work, but then actually going back and making sure you're making money at what you're doing is often the last thing they look at. They worry about because they're trying to provide to customers, their owners. Yeah. And the tenants, good quality customer support. And so that's where it's the hard challenge and making sure they're all connected in a nice, easy way. And everything kind of flows in a simple recurring way that is predictable and you know for sure how it's going to work is an important part of growing your business. And so then that passes through to the owners can fully see their reports. You have your reports for your 1099s and all of it happened behind the scenes without you really looking at it. So the heart of it is to be kind of a logistics and accountant, a back office person to help you, a small property management company kind of grow.

[00:14:10] Jason: Cool. Cool. So the maintenance coordination piece, solving that logistics challenge, can that be used by companies that are also using another property management software already? 

[00:14:20] Joe: Yeah. Sorry, I kind of went on a-- I digress. That was your question before. You can kind of go on and use whatever piece you want. So we have lots of larger ones who are doing multi-family and they have found that they get all our leads at Tenant Cloud. So they still use their traditional property management software to answer to the beast above them for accounting. Yeah. But they get all their leads and manage all their rental applications through Tenant Cloud. And for their business, they get to keep the application fee. And so it's nice because they can set all that up and so they run everything there. So all the applications you can do a background check, you can do a full one, you can do a partial one. So there's lots of different variations you can do in there. And so it's nice for them because they manage everything on there. Once they actually do a lease, then they actually put them in their other property management software and do it on there. And then some are slowly kind of converting into Tenant Cloud as it does more for them. As they see, they're like, well, why don't we just move here? But in a lot of the wreaths they don't. But on slower ones, yeah, you can manage just leads. 

[00:15:15] We have a really nice CRM tool built in. And so because we give you a free website and then we distribute your listing to so many different places, we set you up on a unique text number. You don't know what it is, it doesn't matter to you, but what's great is it does matter to someone looking at your rental. And so to find your listing on any site, and then, if I have a rental application, that's an easy one. I'll fill out the application that goes through the system and you get a nice, clean application. You can request more information, whatever you want to do. But when it's just a lead, which is how most of them come in. They'll send you a message and they can do it via text straight from the listing. They hit a number, they send you a text, and you can respond to them via text, right in your Tenant Cloud account. And so that's where you can take all the different messengers, have it in one place, nice and simple track notes, maybe it's, maybe the one they're looking for is not available now and you want to use it for later, so you just tag it.

[00:16:08] But yeah, there's different parts of Tenant Cloud that you can use for just different parts of your business, depending on what you're doing. 

[00:16:13] Jason: So what you're saying is on the tenant side, there's basically CRM for tenant leads and that you can manage that communication and you can do it through text message because the listings have that number on it. Exactly. And then on the maintenance coordination thing, which also sounded really cool that piece can be used standalone as well, is what you're saying? 

[00:16:31] Joe: Yep. Correct. Okay. Each one is really segmented Now if you use them altogether, of course, they just make life easier, but sure. But yeah, you really can use each little function separately. Now, if you wanted to come from another software, you can easily upload your data. So we have tools for that. And if you ever wanted to take Tenant Cloud data, this is one of the things, it has been our company's motto from the beginning, that we are not making business on holding your data randsom. And so you can easily take your data at any time you want and use it and flow it anywhere. And so some of those have been good. We have a QuickBooks integration, so that makes it seamless. But we have others who use some other unique accounting software, and so we've made that so you can just pull your data and put it in anything else that you want as well. So there's lots of reasons to have that, but that's an important thing before you use one, you're like, I want to know that I can get all my data out of it. because you're uploading images. Yeah, you're uploading tenant information. I mean, it ends up becoming your record retention for a lot of stuff that you're doing on a legal basis. And so it's important to have all that, but to also have access to where you can get rid of it on a digital form, but store it somewhere still.

[00:17:36] Jason: So if we were to look at the Tenant Cloud ecosystem or, system as a whole, we've got, the tenant lead sort of CRM in communication for taking care of the vacancy situation. We've got the maintenance coordination piece, we've got the accounting piece you've mentioned. What other major? 

[00:17:53] Joe: So there's tenant management. Tenant management is just one where you want to have all your information about each tenant. It may flow from the application but then once you have it, you want to message them. And so you could have tenants all on one street and you need to message them and say, "Hey, street clean, street sweeping on this date. So you can message a part of them. Or you may have all your tenants at large, you have a policy change you're going to do, or you may have two cities and you say, okay, in this city this is changing. And so just helping manage all of those tenants and having a place to keep both private and information that you share with the tenant is really important.

[00:18:29] So there are things like, for instance, if you enter an accounting or you send us something, it's nice to know that it's live. And it's also nice to know that they have seen it. And so when you have a message, you can see for sure that you see, as we all know a hard part, but a reality of property management is that you will end up in a court, every so often with a tenant. And so making sure you have an easy place to account for all your timing and what you did with a maintenance request. And all of your messages in regards to just your relationship in general in one place is really important. And so to be able to pull it out and show dates and to be able to show what was seen and what wasn't seen is really important. A nice, easy process to kind of print it out and, bring it to court. As you will know, it's a huge part. And unfortunately that's part of the business, but it is one that you really, if you're going to grow your business, it's an important part to have, early. So there's tenant management.

[00:19:20] We have a whole calendar scheduling piece, and that's really important because it's the next piece that I'll talk about is as you grow your property management business, in the beginning it's usually just you. And that's fantastic because that is definitely where you're like, I need to grow this. And then you bring out, and sometimes it's a significant other. That's fantastic if you can pull that off. Right. And so there's two of you, right? And often they'll use the same logins, right? Because they're like, there's two of us. So we're talk, we see each other enough that we'll do stuff. But once you have that first real hire, it's a different business. Because now you really don't have the same, it's a professional relationship and you don't have that same thing where you're like, we do need to, like who's doing what. Yeah. And so even though I say it's this calendar function, we have a team feature. You can go in and add team members and you can change all the settings for each team member.

[00:20:10] And so it could be like it, you can assign them specific properties and so they're only able to see stuff on properties. You could limit them from accounting, you could limit them from certain settings. And so there's lots of ways, depending on what the team member is. For instance, you could have accountant, you could have a property manager just doing marketing, and you could have someone who, does maintenance. So just depending on what it is. But what's great about your team function is now you have a way to communicate with them. So very easily in a chat you can press a hash sign and find any of your properties in a message, and it will pull that up and then have a link to it. And then at sign you can find any one of your team members. And from a message, you can make that a task. And so all of a sudden tasks are running for everybody. And as the master account, you can see all the tasks going through on the calendar, and then you can message, each other about different tenants or any type of messaging that goes on there. And so you'll find, and then the system itself will self-generate tasks for you. For example, ones you should, they're obvious, that is like, all right, I have a lease. I want to know two months in advance before this lease expires. 

[00:21:12] Tell me, cause I need to renew it. It could be, I talked to this tenant and they're going to schedule something, they send a message and from that message, they're going to pay rent two days late. But I get it. And so boom, you have a task, you're going to have those reminders come up. And so that's really that angle from trying to get the system knows a lot of the things that you automatically need to do. So they're already in there. For instance, every six months you need to check smoke detectors you need to do servicing before winter. There's cleanup. So all those things can be automatic inside of that calendar, but then really running inside the team function really brings it to work because now you mix that with your maintenance team or whether they're outside or not, but it's assigning them and it really becomes a magic. So we built this kanban board where you can manage a lot of those tasks, especially when you get more than a hundred properties and you're trying to grow your business. You'll know exactly what I'm talking about. You're just like, "ah, I forgot." So you have two choices in life. When it gets that big, you can be reactive. Or you can be proactive. So we have tried to build a system to help you be proactive. And that's, it's telling you before you think about it. So then you're like, "oh yeah, I totally forgot about it." I do need to schedule you that. You move it into the next kanban board, you assign it to this person, run it there. And so it's really a great way for a team to come together and trying to do property management. And so that's one of the features. There's quite a few features, but another one I'll mention that's worth noting, that makes us different than other solutions as well is when you go down to single family rentals, a lot don't know-- many in this area will know-- but universities are very unique in that universities have a higher density of smaller property managers managing around the university than non universities. And so if you get out away from the universities, you're into these big apartment developments and so they're slightly different. And you get into universities and there's quite a few property managers that just service around that area. 

[00:23:01] And so one of the struggles for the property managers is always how do they deal with roommates? And you have so many different ways to deal with a roommate. You could take one rental and I could rent out every room individually, or I could rent out the whole house and just say, okay, well I'm going to, I'll rent out the house to all of you, but each one of you are going to pay a specific amount. Or I can rent out the whole house, and I'm going to say, all right, I don't know. I don't care. You're all on the lease. However you pay, just get me the money. And so those are all very different structurally in how you set something up and it all the way down from receiving an application, vetting them, moving them in to sign a lease, and moving them out, holding deposits and the ongoing relationship. 

[00:23:42] They're all different. And so what's nice is we really have thought through a lot of those, and they're not just on roommates. So we're starting to see this happen now in older care centers. And so, assisted living of sorts, they are now doing a lot of roommate features. And so these are older care centers that are using us for property management software. However, they usually the tenants are self-sustaining, so they don't need a nurse. They're just living inside of a center. And so the same kind of features. And so a lot of this roommate functionality is taken off and then really during 2020, like, when Covid kind of happened, it wasn't as popular. It was a feature that we had built in and we we thought it was really aimed for the college universities as college pads, one of our partners. And so we had built that in, but really starting last year. And my own take is that real estate went so expensive that you're seeing a lot of roommates pop in. And so a lot of people are procrastinating moving into their own place. Rentals are taking off and people are moving in together. So now you see this over pouring. So the last report realtor.com did it. However it follows what Wall Street Journal did. That theirs was, there are 2 million households formed again last year, which means we are missing 6.5 million homes in the marketplace based on them. And if we are missing 6.5 million and things are so expensive, you are saying we have no choice that roommates are just over pouring into everyone's lives. So what they didn't think was is now a single family home, an apartment, everyone is now dealing with roommates and it's created software problems everywhere.

[00:25:24] One that we have already solved and thought through. That's a great feature because how you rent them matters. It's, it changes the entire relationship from being a customer support frustration. Like if they're each paying a separate amount and you're doing rooms, but you're treating it as a solution where they're all in the same one, you'll just mess up all, for everyone. And so being able to manage those on so many different levels is really nice because you can have separate leases. One lease that they all sign and they all share their invoice, where as soon as one pays all the rest of them see it and they can figure out how to pay. Or you can just say each one of you're paying and then somebody's else is out and they're done. Or you going to move one in and move mountains, move the deposit. So it becomes such a problem that it's one to be noted. But now in today's industry, were roommate renting is just a commonplace, so that's a feature worth talking about. 

[00:26:11] Jason: Very cool. Yeah. Cool. All right, so we've got the maintenance coordination, the accounting, the CRM for tenant leads, tenant management and communication, you've got the calendar scheduling, which sounds like kind of team communication, and then you've got the Roommates functionality, so, 

[00:26:29] Joe: so we have a whole document. So anything you can manage all your, so we have both PDF and from scratch. So if you want to build an agreement yourself, you can drop in, easy pop in auto fills on the template, or you can just add a PDF and build the template. We also have them available for every state and county if they're divided. So lots of stuff to do E-signature and create your own lease agreements and manage kind of all that in-house as well. And then notices, So you can build a template notice, send it to a tenant when you know, rent's due or something like that.

[00:26:58] Jason: Nice. Very cool. Yeah. Well, sounds like you guys have been busy so. 

[00:27:03] Joe: Very busy. Yeah, it's been fun. Yeah. 

[00:27:06] Jason: Very cool. Well, yeah, I can see how this would stand out from some of the property management software. Now you had mentioned that people can migrate from their existing software. So how difficult, because this is usually really painful for people, Yeah, to transition. I've seen people go from AppFolio to Buildium or AppFolio to Rent Manager or switching to Propertyware or Propertyware to AppFolio. Like, so how difficult or easy is it to switch from one of these to Tenant cloud and are there some that are easier than others?

[00:27:42] Joe: No. So we've tried to make it as easy as possible. So what we do is we give you a template. So if you go into upload, you can find the upload and then you download a template Excel file. And basically you'll take whatever data you can get. That's the hardest part really isn't so much setting it up in Tenant Cloud. It's more other companies aren't so willing to just give you data. And that's the hardest part is that if you can get the data from them, we give you a template that's really easy added in and once it's in, you're done. Your tenants are set up, all their information is set up. The lease is set up. If you have late fees that are in there, they'll be set up. All of it will be done. Your property will be set up and you'll be live and it'll be working. But it's all, it's really more a problem of like, which software relationship are you trying to get out of? That's a hard one because for us, and we have many that call and like, " well I just want all this!!" And we're like, fortunately Buildium won't give us that data. We can't call them on behalf of you. Yeah. So the only thing we can do is like they can give it to us. Yeah, exactly. So that's the hardest part in getting in, helping people migrate. Is just being able to pull all the information. They spent so much time, putting in another software but on our end, it's really easy to kind of set it up.

[00:28:52] And that's the heart of it is because everything is connected. It's helping you do each phase of your life. Because if you ask a property manager, like, what's the hardest part of your job? Well it really depends like one on the season, on the time of the month, and what stage of the property is in. Because if it's vacant, of course it's like, I need a rental, I need leads. I got to find this. But if it's, if they're all rented, well now you're like, oh, I got fridges breaking everywhere. So it just depends on the job. So the software's always set up to help you in all of those sanctions of your life. And so uploading it is really easy because it connects to all of them automatically and you're kind of done. But yeah, again, the hardest part is getting the information. So, yeah, I wish I could say that was really easy, but that's a part we don't usually get to touch. So. Cool. 

 

[00:29:35] Jason: Well, Tenant Cloud sounds pretty cool. I have not heard of too many people using it yet, and so I'm really interested in getting some feedback. That'll be really interesting to see. So it sounds like you guys have really been innovating in the space, so. 

[00:29:49] Joe: Yeah, we've been trying to keep it as affordable as possible and get it going. We now have over a hundred thousand active property managers and landlords. Using it and over a million tenants. So it's been fun, but you'll look at how big the market is and there's 15 million DIY landlords and something like 18,000 property managers. And, it's a small slice.

[00:30:11] There are many out there still using, Excel or, a back of the notebook to keep track of stuff. So it is more about getting the word out there and let them know that there is a nice, easy solution to use. 

[00:30:21] Jason: Yeah. Very cool. So, now if they have a website, like say from us third party website or their own site or whatever are they able to get the rental listings? 

[00:30:31] Oh, I love that you said that. Yes. 

[00:30:32] An embed code to put into their site. 

[00:30:34] Joe: Yep. So if they just give us, they can tell us now, I will give you a quick hack so there's a quick hack, but then we can also help them do it. And so the quick hack is we give you a free site and if you have a listing link, so if you just relink that listing of yours and use Tenant Cloud, it'll automatically go there because it's the relink. Right? However we can help you customize it. So the free one we give you is going to be an extension of Tenant Cloud, right? Yeah, it's our free version. But if you want us to host it, we do have to be given the credentials, but we can host it and then you'll have an active live site, and then there are parts of it you can turn off or turn on. So you could use, if you've already built one, you say, I want to host this, but I still want the listings on my native site. We can do that for you. We have quite a few that do that. So, and the listing functions nice. It gives you a map, it'll show all your rentals. So you have a sub thing that you can click and, see a preview and then you go to the full listing. And then on there is really where the CRM powers because it says, 'do you have a question?' Or it'll be like, 'schedule a tour' or 'fill out an application.' And so each one of those, so if they schedule a tour or have a question that goes right to your CRM. And so that's where you can respond to them how whatever format they want to respond. If they give you email, you can do email. If it's text, you can do text. Or if they create an account, they can talk actually through the Tenant Cloud app. But then of course they've got an application, it forces them to put that behind some closed information just so they're not 

[00:31:55] Jason: I'm seeing some-- put it out-- Smart property managers switching from doing one-off showings for every vacancy constantly to doing open house dial. And is that possible using Tenant Cloud? 

[00:32:08] Joe: You can schedule them as open house, but what we don't have and that what we want to do, and this really came about from Covid, is we've been working with a company, so it's coming out here in the future, but it's not there. And that is to be able to do remote showings. So the remote showings are slightly different than open house. What it is soon you'll be able to have where you set up, it's a door lock, it gives a specific code to a phone, and then there are two cameras set up in it, wifi, and then so you have control of all the doors and you have a camera view. And so someone can go in and quickly get a text number that's going to be live for 10 minutes and you can literally watch them. And give them a short tour before they go out and you can secure the place back up and know whether any new windows were left open or any doors. And so you like, do those. So that's been more of the answer we've done just because it is, if you do the open house it there, there's a lot of things that require onsite. So it's like, how can we help property managers again, with the logistics problem. Yeah. And logistics problem's the hard one because you go, you list the property. And half the problem is like only 50% of the people show up showings and you drove a long way to get there and you're like, Ugh. And so yes, to get as many people at a specific time is great. And so you can kind of set that up with your calendar. That's easy. But the real heart of it is like, how can I show this and actually just be right here on my computer? So I could do five showings at the exact same time from my laptop. And that's really the heart of what we're trying to get to, is that you should be able to do that during business hours, know that it's locked up and know who it is that went into the rental. And so that's part of it. They have to get verified in order to get a code. And so they're using their phone as part of that process. There's a picture and an id check as well. And so they're verifying themselves, which just helps keep honest people honest when they're setting up and doing a rental. So you're kind of doing a bit of vetting as you set some different things up. So, so that's more of where we're trying to go, is trying to get more remote. 

[00:34:04] Jason: Cool. Cool stuff. So, well, I think everybody should go check it out. How can people get in touch with you or learn more about Tenant Cloud?

[00:34:13] Joe: Yeah, I'm always easiest on Twitter, so, @Joe_Edgar_ , always accessible there. Tenant Cloud's the sites, t e n a n t c l o u d TenantCloud.com. And you can find us on all the social media. But yeah, definitely hope to check it out. It's, like I said, we have a base version that's free and then, other features that come on top of that. You can set up your bank account. Receive applications, list your property, move in a tenant, and collect rent online, and that's all free. 

[00:34:42] Jason: So, Cool. Very cool. Yeah, I think that was the first episode we did with you. You, we were talking about how I think software for property managers will be free someday. So. 

[00:34:51] Joe: Yes. I honestly think it's going to go that more and more features are coming to where it's like, the more of your business isn't there. Like some of the stuff I hope we get to, and I'll mention this just because more of the viewers are property managers, but if you remember that I talked about the maintenance request function and getting a bid. Well, I'm no stranger to property management. I own a couple of property management companies. And built the software off of that. And I know in our, one of them is fairly large, and so we have a maintenance crew, we have a turning crew, we have a painting crew. We now even have a a cabinet crew. We go through so many cabinets. We're like, we just need to build these ourselves. And so we have all these different crews and they're just doing us. But one of the biggest costs is the downtime. And so for them it's like each one of them is a side business. And so it's like we've been trying to like think of ways there, like how can we grow this? And I know I'm not alone. And so what we're hoping to get to is that all the property managers who use us are. They'll soon have a little flip that comes up that they can turn on to now get leads. And so they will be part of the ones like saying, Hey, we have a service that does carpet cleaning. And so inside of my normal property management, now I can actually go and service people outside of the properties I manage if I want to look to expand some of the businesses that I've now created.

[00:36:10] And so, and it's unique because property management is different. Like if I go and if I say to a property manager, Hey I have a property I need to do a turn on. They know exactly what that means. And there's not just one contractor outside of property management that could do that. And so property managers are in a unique space where they're like, well, I know exactly what you need. I need to go do an inspection. I need to check the carpets, I need to check the walls. There's probably going to be some painting. I got to do a little plumbing. I may even have to do some hvac, I'm going to have to do a little landscaping. And all of that's tied into it and owning a property manager has built out some of the functions to be able to service that. It's not all the property management companies, but quite a few of them will do it as they grow, just because they're like, well, we're now in-house. We're doing enough of them. I've got one lawn mowing guy that's running or something. So, so it's a nice feature that we hope to really bring out to embrace our own customers, helping them now find and grow their business in other unique ways they never thought about. So. 

[00:37:05] Jason: Awesome. Very cool. Well, Joe, thanks for being on the show. Appreciate you being here. 

[00:37:10] Joe: Oh, my pleasure. Thanks. 

[00:37:11] Jason: All right, so check out tenantcloud.com. Sounds like it's really cool software. I'm really curious to get your feedback on how it compares to whatever else you've been using or what you're using for those that are doing research lately. So, let us know in our Facebook group. So join our free community that's available to property management entrepreneurs on Facebook. It is DoorGrow Club. The DoorGrow Club. You can get to that by going to DoorGrowclub.com and it will redirect you to our Facebook group. Answer the questions and join the group and we will give you some free gifts as well and that can benefit your property management business. And, check us out at DoorGrow.com. We are the world's leading property management coaching mastermind. We are helping grow and scale property management companies rapidly. We would love to help you grow and scale your business, figure out operations, make your day-to-day easier, and take some vacations, people. 

[00:38:05] Jason Hull: 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! 

[00:38:32] 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.

May 26, 2023

Are you aware of how much money you would need to protect and potentially replace all of the assets in the properties you manage?

Join Jason as he chats with Aaron Lombardo from North Star Reserves about what a reserve study is, and how having one completed can benefit your property management business.

You'll Learn...

[01:21] Who is Aaron from North Star Reserves?

[05:09] What is a Reserve Study?

[16:30] What is the Difference Between a Reserve Study and an Inspection?

[20:14] A New Concept: the “LIL Effect”

[33:50] How to Stop Your Clients from Micromanaging You

Tweetables

“Property's easy to manage. People are tough to manage.”

“Retaining a client, you're continually selling them on why they should be with you. It involves trust.”

“One thing that property managers incur too much is blame.”

“Each property is a business and it needs to be able to be maintained.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Aaron: what the reserve study really does is creates kind of an internal bank of their own funds and we help them manage a threshold so they can have a zero base threshold where they're just managing just enough in contributions to maintain those assets over long term or they can increase that threshold so that there's a nest egg if you will, a buffer or padding

[00:00:21] Jason Hull: Welcome DoorGrow Hackers to the # DoorGrowShow. So 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 DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not bebecause 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.

[00:01:21] Aaron: I went in and got my undergrad, my bachelor's in psychology. So I majored in family and marriage therapy and kind of the end of that I realized I didn't want to be in psych. I love it. I love people, but I migrated very quickly into the construction industry. And I worked for the third largest builder in the country and managed multimillion dollar budgets as far as from the building side and construction. Was recruited by the largest builder in the state of Utah and spent quite a bit of time with them working through kind of their ranks, managing, again, oversight on millions of dollars in purchasing materials, actually building the structures from the ground up. That experience led me into the general manager position with them on their custom home division quietly running this custom home division. They were really a track builder and they had all sorts of, different styles, designs and levels of building from commercial to residential, and they had this quiet custom home division that was really exciting. It allowed me to really apply my psych trade into sales, dealing really with high-end buyers and executors buying properties and interacting with those properties as investments and so forth.

[00:02:33] And ultimately that kind of landed quite a bit of interaction with building the actual communities themselves, HOAs, working with those HOAs. And then I had an opportunity to really jump ship and partner with a friend of mine in rental management. The short version is that he had a deal to buy a pump company fell out from underneath him after he'd literally moved across the country. And he kind of started by default just managing a rental property, a family's rental property. Anyway, long story short is he needed somebody to come along and help out with that, both on the HOA management and just generally the business. So, We ran this business, we expanded it over two states, Idaho and Utah. In the end, we separated. He took the rental management, I took HOA management. We both have grown those. I really enjoyed the HOA management side of it. It provided a lot of opportunities to interact with property managers as their competitors, but also with the boards. And so it was really by forced majeure that I had to take a deep dive into kind of the rental management, interacting again with real estate, which is where maybe my education wasn't, but my passion certainly was. And then I had an opportunity to buy this little mom and pop reserve study company out of Emmett, Idaho, and this was just a retiring couple that I had actually used their services several times in the rental and hoa management industry. And I just loved the idea of getting back into the budgets, but it afforded me the opportunity as well to get into the field doing site inspections for these properties while managing these budgets.

[00:04:08] And so I did, we sold the HOA management company. We bought this little mom and pop. We've grown it to eight states, and then we consult in several others. We're in multiple markets within, kind of these states and subsets of these states, destination stops and so forth. And I'll tell you what a reserve study is here in just a second, which is why I'm here with you, I suppose, Jason, but we do, reserve studies and site inspections for golf courses and country clubs high rises. We do commercial properties and strip malls. We do a lot of homeowners associations that have clubhouses and buildings that they have to maintain in streets. We've done some really cool townships where we've done entire, small cities or small towns, airports And and then water treatment facilities. So we, we feel like we've got a real, broad gamut of these things. These properties of different sorts. Some are owned, by a governing body like an hoa, and some are owned by real estate investors or owners that are looking to track their costs. And that's where the reserve study comes in itself.

[00:05:09] Jason: Got it. Cool. So tell us what is a reserve study?

[00:05:14] Aaron: Right. The magic question. So a reserve study is really just a 30 year outlay of all income and expenses and using that contribution is what we call it, a contribution of that revenue to reserves or savings to maintain and repair all their physical assets over the course of 30 years. So it takes in a lot of aspects of that, right? You have the revenue that comes in and we call that the contribution. And it's just a piece of maybe the property's total revenue and then that contribution will fund the future maturation of all of those assets from the replacement of the roof to the maintenance of the plaster in the pool ceiling on the streets, et cetera, et cetera. And so it really takes, the full gamut. It includes inflation and the cost of inflation that compounds over time. It includes the useful life is what we call it in the industry for each individual item, right? Not everything wears the same and not everything wears the same in different. Locations. Our California clients have properties, in Spokane and in Spokane. It's just a harsher climate. And so their properties weather different, and if they don't take that into account and really understand the nuances of that it catches them off guard because of the weathering that occurs in a different, in different places.

[00:06:29] Jason: Right. Just like cars in winter areas with the salted roads, the undercarriage gets rusted out. California no issue with that. So, That's right. At least not in SoCal. All right. So, cool. All right, I get that. So how do you go about doing these reserve studies and how does this relate to property management? I really haven't heard of any property managers doing this. I'm sure some do or should be. So tell us about that.

[00:06:58] Aaron: Well, so the truth of it is there's not a lot of well, let me rephrase that, a lot of property managers do that if they're, if they have oversight in an HOA or some sort of governing body. We break our service down into two pieces. There's the actual physical creation of the reserve study, and then there's the consulting on how to use the reserve study, our other kind of group of clients, aside from just HOA property managers. Are, owners and business owners. So, typically when we're working with a property manager on a rental property or a multi-unit property, it's usually the owner or, sometimes it's the CFO or CEO that's looking at this property from a strictly, revenue generation standpoint. And they're looking at their total expense load and we build that expense load. So it comes in two parts. The first part is really just the physical creation of the reserve study that involves a site inspection. So we perform a physical site inspection where we comb through every piece of this property. Let's use a high-rise as an example. A high-rise might have everything from a generator tucked into the parking garage to, common area, boiler units that are serving all of the rental units above, and the roof and the windows, and all of the pieces.

[00:08:07] In a typical high-rise, there might be 80 to a hundred components. That all have a varying degree of cost. Some of them need to be touched or maintained on an annual basis, and some of them you don't need to really worry about but every 30 or 40 years and those, long-term items usually have a significant cost that we're trying to help our owners avoid loans on.

[00:08:29] Right. They can essentially, Jason, what the reserve study really does is creates kind of an internal bank of their own funds and we help them manage a threshold so they can have a zero base threshold where they're just managing just enough in contributions to maintain those assets over long term or they can increase that threshold so that there's a nest egg, if you will, a buffer or padding that allows, far more flexibility on how to use those funds for the improvement of those physical assets.

[00:09:02] So the first part of that is just performing the site inspection, converting those physical assets into usable data, right? So we'll document every aspect of, the pool as an example, right down to the pool pumps. Pool pumps and pool plaster and the pool deck and the pool cover. I mean, there's a dozen components that maintain what we would, you and I would just call a pool, right? Yeah, there's a dozen components that would maintain that. We break those down, they all get a useful life. We convert that into data that has a useful life, a term for its expiration, and then a cost associated with that. In the process of that, we're contacting vendors, usually local vendors to that state or maybe that destination stop that town and city. So that we're finding out the local pricing and we plug that in commensurate to, their actual costs. And then we produce what we call a reserve study.

[00:09:55] And it's a lengthy report. It'd be a hundred page report. Half of that is usually a very detailed page over page breakdown of every component, what we discovered, what our actual site inspection uncovered. And oftentimes we uncover problems that they don't, and sometimes that their management or their maintenance men don't see. Their maintenance men have a tendency to look at certain high visual items where we're in the process of discovering from a construction standpoint. What are the forthcoming or future problems that they might incur? A great but terrible example, and this has brought the whole industry kind of forefront. Everybody at this point has heard about the Florida condo that literally fell, and it was a horrible tragedy. You've heard of that?

[00:10:38] Jason: I didn't hear that.

[00:10:39] Aaron: You didn't hear about that? All right.

[00:10:41] Jason: No. So when I was in Mexico and there was a hotel, or like a condo building next to one of the resorts we stayed at, and it won all these awards for design, but it like started sinking and collapsing.

[00:10:52] Aaron: Oh yeah that's a different one. So, so this Florida compound really a preventable tragedy and a terrible tragedy. So this had a pool on an upper deck. So it was like a parking garage and imagined large concrete with rebar columns underneath upholding that pool and the structure above it. And over the course of probably decades, there was corrosion from the pool. Now pool chemicals are just brutal on everything that they touch right, even the concrete. And over time they noticed some corroding that had leaked into cracks and fissures in the concrete and had corroded, the rebar, which is kind of the structural integrity of the columns themselves. Long story short is they didn't have the funds or reserves, right. They didn't have the savings, just interchangeable word with reserves. They didn't have the reserves to fund repairs. And after decades of that type of corrosion, the columns gave way and the whole pool inside of the structure gave. And once the structure started to give, it was a cascading effect. And multiple stories of this condo complex fell and killed people, and it was just a horrible, preventable--

[00:12:05] Jason: wow.

[00:12:06] Aaron: --Problem. Now that's about as dramatic as these circumstances get mind you. Right. Most of the time what we see is we see, gutters, for example, that are leaking off into the the wall and we know the cues and the primers that are kind of indicating that there's probably a leak behind the stucco itself. Right. Stucco's a permeable material. Yeah. But if it gets beyond the paper, behind the stucco, then you have wall issues and we see that. Pretty often where rain gutters are not skirting all of the snow, ice, and rain away from the building. So all of that's preventable If number one, there's funds to do it and if number two, there's eyes that can pick it up. So we help discover both of those. We help outline, highlight those potential problems and sometimes those problems in live. And then we help ensure that they have a plan of how and when those funds will occur in order to maintain and replace and repair all of those assets.

[00:13:07] Ultimately the purpose of any property is to maintain and increase the value of that property, right? No investor wants to get in...

[00:13:15] Jason: yeah.

[00:13:15] Aaron: ...and not come out on the back end, however many years that might be, and not earn a profit at some level or another, either from the sale of the property or for the ongoing rental of the property. And that can only occur if you're maintaining the property in a condition that it can do so, in my opinion, in optimal condition.

[00:13:33] Jason: So one of the things that comes to mind, so my wife and I like taking trips to Mexico and we've gone to some resorts in Mexico that have been around a long time, like decades. Yeah. And we didn't realize it because the rooms seemed new, the paint, but we saw maintenance people on this building. All day long, every day there were just people doing the grounds, doing painting, like everything. And it looked great. And then we just took a trip to Puerto Rico and we stayed at this modern kind of new sort of looking resort. I don't know how long it's been around, but it's already has rust coming down the white sides of the building from the top. They had some nets to capture, I don't know, maybe bird stuff or, I have no idea. Yeah. But they were torn and the room was mildewey and like, it just wasn't what it looked like in the pictures. It was just starting to show some wear and tear, and we were just kind of like, why don't they maintain it? Which was interesting.

[00:14:27] Aaron: Well, and this is the second piece of what we do, the consulting piece of this because we have conversations like this all the time. 'Well, I've got this property that behaves very differently than this property. Right? And how do we appropriate these funds commensurate to the type of building?' It really is dependent on the purpose. Like people, not any property is really identical. They're not used the same way. They're not used the same frequency. Yeah. They're not in the same climate zone, et cetera, et cetera. And I think of a similar building that you just described in Montana. So we did recently did a site inspection on this architecturally really fascinating building. And they kind of jammed it into the corner of two main intersections. Okay. And the whole building architecturally is steel. It's intentionally rusting, and it's intentionally that way to keep the maintenance low. That steel on the outside will outlive all of us. And so the maintenance won't be going into the exterior of this building. It was designed for a very low maintenance exterior. Now, the interior finishes are different. The interior, it's got this high end deck and you've got this neat garden area and, you get into the inside, it's got this, really nice elevator and all of these things require a high level of maintenance in order to keep functionality optimal for that particular property.

[00:15:42] We do some properties for investors that really intentionally just want to strip out and, for lack of a better term, it sounds bad the way I say it, but, we treat it a little bit differently. They want to strip out every dollar that they can because it's just not a high valued property to them, wherever it might be or however they might be using it. In which case we can put together a plan that. Creates basically what we call a baseline funding. It's a zero funding. It's just setting aside just enough to fund the needed maintenance to meet those financial goals. Again, being very intentional, right? I think most investors and executors fail when you have multiple properties and they start using funds from other properties to carry another or they're not intentional about the monies they're setting aside for maintenance.

[00:16:29] Jason: So let me ask a question. So I recently bought a house. I'm here in it right now. Right? And it's over a decade old and we had a home inspection and most people connected to real estate are very familiar with a home inspection. How does a reserve study differ from a home inspection, maybe on like a single family residential property?

[00:16:51] Aaron: Yeah, I'll be real candid with you, Jason. I think that the home inspection is very similar. Matter of fact, I have seen some really great home inspections where they will outline potential problems, right? That's the difference between maybe a typical inspector and a home inspector. An inspector might come in and they're going to say, 'okay, these are the things you need to do. These are the things that are really obvious.' A home inspector has a tendency like we do, to really get their hands dirty. They're looking for the little primers, the little cues that indicate that you have a leaking water heater, that the roof shingles are coming up on the ends and, stuff like that. And so I've been really impressed with some home inspections. The only real difference is taking that home inspection and converting it into datas, dollars, and timelines. So that's the difference. So when bought your home, you get a home inspection and it's left to you, buyer, to say, 'okay, well how do I feel about the fact that there's this, that and the other?' And you have to figure out a way to now negotiate that home inspection with your seller on what it means to you. What's the financial, consequence of that home inspection? We take it a pretty major step, but one step further where we say, 'okay, how long is that problem going to endure? When does it need to be replaced? And how much is it going to cost?' And then we build a report that actually puts numbers, dollars, and timelines to that. There's no more guesswork. The math now has a voice.

[00:18:17] Jason: Got it. Got it. Okay, cool. Now I can see how this would be useful for rental properties, which are not just a home to live in, but they are a long-term investment and they're basically, each property is a business and it needs to be able to be maintained. It needs to run well, especially if their goal is to have it accrue in value over time, or for it to be making them a certain amount of money each month. Et cetera. So, okay.

[00:18:47] Aaron: Now there's two pieces of that though, right? All right, so you've got, I mentioned in the beginning that you've got this kind of physical aspect the site inspection and then the data, and the vast majority, mind you, we don't shy away from data, but we also know how to read it. So when we produce a report, it's usually a lot to digest. And the second piece of that is, well, now what do we do with this data? How do I actually use this data and apply, and this kind of gets into the human element. So this is where it speaks to my psych degree, my salesmanship, if you will, which I just really love people. I think as much as we love properties and I do people, it's really what makes everything work. So now you've got to know, well, how do we take this data? And apply it to a property and in some cases apply it to manage the owner themselves. I'm not a hundred percent clear on your audience, for example. But if we just take a property manager that's managing to an investor, and I've been, in this circumstance, I've been that property manager managing to a CEO of a home builder that had multiple properties we were managing and they have certain expectations and sometimes those expectations are based on their feel, their gut feel.

[00:19:59] And it was always better to manage that executor, that owner, that CEO with actual math, with the actual numbers where I can push back without it being a gut feel on my end. So I have what I call the LIL effect, like coin that myself, LIL, like little, the little effect. So one thing that property managers incur too much is blame. When there's stressors, when there's misunderstanding, when maybe the profitability is not there. Yeah. Property managers inadvertently end up being the scapegoat for owners that have left the management to the property, but shouldn't be leaving maybe the profitability to the property manager. Right? So we have what we call the LIL effect. So, and the LIL effect simply is the first L is listen more to your clients. You'd be shocked Jason. How often as a vendor... so I'm usually brought in as kind of a vendor to augment what the property manager might be doing for the owner. And you'd be surprised how many times the vendor or the owner may call and want some specific details that the property manager, doesn't know or is fine deferring to us because we do some consulting.

[00:21:14] And then they open up about all sorts of problems and complaints and I'm constantly on the defence. I want to focus on the data and, not necessarily the complaints, but I'm a fly on the wall all the time. And one of the biggest complaints is that they're I think is that they're just not being heard enough. So property managers do a great job managing properties, but sometimes there's a pivot point that they miss with their owners, their clients, their executors. And so the first L is just listening more to the client. The 'I' that we have in the LIL effect is Intention, so being very intentional about building trust. I know a lot of property managers that are really good in the industry because they just, are honest and they just naturally build trust. But if they're not intentional, they leave so much of that trust on the table and they can build a lot of trust by being intentional. So the first L is for listening more to your clients. The 'I' is for intentionally building trust. In fact, an interesting story to go along with that. When I worked for a builder I was told at the very outset that there was an architect, very difficult to work with. We'll call him Brian. And Brian was impossible.

[00:22:26] Brian did things his way and he was just difficult to work with. He was the head architect, so everything had to run through him, and if you couldn't get it through him, you couldn't get it done. And I had to get stuff done through him as a fairly new employee with this builder. And I determined right in the beginning that I would figure out a way to earn his trust. And I decided early on that I would just believe everything Brian told me. I would just take it at face value, trust, the fact that he knew what he was doing. Now everybody knew that he was emotionally driven, right? And a fascinating thing came out of this, Jason, I learned over the course of, less than a year, took some time, but I learned over the course o of that year that number one, I earned Brian's trust by hearing him out, asking questions strategically, and being very intentional about building that trust. The other thing that actually was quite fascinating to me is that I learned to really respect Brian. I gained a relationship with him and I could get things done through Brian that nobody else could, simply because I'd been intentional and at the time it was kind of accidental intention. Yeah. And it was a phenomenal relationship that he and I had. He was pretty rough around the edges, had his way, but I had, I could bend his ear, unlike most people could because I'd spent a significant amount of time building that trust.

[00:23:48] Jason: That's interesting. I had a job working at HP and there were two of us on a team. We managed this software called Concentra, which was this workflow for all of their PDFs and documents for all their computers, printers, at everything to move through to make sure that there was some sort of quality. And it, it went through legal and it went through everything else. And so there were us two nerds and our boss was in, we were in Boise and our boss was in Texas. And I noticed he didn't trust us. He was always like trying to micromanage us and distrustful of us, and so I just started setting-- we used an instant message tool to communicate most of the time, so I just started changing my status. I'm like, how can I make him feel safer and trust me? So I had the intention. To build trust. And so, and the way I did that is I just communicated through my messenger status, showing what I was working on all the time, so he didn't have to ask me and say, 'Hey, did you guys doing stuff? Or what are you doing?' It just said, 'I'm working on this and I'm working on that'. And I would just update it throughout the day. He started to trust me and then he started to ask me about my coworker, what's he doing? Is he getting stuff done? I thought that was really funny. Yeah. Like acting like he'd-- this guy like didn't even know our names though. He like, eventually he just couldn't even remember our names, which is sad.

[00:25:02] Aaron: But that level of transparency, solves all so many problems before they occur.

[00:25:07] Jason: Yeah. So I like that. Yeah. Property managers need to listen more to their clients and they need to focus on the intention of building trust because really, I tell my clients sales and deals happen at the speed of trust. Yeah. In order to get clients, but keeping clients. Same thing, retaining a client, you're continually selling them on why they should be with you. It involves trust. Yeah. Trust goes, they go.

[00:25:33] Aaron: It does. And it really is about being intentional, right? Because again, I know property managers who are quite good at it, but they're, there's a difference with being intentional. Yeah. Being strategic.

[00:25:44] Jason: Yeah. because if their intention is just to do their job, that's not going to necessarily create trust. But if their intention is to create trust, then they're far more likely to do it. Yeah. This is interesting too becausewe have a tool we use with our clients so they can get more out of their day and we call it DoorGrow's Daily Planning. We have this daily planning exercise, and the goal is to map out, part of the daily planning exercise is to figure out what are all the appointments you have for the day, and then what intention do you have for each of those? Because we find just by having an intention and being clear on what your intention is with a particular outcome, you're far more likely to get the result ironically. So, if your intention is to go into a conversation and win, or create a win-win or to benefit them or whatever, you're far more likely if you're clear on that intention, then you just go into it and go, 'well, I have a meeting.' Right. Yeah. So, yeah.

[00:26:36] Aaron: Well, I couldn't agree with you more. It's so we've got listen more to the clients, right? So to finish the LIL effect, intentionally build trust. And the last one, Is really one of the most undervalued, and that's, listen to your trades. And I'm not talking about just hearing them out, I'm talking about like understanding, understanding their perspective. You'd be shocked how many, so I talk to trades a lot.

[00:27:00] Jason: Define trades. Are you talking about vendors that'll do work on property?

[00:27:03] Aaron: Yes. Yeah. Yeah. Your concrete guys, your maintenance guy. The, these are invaluable people that, sometimes I think property managers don't reach out to these trades. At the level they could because they see a guy that, you know, just for lack of a better term, just eats concrete for breakfast. He knows concrete. He loves concrete, he's really good at it, and they want him to solve a problem concrete related. But I can't tell you how many times I've talked to vendors, I'm usually gathering price and I can speak their language and I know all things construction from the ground up. So I can get into those conversations and as I do that, I've been shocked. At how many things they keep close to the chest because they've learned, and this goes back to kind of the psych days learned helplessness. They've learned that nobody really wants their opinion. They just want them to solve a problem. 'Solve this concrete problem, fix this tree,' whatever it might be. And so they have learned over the years to just keep those things close to the chest. But what they have close to the chest is often little golden nuggets of understanding of both property and profitability. They have ideas on how to turn a property more profitable in their little, bucket of trade, right? They're concrete or they're trees and, property managers are leaving some profits on the table, in my opinion, because they're not getting those vendors, not building the trust with those vendors to glean the little pieces and it goes back to, I forget the name of the book, 1% Better, where if you're gathering 1% better and you talk to 15 different, vendors and they all can provide you, you know even half a percent profitability better, suddenly you have a property that's 7% more profitable. That's incredible.

[00:28:46] Jason: Yeah. That's interesting. The last place I was in, we were renting and it wasn't managed by a property manager and the owner took two weeks to replace water heater because he was just being super anal and trying to figure out the best one. Basically a problem property managers can solve for people. And one of the plumbers came out and. He like was badmouthing the owner saying that he was being cheap and then he like, but the level of detail this guy was because I was just curious in asking questions because that's just my nature. He was telling me like, 'these type of water heaters, they last this long, this other one's going to go out soon. And if we put in one like this, I recommend it be this capacity because it's going to last this much longer or do this' like the level of detail he knew about water heaters. Brands of water heaters and how much, putting the right one in and what it could save you in the long term and doing the long term. I was like really impressed. Yeah, so this rings very true to me. Everybody that is really an expert in their craft. And this guy ran his company, so we were lucky that he was the one that came out, I guess. The level of expertise that some of these vendors or trades, or not sure they call them tradies, yeah. That they have is really yeah, it, I can see how it could be a huge asset.

[00:30:04] Aaron: Huge asset. So that's the LIL effect. They really are a huge asset. So you've got, listen more to your clients, the intentional of building trust, and listening to your trades and vendors and anyway, that LIL effect will produce positive consequences every day of the week. There's really no negative and it's kind of rare that you can apply a strategy and not have, some downside of it. But it's pretty easy to apply. Maybe a more listening and intentional ear. Yeah. Something that we're noticing, that kind of goes along with this, and I think everybody's probably feeling this at this point. I've been waiting for everybody to feel like the pinch of what's going on, right. So, one thing that we're trying to do here for our business is just constantly be on the pivot where, well, what are our clients feeling? Yeah. What are they experiencing? What are their hardships and challenges? What other problems can we solve? And we've been doing that since inception, but I've been waiting since kind of some of the overall damage from where it started with Covid. When is this downstream damage going to really start affecting just masses, right? And profitability and properties and so forth? And over the last four to six months we're seeing more of it. And on our end, we're ready for that pivot. And what that pivot looks like is when people are pinched financially and emotionally. And additionally, right now politically, when people feel pinched in corner like this, yeah they have a tendency to retreat into corners, right? It's the old adage, that we retreat into our shell. And as people do that, unfortunately trades and property managers, when they're feeling kind of this trifecta of pinch, they have a lack of control. This goes back to the psychology. They have a lack of control. So what do people do when they're losing control of one thing? They go and gain control of another, right?

[00:31:51] Jason: Yeah. They start micromanaging other stuff.

[00:31:54] Aaron: Yes. And asking all the wrong questions in that micromanagement, right? And so they start micromanaging, they start trying to regain control. And I see sometimes property managers pushing back because again, the client's asking the wrong group of questions, seeking for some semblance of balance of control. And as they push back, then they're usually again scapegoated into some failure, some misunderstanding, some reason that the client needs to retake or re grab control. Yeah. And when they're insecure and out of control, we often coach our clients to tell them, 'look, let them. Give them a moment. They don't want to drive the car. They don't really want to drive the car. Yeah. They want to know that they can drive the car.' Right. And so clients come, they feel uncomfortable, they want to regain control. And so we'll tell our property managers many times, ' let them sit in the driver's seat. It's like taking a teen, and you remember the old driving the cars, they had a brake pedal in the passenger seat where the instructor could sit and slam on the brakes and--

[00:33:04] Jason: Yeah.

[00:33:04] Aaron: --Scare the teen right out of his gourd. I mean, that's how I learned to drive from a instructor. But it's kind of--

[00:33:10] Jason: sounds like a mean instructor.

[00:33:12] It's sometimes though it's like that the property

[00:33:14] Aaron: manager would be wise to step aside for a moment and let them get in. Actually a lot like you did with, telegraphing. Almost over transparency. This is what I'm doing, this is what I'm doing. Let them see how you're driving. Let them see every turn you're making. And eventually they get to a point where they're like, yeah, he's driving fine. I don't, they don't want to drive. And property managers hold that close to the chest. I can't let them get in. I can't let them, do X, Y, and Z because that's my job. That's my responsibility. And they guard that tenaciously and that actually leads to more distrust in the moment than trust.

[00:33:48] Yeah, I actually

[00:33:49] Jason: teach. And I've had a podcast episode on this subject before, but I actually teach clients that the one thing that people want to buy from a property manager is not property management. What they want to buy is safety and certainty. Yeah. They want to buy peace of mind. That's really what you're selling as a property manager. And so if you're not using LIL and that framework, And you're not going to get those positive consequences. And if you're not making them feel safe, you're actually going to have a higher operational cost in your business because you're going to have a whole bunch of owners that are micromanaging you because yes, if they don't feel safe, they're going to create safety. Yes. In the form of leading and micromanaging you. And if the only positive way to push back on that is to let them know that you know what you're doing to showcase the expertise and let them know that you are better at this than them. Yes. Based on proven history and results. Yes.

[00:34:44] Aaron: I, that is such a great point, Jason. Matter of fact, that's really, really kind of the key, if they'll filter everything through what you just said, if they'll filter everything through this idea. Building that trust and managing that relationship that way and not the property. The property's easy to manage. People are tough to manage. True. And if you'll manage to those, like you said, those, those expectations with their end goal then you can manage the property kind of on, on the side. In fact, it's interesting. I would also say that anytime, That they see Anytime that, our clients see micromanagement from their clientele, that should be the first cue that they're on their way out. Yeah. You know that they're, they don't trust you, that they're not trusting and that eight, eight out of 10 times 80% of the time, I would say that when you have an owner or property manager or an executive body that's frustrated or micromanaging they don't know it yet sometimes, but they're already beginning the process of finding somebody who they feel that can do a better job and they never do.

[00:35:50] They only find somebody to solve a problem for a minute. But the problem is really, like you said, trust, expectation, those relationships, because the property is not the challenge.

[00:36:01] Jason: Yeah. I mean, there might be one counter to this. So one thing that's I think is really interesting is we'll have clients in our coaching program and sometimes they're just like grumpy and they complain about everything and they're frustrated, but they stay. And then sometimes they're really happy and they're getting great results and then they leave. And so what we've learned to pay attention to, In the realm of client success is that it's not even necessarily connected to whether or not they are happy or you're getting them great results or not. Which is really weird, but client retention is based on whether or not they still see a future with you or not. And that there's a future plan. And so as long as they have a future goal, a future roadmap, they might be miserable as they do all of it, but they'll still stick with you because they see a future that includes you, and so they'll stay with you, but it's very easy for them to start creating a new future the second they start not having a good experience with you, they start to imagine, man, it might be better with somebody else. Yeah.

[00:37:00] Aaron: And with that, you can't discount the 80 20 rule either, right? There's a, there's the law of averages and statistically speaking, it's been proven, a thousand times that. 20% of your clientele is going to be 80% of your time expenditure. Right.

[00:37:13] Jason: Which is why you should probably fire 20% of your clients.

[00:37:17] Aaron: I knew you were going to say that. I set you up, Jason. I knew you were going to say that. I the truth is I've actually watched property managers do that very thing and they just end up with the different 20%. Right? Right. Yeah. So better, the better way to do it is if you're going to fire, because I don't think. I don't think the idea is lost. I think you got to look at profitability and Yeah. Which ones are really not making you money, right? And those are the ones to let go because you're going to end up with the same 20% of kind of high maintenance clientele. And if they're profitable, then maintain it. And if they're not, then call it and get to the 20% of higher profitability clients. Right. That's again, coming back to intention.

[00:37:58] Jason: I would agree related, if you're focused just on the currency of cash, but if you're focused on the currency of like your peace of mind and time and other things, then it might not be worth it.

[00:38:10] Aaron: Some. That's a great point. That's so true.

[00:38:12] Jason: So it might not be worth it because it really, the goal of a business isn't just money. The goal of a business is to give us more freedom, more fulfillment as a business owner, more of a sense of contribution and more support. That's why we build a business, why we build a team. And so some owners are stealing that from people, and I think a lot of times it's easily solved by just setting really good boundaries, expectations. And like you were talking about communication. Yeah. And that most owners, when they're micromanaging like that, they just want to know you're actually holding the steering wheel. That's it. As soon as they recognize that, they're like, oh, okay, I'm fine. And so a lot of times it's just a matter of being stronger towards them. Like some of my clients, I teach them to say, 'No, Mr. Owner, we're not going to do that and here's why.' And then suddenly that owner disarms. But a lot of times if they say, okay, I'll do that for you, the owner then goes, 'oh, I now need to lead them through everything to get the results that I want.'

[00:39:08] Aaron: Yeah. Yeah. So that's great.

[00:39:12] Jason: Interesting stuff. All right, so, now a lot a lot of my clients are managing small multi-family units, single family residential, maybe some condos. There might be some association management. When does it make sense to reach out to North Star?

[00:39:28] Aaron: When they want to use and empower the actual math is what I call it, when they want to use and empower the actual revenue versus expense load for decision making processes. Okay. It's really, there's a balance between the revenue and the expense load, and in almost all cases, the expense load is higher. So when I call it a balance, it's not like it's an equal balance. The expense load over time is higher when you factor in the revenue with profitability, et cetera. So how do we empower the math to make decisions based on the actual dollars and cents and not just aesthetics?

[00:40:08] Jason: Okay, so let's take an example. Should they reach out to North Star if they have an owner that they can tell is not doing things mathematically effectively so that they can actually leverage your data in insight to say to this owner, you're being an idiot. You need to do it this way. Is that a good case example.

[00:40:28] Aaron: It's a great example. In fact, in downtown Boise there's a highrise, I won't mention it. And very nice, very, kind of high end highrise. And the property manager called us, this is actually just a couple years ago, but I still play this one out because it changed everything. And they were ready to spend $50,000 just on a furniture rehab. And long story short is the furniture was already nice. I mean, high end from the lobby to the rooftop. And in the end we ran through reserve study, helped them see that a $50,000 was not only not in the budget, but a gross overspend. They still spent 15 grand, but that other 35 went to a future roof project that they were not only not prepared for, but didn't have properly funded. So the answer is yes, to I would say anytime that a property manager wants to help mitigate or remove the emotion from the pushback that they might get with their owners or executive body and using the math to make those financial decisions, that's an appropriate time to call North Star. Another great aspect of having a reserve study and having the proper financial is creating continuity. So once you start that decision making process, owners and property managers get really good at creating continuity for that decision making process, and that reduces the time expenditure on a property that reduces the discussion, meeting time, expenditure with their owners. And so we call it continuity. In fact, we have a continuity program, which is really a consulting program that we use the existing study to take them through a year long process of decision making and preparation where we are basically on retainer by the course of the year to interact and help create that continuity. Directly, it's actually always designed for the property manager. So that's create continuity for the property manager to use the financials to manage those long-term decisions.

[00:42:20] Jason: So I imagine another use case would be they're about to take on a rough property and I get questions like this, should I take it on? Yeah. I mean, often the answer is no. But if the owner is amenable to like fixing it up, making the changes necessary, but a lot of times there's a lot of emotion in it for them. Yeah. And so if they can connect them to the math and to reality through something like working with North Star then, and they're willing to do this, then they could end up being a good client and it could be a good scenario.

[00:42:51] Aaron: That's correct. And we resist all things boiler plate, right? We like to tailor it to the real circumstance. We do use some boiler plate numbers to help owners get to a basic understanding of profitability and whether or not to buy a property. More often than not, Jason the questions usually: I want to make an improvement on an existing property, and should I? What's the downstream cost and the downstream cost of maintaining that improvement? Yeah. Right. We want to resurface the streets and, or we want to we want to add in a bar to this, to this, mini restaurant or a bar area. And so you, we've got to look at, where the cost expenditure is and the long-term maintenance of that improvement.

[00:43:33] Jason: I would imagine that property managers, if they've even done a few of these situations or scenarios with you, learn an immense amount of insight and knowledge just by through association with what you're doing.

[00:43:48] Aaron: Yes. In fact, that's, I didn't start this business doing the consulting side of this. I started with just, reserve studies, right? We just produce a reserve study, we produce the math, and it's my nature to kind of help people through that. And I don't push back on people with meeting and the time expense of meeting.

[00:44:05] I help them through it. But that has evolved over years into really a full consulting program because you're exactly right, property managers when they really know how to use it They need less of my expertise on the reserve study and more of my expertise on using the reserve study to manage again, people right, to manage expectations of people, to manage tough conversations with people. Property managers have more longevity in managing a property. I find when one, they have that trust, and two, they do have some profitability because you're right, it is about those people. But their investors want to see good financials. And when the property manager can focus on intentional trust while at the same time producing transparent and profitable financials, I mean, I don't know why anybody would want to leave a property manager that is performing at that level.

[00:45:00] Jason: Yeah. So I think the next question somebody would have is, this has to be really expensive. Would it make sense? Like say I get an investor and he's got like, a hundred unit building, or I get a different investor and he's got a hundred single family units and I'm going to bring in this portfolio. Is this something that. Is financially going to make sense? Is there a way for this property manager to convince the owner to do this, and for the property manager to be able to afford to do this in a way that it's going to make them money?

[00:45:32] Aaron: Yeah. In a very rare circumstance, has it not really and I'm just being very candid, in a very rare circumstance, has it not financially made sense. In fact, in 2019, and it just happened to be a good timing in late 2019, we created what we call a virtual site inspection for those properties were financially, they just don't maybe have the volume of assets to merit a 30 year full reserve study in the consulting. Yeah. And and so we do a virtual site inspection, which is a little bit more boiler plate, but we'll go on. As long as I have satellite images, I'll do a virtual site inspection from satellite imagery. I can usually get some really great street view images and I can build a reserve study without ever leaving the office. We have staff here and I've got one guy and that's all he does. He just looks at those virtual studies. He builds these virtual studies so we don't ever have to mobilize. We did that because that got the price, the mobilization costs down and therefore it got the price of the reserve study commensurate to producing well, just a profitable report, so it didn't make sense. Yeah, it's not cheap to to, again, to be candid with you, there's a lot that goes into it. Sure. On a high rise, we might have, 80 hours into a full study with the site inspection and all the data gathering. So it's generally not cheap. And so we do try to find balance in that.

[00:46:49] Jason: Got it. Well, this is interesting. I think we've gotten a lot of info from you. I appreciate you being here on the show.

[00:46:57] For those that are curious or interested in maybe doing their first, reserve study or in connecting with you, how can they get ahold of north Star Reserve?

[00:47:10] Aaron: Well, for your customers and clients, Jason, I'd give my personal information out. So they can contact me directly at aaron@northstarreserves.com.

[00:47:21] aaron@northstarreserves.com, all spelled out northstarreserves.com is our website. They can call our office at (208) 365-0977 and we'd be happy to help out, put a quote. I don't charge for any upfront consulting. We'll take anybody through their property, their needs just to make sense and vet out whether or not it even makes sense. And I I feel that's just ought to be industry standard, and help people make sure it makes sense in the first place. Right.

[00:47:52] Jason: Awesome. Well then hopefully everybody reaches out. Right? I appreciate you. All right, awesome. Well, we appreciate you being on the show, Aaron. This was really insightful and yeah, I'm really, I'm going to be curious to see how this could help benefit some of our clients as well. So thanks for coming on.

[00:48:09] Aaron: Yeah, thank you. Appreciate you, Jason. All right, so check out northstarreserves.com. Now, if you are a property management entrepreneur and you are wanting to grow your business, add doors, reach out to DoorGrow. We can help you do this if you're wanting to scale your operations, you just feel like you're banging your head against the wall. You're frustrated. You're trying to deal with all these different tools and software and trying to figure out what's the best way to scale my business. And to make a business that's infinitely scalable? You're going to need a lot of systems. And we've developed what we call the Super System. So you're going to need a people system for hiring and vetting candidates. You're going to need a system for operations in an operating system for planning that motivates your team instead of it's top down pushing your team all the time. We have DoorGrow OS. We have DoorGrow Hiring. You're going to need a system for documenting processes. We have DoorGrow Flow, which is a flow chart based software for mapping out processes and having your team run processes through. So if you're wanting to grow your property management and you're wanting to scale it, you're wanting to get a really good coaching for your operator or operations person. You're wanting to get really good coaching for your BDM or your salesperson to grow and scale and add doors. We are the best at this, so reach out to my team. We have a plethora of coaches and resources.

[00:49:32] We've been doing this for over a decade. We love growing and scaling property management companies, and we know that we can help you. If you're willing to just do what we tell you to do, so reach out to DoorGrow. We would love to help you out. And if you want to test just something, test your website, go to DoorGrow.com/quiz test your property management website and see how effective it is. Usually this is enough to get people to wake up and go, 'Hey, I've got some leaks in my business people.' So most of you have leaky websites that you've gotten from people that are not DoorGrow, and your website is leaking you leads, deals, and money every single week. You could potentially be getting twice as many leads in deals if you're scoring an A on this DoorGrow Quiz. But most are scoring a D, C, or sometimes an F, right? So take this quiz, check it out, DoorGrow.com/quiz and grade your website. And that's it for today. Until next time to our mutual growth. Bye everyone.

[00:50:30] Jason Hull: 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!

[00:50:57] 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.

Apr 22, 2023

One of the most complicated parts to navigate when you own a property management company is the different types of insurance and risk management you have to know and have. 

Property management growth expert, Jason Hull brought on Calvin Roberts of Falcon Insurance to discuss everything you should know about insurance and risk management as a property manager. 

You’ll Learn…

[01:26] Introduction to Calvin and Falcon Insurance

[05:46] Risk Management and Property Management

[13:24] Holistic Risk Management Strategies

[17:57] The Types of Insurance Coverage

[25:25] Insurance Best Practices and Tips

[29:56] Tenant Legal Liability

Tweetables

“It's the true risk management angle that I find to be sort of like chess. That's why I think it's interesting because one move counters another.”

“It’s just making your rights known in the lease agreement that will hopefully alleviate the vast majority of instances like this before it could ever find its way to a courtroom.”

“If you don't feel like you're progressing or moving forward in your business, you just might not have a big enough goal. So set your stake a little bit bigger, a little bit higher.”

“I think cyber's a great idea for everyone. I carry cyber liability insurance on my own insurance policy for Falcon. It's fairly cheap, and it does add a lot of value.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] [00:00:00] Calvin: If you haven't gone through all of the building limits with your insurance broker over the last three years, and really over the last year, maybe two years, it's probably significantly underinsured. I read the statistic recently that over 75% of buildings-- commercial investment real estate-- are underinsured by 40% or more 

[00:00:25] Jason Hull: All right. Welcome Doorgrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder, and CEO of DoorGrow. Now let's get into the show. 

[00:01:26] So my guest today who I'm hanging out with is Calvin Roberts of Falcon Insurance Agency.

[00:01:34] So Calvin, welcome to the show.

[00:01:37] Calvin: Awesome. Thank you once again for having me today. I appreciate the opportunity to speak with you and super excited. 

[00:01:44] Jason Hull: Yeah, glad to have you. So, Calvin, give people a little bit of backstory on you. How did you get into insurance and how did you get into business in general and then we can chat more about insurance. 

[00:02:01] Calvin: So I started off in retail property and casualty insurance. Very young. I was 19 years old. I knew I wanted to take immediate action to, you know, more or less accomplish the goals I had set out on achieving. And I had some family members who had a very successful career for themself with insurance. They weren't on the retail, sales insurance agency side of it. They were more working for the company directly, but I saw the effectiveness of insurance as a growth vehicle for, you know, achieving good, stable personal income and overall just view that as a very, a very fulfilling field if you're one of the few people that find risk management genuinely fascinating. So I began an Allstate office in Mid, Michigan in 2016. I was there for about two years and quickly realized I needed to go independent. I didn't like being locked down for just one company. So in 2018, after I, you know, got my feet wet and did a couple years there. I branched off and worked at indie agency and I was at that office for about two years further, and also quickly realized I needed to own my book of business, my contractual relationship with my clients. That's where, you know, the real scalability and effectiveness and retail insurance as being a personal financial driver came into play. So I split off right as Covid was kicking off April, 2020. I figured if there's any time to bite the bullet, restart from zero and you know, take it from the ground up once more, april, 2020 was not the worst time to go out for it, you know.

[00:03:53] So I, you know, split off then worked 1099. I had a friend that had started a insurance agency at their own couple months before and was like, "Hey, Cal, why don't you come work for me?" And I said, sure, but I am going to eventually leave to form my own agency. So I pre-negotiated contractual ownership of my clients. That was something that was very important to me and worked under him to more or less build the foundation for eventually splitting off and forming Falcon. You know, it's kind of a chicken-egg scenario with retail insurance where you want insurance companies on day one to work with you when you form an agency, but it's hard to get them to work with you unless you have some type of existing clients and premium volume that you can bring to the table on day one.

[00:04:47] Yeah. So during that period I worked to, you know, set my pieces up and build a impressive enough book of business to where I could attract insurance companies on my own. And then last January I left my friend's agency and formed Falcon. We're a national boutique commercial insurance brokerage. We are very forward thinking, licensed nationally, and we don't ever really lose on price, but where we really sell on is having a unique, holistic risk management, value add strategy for our multi-family operators. We bring $0 best practices, you know, tips and tricks to the table that many of our competitors just don't take the time to share with the operator. And that's really how we differentiate ourself is taking a bold, big picture approach to managing risk for a multi-family operation.

[00:05:46] Jason Hull: Okay. So what about you makes you interested in risk management? This is not something that most people wake up and go, "man, I want to learn about that today." Right? 

[00:05:55] Calvin: So I know, you know, every little kid growing up wakes up in the morning and thinks, "I want to be a insurance broker when I grow up."

[00:06:03] Jason Hull: It's right up there with like firemen and working with animals like veterinarian. 

[00:06:08] Calvin: I am one of those few insurance geeks that finds it legitimately fascinating. You know, it's not very hard to write an insurance policy. Most people can probably do it for their home and auto, online, and realistically even most small businesses. Most people can probably put that together for themselves. It's the true risk management angle that I find to be sort of like chess. That's why I think it's interesting because one move counters another, and it's all about just proactively working a flank, whoever might be seeking to cause financial harm to your organization. So I'll give an example. Most insurance policies exclude care, custody, and control liability. So that's liability arising from your guardianship of property. So where that would come into play on a multi-family operation would be the vehicles kept in the parking lot of one of your buildings or complexes.

[00:07:08] Let's say you have a resident, maybe they let their insurance policy lapse, you know, they forgot to pay it and it got canceled and maybe they had a brand new 2023 lease vehicle. You know, they pick up a new Ford truck. It gets stolen or maybe a tree branch falls on it. The bank is hounding them like, "Hey, why didn't you have insurance?" They're thinking to themselves, "I need to do something to get them made whole so I don't get sued" and you know, maybe, you know, "I have to get to work. How do I do that without a vehicle?" Type of thing. They're quite likely to attempt to sue the multi-family operator and or property management company due to this. So something that I recommend all of my clients implement into their tenant lease agreement is a stipulation that they are expressly not liable for care custody control of tenant vehicles parked on the premises. You know, it costs the operator nothing to add a one-paragraph section for their tenant lease agreement and the effectiveness of this, should it go to court, kind of varies on a state-by-state basis.

[00:08:23] You know, depending on how the courts have interpreted this and your jurisdiction. But simply by having something like this in your tenant lease agreement, it talks a big game and it's pretty likely to, you know, hopefully dissuade 95% of people from even attempting to litigate. So it's that element of, I don't want to say bluffing, but just making your rights known in the lease agreement that will hopefully alleviate the vast majority of instances like this before it could ever find its way to a courtroom. Because you know the first thing that would happen. Should a loss like that occur is the resident would talk to their personal attorney and they're going to immediately ask for a copy of that tenant lease agreement.

[00:09:14] Right. You know, they see a section like that and maybe they, you know, advise to maybe not attempt to litigate. They just aren't sure if that might play out in the courts favorably for them and say it's just not worth it. 

[00:09:29] Jason Hull: Yeah. 'An Ounce of Prevention Is Worth a Pound of Cure'. Right, exactly. So, I mean, they could get a really great lawyer, you know, to try and protect themselves. But you know, having a really good lease agreement in making sure that you have some of those things in place to protect you from potential issues surrounding insurance. Yeah. Sounds wise. So, yeah. Very cool. So, and you geek out on. This is fun for you. 

[00:09:56] Calvin: I think it's legitimately interesting to think about. I'm one of the few people that gets kicks out of it.

[00:10:03] Jason Hull: Which is cool. I mean, if you are going to be handling this stuff for your clients, hopefully you do enjoy it. Right. Thank you for sharing kind of your journey. What's fascinating to me is that every single step that you had mentioned most insurance agents or people that kind of progress through that would probably drop off that first level. Maybe the second level. They just get stuck. They're comfortable. So what is it about you that drove you to, in such a short time period, like get to the point where you are innovating, making changes to starting your own business? 

[00:10:38] Calvin: Really a few things. I've always wanted to be in the agency principal. That's where it enables me to have the freedom to do the things I like to do. Yeah. You know, I don't just want to pick up access to five insurance companies and then try to write as much business as I'm able to that agrees with the appetite of those five insurance companies. I target segments, you know, industries that I find fun to work with, interesting to work on.

[00:11:08] Overall fulfilling to be involved with, and I want to be as effective as possible constantly when going after and targeting those segments. So when you're working for someone else, I mean, they can have great access to insurance companies or it could be not as great and fairly lacking. More often than not, it is fairly lacking. I found most of the agencies I had been with previously, they had done, like you said, they got comfortable and kind of stopped trying to push the needle, so to speak. And, you know, that's fine. They were making, you know, excellent income for themselves and their family and it was working very well for them. But it just comes down to, I don't like to lose when I'm going after something. Yeah. So I might. Be humbled the first 1, 2, 5, 10 times I go after a new segment, but eventually I will start winning and I want to have access to the insurance companies. I know we'll win. I want to be active in the states where I would like to chase business, target accounts. Yeah, so it's about having the freedom on my end to accomplish my goal. 

[00:12:23] Jason Hull: So, I mean that plays into stuff I've talked about on the show previously. I mean, you're an entrepreneur at heart. Like now entrepreneurs, they want more freedom and they want more fulfillment and you know, than the average person when most people want safety and certainty, which is good for insurance agents, right? So you had an outcome that in your mind you were like, I want to be agency principal. Like you knew what you wanted. And so this is take note, everybody listen. Because most of you're business owners, if you don't feel like you're progressing or moving forward in your business, you just might not have a big enough goal. So set your stake a little bit bigger, a little bit higher. Like what do you really want? It probably isn't, probably not satisfied or comfortable with what you have, but maybe you're not clear the outcome that you want. So, so, now a lot of our listeners do residential and a lot of them, some have multi-family. Some have single-family properties they're managing. What did you want to come share with us today and chat about? 

[00:13:25] Calvin: So, I would love to talk about holistic risk management strategies. You know, things like my contractual risk transfer agreements that I think are advisable for all investment real estate operators, multi-family, and one the four family residential. Okay. Yeah. It doesn't cost anything besides maybe a consultation with your attorney, and it adds a lot of value that is not a recurring cost. It's a one time, you know, check to your attorney. Time and effort. So give an example. Let's say you're hiring a contractor, maybe an arborist to come trim the branches off of the tree on one of your properties. You'll want them to provide you a certificate of insurance that names your organization as additional insured. And you want that because if, let's say maybe when they're cutting down a tree branch and it falls and takes out the roof of a neighboring property, I mean, that's terribly plausible to happen.

[00:14:28] You would rather that not be a claim on your insurance policy. You want that to fall on the arborist policy you know? We're in a what's called hard market, which basically means, for lack of a better word, it's a seller's market with an insurance currently. It's being driven by interest rate changes, inflation, and several other factors coming in to play. We don't want that claim to be tied to us that. You know, be passed off to the responsible party, the contractor that we hired. So by asking for that certificate, it makes it less of a challenge to get their insurance to respond should that type of loss occur. And on top of that, I like to see in the insurance requirement section of our, you know, contractor agreement for employing them on a 1099, that we have a primary non-contributory clause. We want a hold harmless agreement, and we would like a waiver of subrogation. We do that for a few reasons. We don't want to, you know, take the step of getting the contractor's insurance and having it name us as additional insured only for their insurance company to say, "oh, well, you know, we think that you are partially negligent somehow. You know, maybe you should have had the tree branch trimmed a year ago, or five years ago, and you let it grow too long." We don't want them to get into a more or less a battle with us and our insurance company on how much of the loss they're responsible for. We want them to take immediate responsibility and not attempt to, you know, wipe their hands of it, so to speak.

[00:16:14] We also don't want the other insurance company to pay the claim, you know, settle the lawsuit only to attempt to come back and subrogate that loss from us, you know, the property owner or property management company. So that's where that waiver of subrogation would come into play. That would be where they attempt to be made whole by, you know, attempting to recover from a third party, so sue us, for lack of a better word. You know, maybe they might say, oh, well, you know, you were negligent because you had the duty to trim this tree branch when it got over, you know, 14 feet long, or just whatever argument they choose to try to put together. And then we're back at square one. We're being sued.

[00:17:04] It's a claim. Our insurance policy we don't. So we ask for this as a requirement in our contractor employment agreement. It's fairly boiler plate. I mean, if you look at the insurance requirements on subcontractors coming from general contractors, you know, residential and commercial developers and builders, these requirements are usually found in what they're going to look for in their subcontractors, but I do commonly see it missing within property management companies. Despite property management companies being, you know, kind pseudo contracting type operations. It's kind of like that hybrid between like the clerical office job and the on the job site, you know, residential builder type role.

[00:17:53] Jason Hull: Yeah, a lot of them kind of function as a general contractor to a bunch of contractors. So what what are the types of insurance coverage? Let's go to the basis, what are the types of insurance coverage typically required for a residential property management company?

[00:18:08] Calvin: The residential property management company, you will want a general liability policy that would respond in the event that we cause bodily injury or property damage for which the company is liable. You want professional liability insurance. That's in case there is ever a professional boo boo, so to speak that comes up. I had a pretty nasty law scenario I won't get into too much detail on over the summer last year, which thankfully has not turned into a lawsuit. Let's kind of crossing my fingers and, you know, a little nervous for the insured on this one. I work with their third party property owners, but the property management company is not itself a client yet. But the story on this is that someone was, you know, injured, let's say in the apartment building via violent action from someone that may or may not have been a tenant. I'm not sure exactly on the circumstances. And the exterior facing door on this newer acquisition property had been purchased, you know, about four months before the loss event happened. That door had not been re-keyed by the property management company. So if a old tenant from five years ago still had their old key to get into the laundry room, they could, it was still the old locks.

[00:19:29] The property manager was unaware that there was a door entering into the basement area that was accessible from the outside. So they just never thought to rekey it, you know, happens. There was a bad event in the property and if that were to ever make its way to court, the property management company would almost certainly get tied up into that. And to be honest it's kind of unclear if that might fall onto a professional liability or a general liability form. It's kind of gray because it's technically a bodily injury that occurred. It was bodily injury due to more of a lack of professional action than, you know-- it's not like they would hit someone with their car kind of thing.

[00:20:13] So we would probably file claims on both policies and just kinda let the insurance companies fight it out on who's responsible to hear from there. So that would. A pretty good instance of where professional liability might come in into play. Okay. I also think that cyber liability insurance is a good idea. So cyber would come into play if, you know, let's say one of our accountants, you know, maybe we have two or three staff accountants on board. They download a file and maybe it has a virus and their computer gets hacked. And as a result, the personal banking information for 1500 residents that we have on file might have been stolen by a nefarious third party actor. We would become liable for what happens with that data, and that's where cyber would come into play. 

[00:21:04] Jason Hull: Yeah, there was a one of the major property management software that our clients use, one of our clients were telling us was hacked, So, yeah, so now they're having to deal with that mess. 

[00:21:14] Calvin: It happens a lot within the small business and the lower mid-market, you know, operation world. In recent years, I would say the biggest segment that really needs to put emphasis on protecting themselves is that middle market operation. Because if you're a nefarious third party actor, and maybe you're doing ransomware attacks where you hack into their system, lock down all of the data and say, send us $500,000 worth of Bitcoin to this address, or we're going to delete everything in three days. Yeah, I mean, it happens fairly often and they're not going to go after that real small operation. It'll be a operation. It's big enough to have financial resources where they can whip out a half mill if they need to keep their business alive more or less. But they're also not big enough to where, you know, they're that Fortune 1000 who has a, not only a risk management team, but they also have the, you know, cyber risk management team and the IT team, and they're able to much more effectively defend against that. So they target the businesses that are in between those two stages because they have the resources to pay out in a, you know, cyber extortion scenario. But they also do not yet have the resources to where they can adequately defend proactively against it. I think cyber's a great idea for everyone. I carry cyber liability insurance on my own insurance policy for Falcon. It's fairly cheap, and it does add a lot of value. 

[00:22:54] Jason Hull: Yeah, I mean it's interesting. Most small businesses are one bad password on their team, away from affecting all of their clients in having to e crow in front of all of them. And you also have no idea how the companies you're using and most property managers are using a lot of different software tools including the one that has all the accounting stuff going on, you know, their property management software, back office and they have a whole team of people that one person can screw it up for everybody. So yeah. So we've got general liability, professional liability, cyber liability. What else? 

[00:23:34] Calvin: You probably want worker's comp, you know, if it's just yourself, you can get away with not having it. But if you have any staff on board, even if they're a 1099 employment relationship, you will want the worker's compensation. And I say the 1099 rule, because that's a common question I get asked. You know, "I don't have any W2 employees. Do I need worker's comp?" The answer is yes, unless the third party, you know, 1099 employee that you're hiring provides you a certificate of workers' compensation insurance. If they do that and you do not have any other W2, then no, that is not a hard requirement. You can use your discretion on that. But if you are hiring, you know, even 1099, you need the worker's compensation insurance. It's fairly inexpensive, all things considered, and most states, because it does kind of vary by locality, it's a requirement and can create a whole host of hurt for not having it. It's one of those things where I am terrified, you know, maybe not doing something that the government loves, so to speak, and that's up there with things that ticks them off, you know? 

[00:24:54] Jason Hull: Yeah. So another one that I hear about in the industry a lot is errors and omissions. Can you touch on that one or explain that one?

[00:25:02] Calvin: So the errors and emissions is that professional liability element. 

[00:25:06] Jason Hull: Okay. 

[00:25:07] Calvin: So they have kind of synonym names for that line of insurance. 

[00:25:12] Jason Hull: Okay. Okay, cool. Yeah. So, perfect. Okay. because I hear like all the time they're saying, getting E and O you need E and O stuff like that. So that's kind of what they're calling professional liability. So how can property managers better protect their owners through these insurance products? 

[00:25:32] Calvin: Occasionally, the building owning entity itself may be tied up in a loss due to, you know, perhaps alleged property management negligence. So I'll give an example. Let's say, the property management company is assigned to hiring out snow and lawn maintenance services, you know, someone to come out and, you know, remove snow from the parking lot on a small apartment complex or a three-family rental property. And maybe they select a contractor who, they're nice and they're cheap, but they aren't super consistent or dependable. So sometimes when it snows, they just don't come by and snow and ice accumulates in the parking lot and perhaps a resident slips and falls on the way to their vehicle one day and they're seriously injured. It's one of those things where if the tenant sues, which they probably will, they're going to sue the property management company and they're going to sue the building company.

[00:26:34] We would want, if we're going in the direction of, you know, looking out for our property owners and having that be kind of our unique selling proposition, we wouldn't want their insurance to respond because they hire us to take care of those things essentially. That was our boo boo one could say. That's where having our own general liability insurance would come into play, that coverage would trigger, and you know, it's kind of the inverse of how I usually see this play out, because it's generally the building owner's policy that would respond and then they would have the property management company as an additional insured. But I mean, if our branding and selling point is that we, you know, put a special emphasis on always doing right by the owner and just not allowing situations like that to occur, that's where we would want our insurance policy to respond primary. 

[00:27:31] Jason Hull: So, I would imagine with covid happening and all the stuff that's gone on recently in the increase in government control that's constantly happening, if somebody hasn't taken a look at their insurance, maybe in the last five years, what are some recent changes or things they should be paying attention to or they should be talking to somebody like you about? 

[00:27:54] Calvin: The first thing that I look for when reviewing a new policy for a new client, kind of getting eyes on the existing arrangement of coverage, just to make sure that everything is done correctly before I try to compete on price against that is to look at the building limit. If you haven't gone through all of the building limits with your insurance broker over the last three years, and really over the last year, maybe two years, it's probably significantly underinsured. I read the statistic recently that over 75% of buildings commercial investment real estate are underinsured by 40% or more, and the reason why that is not good isn't just that in a claim scenario that burns to the ground, we're only going to get a check for 60% of what it might cost to rebuild. because we're thinking, hey, the home's only worth 30% of what it might cost to rebuild. It's not a bad deal still. It's that the overwhelming majority of insurance policies, commercial property policies have what's called a co-insurance clause. And coinsurance is where the insurance company wants you to have sufficient skin in the game. So you can insure a property for 80% of what it might actually cost to rebuild.

[00:29:14] So that million dollar to rebuild building, you can have a policy on it for 800,000 and that would be fine if you will like to carry 400,000. You know, maybe the market value of the property, that would not be acceptable and they would divide the amount of insurance that we have, 400,000 for this example, by the minimum amount of coverage that we should have had, 800,000.

[00:29:39] That leaves us with a 0.5 gut insurance penalty multiplier. So on a $200,000 fire, they're going to subtract 50% and your deductible. So you get posed on that and are paying most of the loss out of pocket. 

[00:29:55] Jason Hull: So are there any other unique or unusual coverage options that are related specifically to residential property management?

[00:30:06] Calvin: I've been putting a great deal of emphasis on the tenant legal liability product over the last two years. It started popping up pretty actively around three or four years ago. I mean, there are some operations that have been doing this for a decade. It became fairly popular around 2020- 21. And what the tenant legal liability insurance does is it provides a mechanism, one for monetizing the insurance vertical for the operator, and two, it enables the property owner to shield themselves from having small, you know, tenant negligence type losses pile up on their own insurance policy and therefore claims history. The most common cause of loss I see on residential investment real estate is you have a tenant come home one night. Maybe they just worked 11 hours and you know, tired after a long, busy day and they maybe get home, crack open a beer or two, start cooking something, throw a pizza in the oven. Going lay downs on the couch for 20 minutes. Well, that's cooking. Watch some tv, and then they fall asleep and it causes a $75,000 kitchen fire. It happens all the time. It's a high frequency, low to medium intensity type loss, or like we had in the upper Midwest over the holidays, maybe they are going out of town for the holiday. And they're thinking to themselves, I'm going to turn my heat off during that time. It'll save me $20 in electricity. Right? So they turn the heat off and they come back four or five days later and the walls have exploded. You know, the pipes have burst and $90,000 worth of damage has happened because about we don't want that type of loss to be associated with our property policy.

[00:32:07] We're probably going to get nonrenewed, and it's going to negatively impact our pricing and cost for several years. It just is a bad scenario to be in. That's what destroys the loss experience for investment residential real estate is that high frequency, low to medium severity type tenant negligence cause of loss. So what you do is you write into your lease, the tenant must provide a certificate of acceptable third party renter's insurance. You know, State Farm, Allstate, Farmers, kind of whoever. And if they fail to do so, or if they let coverage lapse, you know, they stop paying for it, we as management reserve the right to place that coverage or a comparable coverage at their cost and for both of our benefit, more or less. And the reason why you do that is we want there to be that coverage in place. You know, I had just over the holidays, like probably five loss occurrences that would've otherwise gone on the property policy that were able to be pushed off onto this tenant legal liability master policy. So it kept their property policy clean. You know, we didn't have to file a claim against any of my insureds because of it. 

[00:33:27] Jason Hull: It's like having insurance to protect your insurance. 

[00:33:30] Calvin: Correct. It's unbelievable that property insurance has become this level of convoluted, but it's the game that we're playing and what we have in front of us. This is one of the most effective tools and toolbox.

[00:33:44] Jason Hull: So it's about having layers of protection. 

[00:33:47] Calvin: Exactly. Got it. It doesn't cost us anything. We pass the cost off onto the tenant. And then what we do is we add maybe $3-7 per door per month on top of what we might pay to the insurance provider. So maybe we pay nine, we charge the tenant 16 and pocket that $7 spread as an administrative fee.

[00:34:11] And that's a, but you might see this on P 12 s occasionally when you're underwriting a property on market or otherwise looking. Investment real estate is, you'll see insurance listed under the profit side of the equation. That's where this is coming into play. 

 

[00:34:28] Jason Hull: Okay. So it can be a profit center.

[00:34:30] Calvin: Exactly. 

[00:34:31] Jason Hull: Got it. Okay. So, how often should a property management business owner be assessing their insurance? 

[00:34:41] Calvin: Once a year. I would think about it very actively as you come up to renewal and then, you know, depending on what best practice implementations we're hoping to, you know, add to what we're doing over that next year, it's good to think about the key points frequently, but we should put special emphasis on it once a year as you come up to renewal. You know, just kind of see. What, if any improvements might be recommendable and how the market has shifted over that last year, but you don't need to think about it every second of every day, but it is good to have it in the back of your head often because it kind of forces that extra level of diligence to being front and center.

[00:35:32] Jason Hull: They just need somebody like you to think about it every day. 

[00:35:35] Calvin: Exactly. 

[00:35:36] Jason Hull: So I think a question that every business owner has is, "how do I balance the getting the best deal on insurance versus doing too much, get enough coverage, not spend an arm and a leg..." like, you know, in finding this balance and then trusting an insurance agent to do what's in my interest instead of just their interests?

[00:35:58] Calvin: So I'm a big believer in transparency with my clients. So something that we always provide with every account, new and old, is a market report. So let's say I, you know, I go to 11 different insurance companies for a new property that you're looking at. I provide a breakdown of where each company is coming in at with their pricing, with comparable coverages between them. You know, we can't set the pricing on the retail side. We're just kind of at times the middlemen of bad news, so to speak.

[00:36:32] Jason Hull: The messenger. 

[00:36:33] Calvin: Exactly. 

[00:36:34] Jason Hull: But don't kill the messenger.

[00:36:35] Calvin: By having that market report, it demonstrates that we're bringing our due diligence to the table and not just going to one company and saying, here you go. Here's our price. This is what we can do. I think that's, just a low-effort, less ambitious approach. I mean, sure you can move a lot faster by hitting one company, but you can deliver the best results by going to every company that makes sense to approach. And letting them fight it out. Maybe company one is hotter than company two and a given zip code, but that competitiveness flip flops, depending on just the details of the case that you're working on.

[00:37:21] So by approaching every insurance company where it makes sense to approach them, it's within their appetite, you let them fight it out and you see where the cards land. You know, sometimes the price comes in a lot lower than we were expecting to see. Other times, it's not within the range that we were hoping it would be, but by hitting every company possible and then showing your cards as to where they land, you know, that's really all we can do. And it demonstrates that we put, you know, our due diligence into marketing the account. 

[00:37:55] Jason Hull: Yeah. So you said that what a lot of insurance agents might do might be low effort or less ambitious. And so I think this is important to point out, this ties it back to the beginning, and this will be maybe good, you know, wrap up for us, but I think, you know, property management business owners listening to the show, my recommendation is you want to leverage and use vendors and use people as a support system in your business that are not low effort and less ambitious people that are running their businesses. There's a lot of accountants and insurance agents and people that really, they're basically like an employee with clients in their own mind. And then there's accountants like, you know, my Profit First Coach, an accountant and others that we leverage in our business. They think like entrepreneurs. They are always trained to improve themselves and improve their business, and they see things through a similar lens. So I can trust their advice and I can trust that they're wanting to that, that they know how an entrepreneur thinks and they're kind of eating their own dog food as an entrepreneur, and these are very different. Not all accountants are entrepreneurial, even though they have their own business. Not all insurance agents are entrepreneurial, even though they might have their own business. They're like just some State Farm agent that has their thing and they're set.

[00:39:20] Right. So, so I think that's important to point out. I recommend that you find vendors and people to work with that see things through the lens of entrepreneurism because it's a very different lens. There's a very strong different focus that they prioritize fulfillment and freedom instead of just the safety and certainty. They understand that aspect. And in your line of work, you need to pay attention to safety and certainty, but you're somebody that I'm sure can understand the goal that these entrepreneurs have of having more freedom and more fulfillment. And to you, I would imagine safety and certainty and providing insurance is a way of helping them create more of that.

[00:40:02] Calvin: Exactly. 

[00:40:03] Jason Hull: And that's different than a lot of insurance people. 

[00:40:07] Calvin: Yeah. I mean, I've definitely met some very ambitious colleagues within the field, but it's one of those things where it's not really that difficult in terms of chance of success or failure to make a very healthy living for yourself and for your family working in retail insurance, I mean, if you are in the gig for 10 years and you're writing even a modest amount of business, 2, 3, 4, $500,000 quite easily. So it, I see how that can more or less, I view it be as a trap because you become quite comfortable and stop trying to push the needle. 

[00:40:50] Yeah. 

[00:40:51] Jason Hull: Comfort kills sometimes. Yeah. Yeah. And you know, that's the case I think for all of us as business owners, we can get comfortable sometimes, and if we're not willing to get a little bit uncomfortable, if our goals don't sort of scare us a little bit, we don't have that ambition then we kind of lose life. I think feel like that's an important aspect for us to really find that fulfillment and enjoyment. Well, Calvin has been great having you here on the show. How can people get in touch with Falcon Insurance and get in touch with you? 

[00:41:23] Calvin: My email or phone or Facebook or LinkedIn, whichever is most convenient for you. I am extremely available and glued to the grind. Close to 95 hours every week. So you can email. Give us a call, shoot me a message on Facebook or LinkedIn. We'll rise to the challenge every time. 

[00:41:43] Cool. 

[00:41:43] Jason Hull: Share some of those things right now so the listeners can hear that. 

[00:41:47] Calvin: Awesome. My email is Calvin-- c-a-l-v-i-n @ falcon i n s agency.com and my direct line is 810-309-9475. You can find me on Facebook or LinkedIn under Calvin Roberts. 

[00:42:07] Jason Hull: Perfect. All right, thanks, Calvin. Appreciate you being on the show. 

[00:42:10] Calvin: No, thank you very much once again for having me. I appreciate that. 

[00:42:13] Jason Hull: All right, so if you are wanting to improve your property management business, and struggling with figuring out how to scale your team, your operations, your systems, here at DoorGrow DoorGrow, we are rolling out a lot of really cool new tools that are game changers for the industry. We've got DoorGrow CRM, which is going to be a disruptor, we've got DoorGrow flow, which is a process software, which is going to be a disruptor, and we've got DoorGrow OS, which is far and way better than things like EOS or Traction. Really awesome way to manage and run your team and the real rocket field of getting your team to think as decision-makers and as if they're business owners in the business to innovate and move the business forward.

[00:43:03] And we have DoorGrow hiring. This is a game changer. This is one of the most costly mistakes business owners make in their business. Team members are the most expensive resource usually in a business. Hiring can be incredibly costly. It often takes you one, two, maybe three months to realize you made a bad choice, and then they may have cost you a lot of opportunity, cost, and money in the meantime. These are all systems that we're helping build. We call this the Super System, all of our different systems. It's like the Voltron of systems or THUNDERCATS of systems or Power Rangers when they combine. I don't know what age some of you are and when you grew up, but depending, this is like the ultimate combination of systems and it's all of these are free and included in our high-level mastermind in which you get to connect with game changers in the industry. People that are growth-minded and grow your business even faster. And we give you a lot of really good coaches and systems. We have some of the best in the industry we brought in as coaches that are supporting our clients. It really is a game-changer. Nobody else can touch us because we run on DoorGrow OS. We leverage our own systems and do these things, and we move rapidly as a company.

[00:44:18] So DoorGrow is not the same company it was even 30 days ago, even 90 days ago, especially not a year ago, we have an amazing team and we would love to support you and help you scale your business and get you to that thousand doors or higher, whatever your goal is, and make your day-to-day in life easier and easier the more doors you add, which is the reverse of what we see most clients doing before they come to us.

[00:44:45] If this is interesting, reach out to us at doorgrow.com. Until next time to our mutual growth. Bye, everyone. 

[00:44:52] 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! 

[00:45:19] 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.

Apr 7, 2023

If you manage short-term rentals, you’re probably well aware of how stressful the process of giving guests a key, code, etc. can be. 

In this episode, property management growth expert, Jason Hull talks with Bobby from Jervis, a company that allows property managers to automate code-sharing with smart locks and smart garage door openers and manage smart utilities remotely.

You’ll Learn…

[01:45] Introduction to Bobby Varghese

[06:50] Smart Locks, Code Sharing, and More: Intro to Jervis

[13:55] The Financial Benefits of Automation

[19:25] Where to Get Smart Locks and Products

[22:10] Navigating Technological Issues

[24:20] Jervis for Long-Term Rentals Too!

Tweetables

“Trying to do it all means that you can never do everything correctly.”

“What is your time worth?”

“The biggest expense in the business really is almost all staff.”

“So we would love to help see you grow and we would love to help get the systems in people in place on your team so that you can handle that growth.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] I tell them, tell everyone, "you can do this yourself. You can open up the Schlage app, the August app, whichever brand app, right. And you can add the locks yourself." So the thing is, "what is your time worth?" Is what I always ask property managers.

[00:00:14] All right. Welcome Doorgrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management, business owners and their businesses.

[00:00:58] We want to transform the industry, eliminate the bs, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now let's get into this show. So today I am hanging out with Bobby Varghese. Bobby, welcome to the show.

[00:01:27] Hey Jason. Thanks for having me.

[00:01:28] Bobby has a company called Jervis Systems, which we're going to get into in just a minute, but Bobby, tell the audience and our listeners, how did you get into business entrepreneurism and eventually into Jervis systems?

[00:01:45] Yeah, that's a good question, Jason. I have a short term rental in Ashburn, Virginia. A couple years ago, actually, we started in 2017. And I was doing a lot of automation for my own sanity's sake, right? Just, I didn't want to be at the property to check a guest in. And also I know how when I want to travel, I don't want to be confined to certain times. I don't want to have to meet somebody to go grab keys, things like that. So I was trying to like, replicate the same concepts for my guests. And so I had some brilliant programmers that were working with me at the time for my rent. And we applied a lot of the automation that we use with Jervis today initially for my rental, you know, that's kind of how it all started. So we were letting guests in automatically letting cleaning companies in automatically, deleting the codes automatically after the reservations were complete. This is in 2017. So back then, Jason, Jervis didn't exist. Right? So Jervis wasn't even an idea yet. And then what happened was property managers in Ashburn, you know, the surrounding city communities heard about us doing automation, right? So maybe guests that stayed with me told other property managers and they're like, Hey, can you do this for us too? Can you manage my property? And so I had a couple of property managers message me through Airbnb, through inquiries, and they were like, Hey, could you manage my property and take on full property management? And, you know, at the time I had a full-time job. I was teaching in the evenings at a local university. I didn't have the time or the bandwidth to just take on more and more of these properties, but the concept of like building this like a software as a service platform and then being able to offer that to property managers just sounded incredibly intriguing.

[00:03:25] And it's something that we started the journey in 2019, and then it's just been learning and growing as we go. You know, lots of relationships over the years. Lots of vendors that we've connected with. You know, big brands like Schlake, August, Yale, Masterlock big companies like that, garage doors. And then over the last year we've gotten into like the thermostat world. So smart devices and not just access, getting to automate those. And then eventually we've got a roadmap this year and into next year of smart sensors and other places we want to get into as well.

[00:04:01] Very cool. So, And give the audience a little bit of background on you personally, so I know who you are.

[00:04:08] Sure, yeah. My name is Bobby Varghese, so I'm the founder of Jervis, as Jason said. I'm a US Air Force veteran. My background is as a security consultant. So, I did well, a little bit of everything. So networking, server administration and security, which really the military got me into. It was not something I ever thought I'd be interested in, and then it just kind of happened. And I found out I loved it, you know, and I got myself my graduate degree in it. I started, you know, getting certifications and eventually ended up teaching by chance at a local university here in security. And that's kind of my background. And I got into you know, just process improvement, just automation and things as we kept going on. And that's me as a person and how I got into all this. I live in the northern Virginia area right outside DC so, we've got a lot of customers locally in this area and the east coast and pretty much all over the states as well.

[00:05:00] Great. Well, thanks for your service. I think that's awesome. And I mean, it's really cool that you come from a technological background, but not just in technology. Viewing everything through the lens, likely of is this secure? Are we doing things the right way? The access matters, you know.

[00:05:17] It does. Yeah. Thanks appreciate you bringing that up, Jason, because that's actually a principle in everything we do in Jervis. We don't want to store your credentials, we don't want to know your credentials, right? So everything that we do with Jervis, when you as a property manager are connecting your devices with us. So we're going to take you to their login page, right? So that's where you're doing the authentication and the authorization to say, Hey, I want Jervis to be able to view my ABC you know, these devices, and then be able to manage them on my RPA half. And then that's when the grant access is granted. We're given like you know, a secure token basically that gives us access to it. And that's how we do all of the management. We make it a business. Philosophy on our team never to store credentials. So if, God forbid we ever get hacked, there's nothing to steal right with us. There's no credentials to be stolen, things like that. We do take security very seriously.

[00:06:15] That's great. Yeah. I mean, even with us at DoorGrow we use a vault system with our merchant provider cause we don't want to store people's credit card information directly.

[00:06:24] Yeah.

[00:06:24] The liability's too high.

[00:06:26] It is. It is.

[00:06:27] So if, you know, God forbid, but if somebody hacked us, they wouldn't have people's credit card information.

[00:06:32] Exactly. Yeah. That's smart.

[00:06:33] Yeah. So, yeah, very cool. I like that. So, when AI takes over the world and they hack everything, then they might be sort of safe still. All right. So, that brings up an interesting question. AI is a huge buzz thing right now, so I'd love to touch on that maybe a little bit later in the show. But tell us a little bit about what Jervis does. I'm starting to get an idea just based on what you've told me so far, but tell us like, what does Jervis really do and how can it help property managers and it sounds like it's very much geared towards the short term rental market.

[00:07:08] So we are geared towards property management, right? So, and that can be done in a couple of different spaces. So whether it's short-term rental management, long-term rental management we've got real estate agents using us, using like the master locks to instead of, you know, the old school like realtor access to be able to get into properties because those legacy systems are very expensive from what I've understood over the years. So, so we've got a lot of real estate agents that are trying to kind of modernize that world and using the master lock systems. So at a core Jervis, what we started with was access management. So smart locks and smart garage doors, right? So we've got, we support the MyQ based systems with LiftMaster and then we've got the Genie Aladdin and a couple brands like that. And then with the Smart Locks, we do the big players. And then there's a lot of other smart locks out there, like the Schlages, the August, the Yales, and then also a lot of other companies that are growing in popularity. And you know, there's. A lot of competitors in that space now as well, right? So what Jervis does is, or what our goal is to streamline your life from a property management perspective. And we'll use the short term rental world as an example, is as reservations come in, what a lot of property managers want is that the code gets to the guest, right?

[00:08:29] So it gets stored to a lock for the duration of the reservation. Another caveat is that's important is it's got to be a unique code. So you're not using the same code over and over for multiple guests.

[00:08:41] Yeah.

[00:08:41] And then the code expires when the reservation is completed. Right. So even after the time completes and the guest knows the code, they cannot use that same code to get back into the property. Right?

[00:08:53] Right.

[00:08:54] And what Jervis will do is automate all of those steps we just talked about, and then when the code is done, we actually wait one day after the reservation is completed with the code being in a disabled state, and then we'll remove it entirely. And the reason we keep it one extra day, Jason, is that we found so many instances where reservations last minute, they need to be extended a couple extra hours, an extra day or two. Right. So immediately deleting it when the reservation is complete. We just found that's just causing--

[00:09:28] they're immediately locked out and they're all, "my suitcase is still in there!"

[00:09:31] Exactly. Yeah. Or like, oh no, we need to extend for an extra day. And then you got to go through the entire process of adding the code all over again, which is not hugely inconvenient, right. But it's a lot easier and quicker to take an existing code and just modify like the time or the date, you know, versus like adding it entirely.

[00:09:53] Yeah. Cool. So you had mentioned a lot of other like smart devices and stuff. So is there, does Jervis go beyond just the front door lock?

[00:10:04] We do. Yeah. So besides access, so out outside of our original world of just smart locks and smart garages, we do smart thermostats right now with the Echobee, Nest, and the honeywell thermostat is coming really soon as well. And the problem that we're solving with that when it comes to property management is that you as a property manager, you can control the temperature as a guest is walking into the property. So we've got two modes with it. We call it guest mode and we call it a vacant mode. So guest mode is that as soon as the guest walks into the property, you can set your baseline that you as a property manager are comfortable with, right? So let's say you want it to be 70 degrees as a guest walks in, Jervis will take care of that set the temperature. The guests can adjust it during their stay, right? Bring it up, down, whatever they're comfortable with. When they're done, that's when vacant mode or when the guest is checking out, that's when vacant mode will kick in. And that means that, let's say in the wintertime, you don't want the heat blasting. Yeah, in the summertime you don't want the AC blasting, right?

[00:11:14] So you can set it to a temperature where your pipes aren't going to freeze, right? It's that right temperature without increasing your heating expenses or electric bills. And right as the guest comes back into the property or your next guest comes in, Jervis will set the temperature back to guest mode as you're comfortable with it or what you set it for. So thermostats is something we support now. Later this year, our roadmap is to get into smart sensors. So carbon monoxide sensing, water leakage sensing and those noise sensing things like that. That's what we will get into this year.

[00:11:51] Very cool. So there's water leaks or if there's, you know, some sort of issues going on at the property, they might get notified.

[00:12:02] Exactly. And the goal is, Jason with Jervis, we don't aim to support every device that's out there, right? So every lock that's out there, you can see that we pick and choose the ones that are the most, most stable. Another feature that we look for is that it's ideally, it's wifi directly accessible, right? So that's very important. Other locks will work, right? There's a lot of older model locks that are using hubs and wifi, adaptors. We support selective ones after extensive testing because we found that having an extra piece in the middle can often be it's yet another piece that could go wrong, right? Yeah. So if that hub stops working, that wifi adapter stops working, you can't connect to your lock, right? So, it's, we pick and choose which devices are best to support, and then we are careful what other devices we get into. It's important that it solves like a property management problem, right? Because I still have my rental property in Ashburn and we do testing of all the capabilities that we implement, we do it all the testing at my property as well.

[00:13:10] Yeah.

[00:13:10] So eating my own dog food type of thing. And I want to make sure that we're not trying to do it all because I think that is... trying to do it all means that you can never do everything correctly. You may just get to a point where you're doing everything probably 50% or 60%. But yeah, that's kind of our philosophy as well. Right? Yeah, it's probably like the 80- 20 rule. The 80% of the stuff's probably covered by 20% of the things that you could do, right?

[00:13:37] So, yep. Yep.

[00:13:39] Very cool. So, What problems is this solving for property managers? So if a property manager's listening to this and they think, well, you know, it's not too big of a deal to maybe give out a code, do the walk and do this, help them justify switching to using Jervis.

[00:13:55] Sure.

[00:13:56] Yeah. That's a good point. And if a property manager has one or two properties, I tell them, tell everyone, "you can do this yourself. You can open up the Schlage app, the August app, whichever brand app, right. And you can add the locks yourself." So the thing is, "what is your time worth?" Is what I always ask property managers. It's like we charge $5 a month per active device. Right? So, I don't know what Starbucks charges nowadays, but it's the price of a cup of coffee. For a month is what we're charging roughly. Is that worth it for you from an automation perspective to be able to focus on other things? And so, that's, I think, the true benefit that service will give to property managers. And so I'll give you an example that applies to multiple properties, but one customer comes to mind for me because we talk about this several times over last year. And they had over a hundred properties, right? And so they had a dedicated person that their entire job was to add codes, remove codes, troubleshoot customer issues of like codes not working, and just putting in backup or giving out backup codes, putting in codes, things like that.

[00:15:08] So it's one almost dedicated full-time employee or resource or consultant for x number of hours that you've assigned for this task, right? Once they set up Jervis, now to automate the process, they were able to move this person to do other tasks, right? They were doing more spot checking of codes or just issue handling, right? So automation is not perfect and again, I try to be transparent with our property managers when it comes to that. There's a lot of moving parts, right? The booking site has to send the property management system, the reservation or the updates. They got to send it to us. We got to talk to a lock vendor. So there's a lot of pieces that could go wrong or could be delayed, right. So issue handling, things like that it's always good to have a person that's available, especially as you scale to a hundred, couple hundred properties and things like that.

[00:15:57] Yeah.

[00:15:57] And so now that Jervis was doing the bulk of the work, they were able to. Reassign this person to be able to do other tasks that were, you know, more beneficial to the company, right? So doing marketing or customer service, answering emails, things like that. So Jervis was able to probably take on 80, 90% of the automation work or the code management work, and now this person's in more of in a backup spot checking role or a customer service role, and then they were able to take on additional tasks for the property manager. So they were very happy. Obviously it cut down their costs and they were able to maximize like their resources and kind of use their resources more wisely.

[00:16:39] Yeah, I mean, the biggest expense in the business really is almost all staff, right? It's people and you know, let's say that team member's $20 an hour. Well, if they can offset that by just getting these devices, you know, in place. Yeah. It could save them some serious monthly expense, especially if they're not having to drive around and do stuff.

[00:17:01] Exactly.

[00:17:01] It would be pretty significant. So now you mentioned $5 a month per device.

[00:17:06] How many devices typically does a property usually need? Before I answer that, Jason, let me just kind of back up a second there. With Jervis, we have no minimums, right? So there is no minimum number of doors that you have to come in with. We don't have a minimum threshold of the monthly amount. You could have technically one door. $5 a month and we'll still treat you at just same way as a customer that has a thousand doors. Right? So the goal with Jervis and all these automation is that you set it and forget it, right? And you shouldn't have to babysit it unless you run into problems, and then we'll work with you. But the, to answer your question, typically a home will have at least one door, right? It could be the front door that maybe the property manager puts the smart lock on. We've got property managers that go above and beyond that and maybe put it on the front door and also the garage door. Right. So that way, even though like, let's say the big garage doors, as you get past that, to actually get into the house, you have to get through smart lock as well, right? So then the way Jervis will work is that you can assign multiple locks to the same property. And if a reservation comes in for that property, Jervis will put the same code on both locks and schedule them exactly the same way. And we won't charge you separately or upcharge you for that capability. I've had a lot of property managers ask me, does that cost more? You know, or just give me, you know, they're surprised because they're expecting to be charged more for that kind of capabilities. But the average I've seen is if you just want smart lock access, one to two doors is kind of like the average. Some property managers are a lot more technology interested I guess. And they'll put the smart thermostat, smart sensors, you know, then you could start seeing three to four devices per property.

[00:19:02] Yeah. I would imagine in some areas where the temperatures are somewhat extreme smart thermostat would sort of pay for itself.

[00:19:10] Exactly. Yeah.

[00:19:11] Your utility bills for the property easily, so that would make sense. So, all right. Very cool. So what other questions do property managers typically have when they're trying to figure out why should I use this or should I use this service?

[00:19:26] Yeah, so one of the questions we typically will get is, do you have to purchase locks from us? I mean that's again a decision business philosophy we made years ago is we wanted to stay vendor agnostic, right? So we don't pitch one specific product. We decided not to make custom locks. A lot of vendors that are selling locks, they're reselling other brands, right? Or locks that are white label white labeling locks that are out there, right? We decided not to get into that world. We want to offer just a software as a service platform and be able to support as many devices as we sustainably can, reliably can. And that's a very important part of it. And so, yeah, so the question I get often is, do you have to purchase a lock from us? And the answer is no. We link on our website to where you can purchase the locks from, whether it's Amazon, who is one of our partners, but as far as like where we're linking, but you can get them at Home Depot, you can get them at Lowe's. Bill.com. They're very easily accessible locks and devices that are out there.

[00:20:34] So you provide a list of, here are the ones we recommend, here's the best ones?

[00:20:38] Exactly. And the ones we recommend are the ones that we carefully recommend because good products means less support issues, you know, for us, and that's one of the things that I have been very careful with from a team management perspective is we've got a good team and a lean team, and I want to make sure that we're not trying to support everything because that just means more headaches when the devices don't work as expected.

[00:21:03] Right. And I would imagine with the door sensors or the door locks, and the biggest issue is just the batteries and things down, right?

[00:21:11] It is. But sometimes some of the brands, you got to be careful, Jason, like, you know, there are a lot of vendors out there now. If you go to Amazon, just type in smart lock there's so many of them out there, right? So a lot of them are just companies that popped up overnight and. I always recommend to our property managers, even if you're paying slightly more. Stick with a brand that's been around for 20, 30 years. Right. So you know that they're going to be around if you need support, right? Or if the device fails on you, at least you can go, you know, claim your warranty and get a replacement, whatnot, right? So Schlage, August, Yale, Masterlock, these companies have been around decades, right? So those are always our top picks. There's a lot of other brands that are out there that we do support. Some of them are, you know, have been around like Igloo Homes has been around for a while. But we're just kind of careful of like trying not to support it all because it can cause other problems.

[00:22:08] Got it. Cool. Anything else that property managers might be curious to know?

[00:22:13] Yeah, there's a couple of other questions. I'm trying to think. Let's see what happens. If there's a power outage you kind of hit on this a little bit earlier. The locks are supported by batteries, right? So that means that if there is a power outage, your guests can still get in and out of the home. Right? It's not going to affect access to the property. When we get the reservations, we actually process them two weeks in advance, you know, type of thing. So that way it's not adding the code last minute on the day of the reservation. That's one of the things we do not do unless, you know, caveat being though, that if the reservation came in that day, obviously we're trying to put it on the lock that day, but normally if the reservation came in a week ago, two weeks ago. Well, we processed two weeks in advance typically.

[00:22:59] Yeah. Very cool. So the codes are already in there. They're not active yet. Until its time it'll be activated. And so even if the power goes out or there's an issue or the wifi or internet has a problem, that code's already in there and they can get in and out during the time of their stay.

[00:23:15] Exactly. Yep. So that's probably the number two question I get. And then third one I get often is our pricing and. We're transparent. As you can see from our website, we don't hide it from you, you don't have to talk to us first to see the pricing. We just keep it all published out there, $5 a month. We actually made a plan just for the property management system users, and it's $5 a month. I think, you know, your users will see that it's very competitive to the other players in the space. And again, I always tell our customers try the different players out, right? We all offer trials, right? So Jervis offers a one month free trial. Everyone offers a trial of some sort. So try everyone out, right? And see there's Remote Lock, there's Aperto, there's Links. Try everyone out. Try Jervis out and see what is the right fit for you, your organization for your needs. And then let us know if you've run into any issues or have any question. But those are the three questions I typically see, Jason.

[00:24:18] Perfect. Yeah. Very cool. Well, I appreciate you coming on the show and sharing this with us. So maybe you could touch on, just before we wrap on, how would this apply or be beneficial for long-term management companies and getting vendors in and out? You know, this sort of thing?

[00:24:38] Yeah, the great question again. Yeah, so we do have a lot of property management companies, let's say with hundred, 200 properties or more, and that's where our mobile app especially comes in very handy, right? Let's say they have garage doors plus smart locks, and they're different brands, right? So they may be like MyQ garage doors, and then you got smart locks from varying different brands. And so what Jervis's mobile app will do for you is that you can, you know, let's say you have 10 different teammates, you can assign them access to the mobile app, and then they'll be able to switch between the properties just in a dropdown, select the property switch very easily. Then they'll see the devices that you assign to them. So then all they have to do is click a button, and the garage door opens, click a button, smart lock, the door opens, right? Or the lock opens. And then if you drive down the street to your next property, same thing. Just go to the dropdown, select the property, see the devices, click on what you need to open. And so that's where it really benefits the long-term rental users or the teams. We do have property management companies assigning or giving access to the app to their long-term tenant clients as well. So that way they don't have to give them access directly to Schlage. Right. Directly to MyQ. This keeps it like one level removed and then kind of transparent to them who the vendor is. It doesn't matter, right? Like the guest just sees the app, press the button and then they can just get into the property in and out.

[00:26:15] Got it. So the tenant would use the Jervis App. Jervis systems, apps in order to get into, in and out of the property, they can use that.

[00:26:23] Exactly. Yep.

[00:26:24] They would just set up access for them. What about you've got this, you know, system for the short term for people to get in and out. What about for long term and short term? What about getting vendors in and out that are not your vendors? Like you need to send out a plumber. How are you creating access codes and do you have plans to integrate with some of this tech systems out there, like Property Meld or some of these sort of things where they're dispatching their vendors?

[00:26:50] Yeah, so that's a good point. So down the road we will integrate with those companies, but by contractors I imagine You mean like handyman companies?

[00:26:59] Yeah.

[00:26:59] Or cleaning companies, things like that. So the access right now can be granted through our server systems dashboard. So you can assign temporary access, right? So just like you do with the cleaning company, instead of a reservation, when you're adding the user, you're going to be selecting a start date until a firm end date, right? Or it could be the same date, different hours, starting hour, ending hour. And so that's the way property managers can do it right now. But similar to how we integrate with all the property management companies that are out there, our goal is like, to connect with these companies like Property Meld, like things like that you said. And then be able to import in the support request, you know, for a specific property. And then assign a temporary code as we go. Just like that, just like we do with reservations for properties as well.

[00:27:53] Yeah. Very cool. All right. Yeah, that sounds really cool. Well, Bobby, thanks for coming on the DoorGrowShow. Sounds like a really cool system. I think the price sounds really easy and fair, and so I'll be really curious to see what sort of response he yet from being on the show. And I hope people check you out. How can they find out more about Jervis?

[00:28:14] Sure. Yeah. They can reach us on all the social medias. Were under Jervis.systems. And then the best way, honestly, is to contact us is go to our website and just use the Contact Us form. It'll go to directly to me and our support. So we'll get back to you on our questions or anything like that or answers to any questions. And then like we tell everybody is sign up for a trial. You got nothing to lose. We'll give you one free month to try it out. And if it doesn't work for you, we understand no hard feelings and but if you run into issues, let us know.

[00:28:47] We'll be glad to work with you to fix it.

[00:28:49] Very cool. All right, Bobby, thanks for being on the #DoorGrowShow.

[00:28:54] Yeah. Thank you Jason. I appreciate your time. Thank you for having me. All right, so if you are a property management business owner and you are looking to grow your business, you are tired of being stuck in the role, in the things that you're doing that you really don't want to be doing. You're wearing certain hats you don't want to be wearing. Reach out to DoorGrow. We would love to help you optimize your business. We would love to help you come up with strategies to grow and scale your business so you can easily be adding a hundred, 200, maybe even 300 doors a year without spending any money on paid advertising. So we would love to help see you grow and we would love to help get the systems in people in place on your team so that you can handle that growth. So if that is something you're interested in, you can reach out to us at DoorGrow.com and make sure to join our free community DoorGrowclub.com. It's our Facebook group. We have some free gifts for you with the fee Bible and some other cool things. We would love to give you some free stuff and have you join our community. If you are a property management business owner, we hope to see you.

[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.

 

Mar 3, 2023

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

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

You’ll Learn…

[01:18] Introducing True Submeter

[04:06] A Submeter that uses WIFI?

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

[10:24] Warranties and Replacements

[11:25] Early Warning Systems and Alerts

Tweetables

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

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

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

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

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

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

[00:00:17] Welcome Doorgrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder, and CEO of DoorGrow. Now let's get into the show.

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

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

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

[00:01:32] True Submeter.

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

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

[00:02:40] Okay.

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

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

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

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

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

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

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

[00:05:20] Right.

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

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

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

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

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

[00:08:47] Of course.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[00:13:44] Okay.

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

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

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

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

[00:14:15] Correct. Correct.

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

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

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

[00:14:54] Bye everyone.

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

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

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