#DoorGrowShow - Property Management Growth

DGS 95: 5 Characteristics of Successful Property Management Companies with Marc Cunningham 0

Transcript

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

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

Today's guest, I’m really excited, we’re hanging out with Steve Welty. Steve, welcome to the DoorGrow show.

Steve: What’s up Jason? Good to be here.

Jason: Steve and I were reminiscing. I saw Steve at a broker owner conference, the very first one I went to several years ago and we were sitting at the same table and I guess I said hi to you and we were chatting it up.

Steve: Yeah. It's funny, I remember that day very vividly and it's interesting because I have a very poor memory. You were the mysterious man behind me and you were dressed really nice.

Jason: I don't dress nice anymore. I'm too lazy now.

Steve: Yeah, you're just soaking it all, but we were talking before the show, was that really one of your first conferences?

Jason: That was the first conference I'd gone to, yeah. My dad had just started property management business. He's got maybe about 200 doors now, but he had just started a property management business. He had been a hospital administrator for 30 years or something and he said, “I'm going to do what Bryan’s doing and start a property management business.” My brother has got maybe 1000 doors or something like that and he is out of Orange County. Not too far from you down San Diego. He thought, “Bryan’s doing it, maybe I could do this too.” He decided to become an entrepreneur.

Caught the bug. It's been fun to watch that, but I was like, “Dad, let's go do this. I want to see what happens there. The only way I can go is if I'm with you, you're a broker owner.” I was his director of marketing and I was just the fly on the wall for Orange Tree Property Management, just checking out what goes on a broker owner. I just want to see what happened there.

It was challenging for me though because the entire time I'm hearing people talk about problems, and challenges, and I'm just biting my tongue the whole time. I’m like, “I could solve that challenge. I can help with that.” I just had to sit there and be quiet. I've even got a text message from one of my clients that was sitting in the room and he said, “I'll bet this is just killing you right now,” I texted him back, “You have no idea.” It was just really funny to hear people whining about stuff that I think is solvable.

Steve: What was something out of all those issues you're biting your tongue about that you can reflect on today.

Jason: Now you’re interviewing me.

Steve: I'm interested to hear that.

Jason: I remember one of the things that really killed me was people were like, “How do you deal with your online reviews? How do you get more positive online reviews?” We have our system GatherKudos, and we have coaching material around that that we’d go through with clients to figure out how to identify peak happiness, leverage a lot of reciprocity, how to get more reviews, how to build a system in your business as part of your onboarding process with new tenants so you get more reviews. I think that's a better system to have than even most marketing systems, because that creates warm leads. I was just sitting there listening to them talk and some of the ideas were, “We're okay, we're good,” but I was like, “This is so solvable.”

Steve: Reviews are still a big issue, six years later or whatever it is.

Jason: Correct.

Steve: People still can’t figure it out. It’s tough. I still try to figure it out on a daily basis.

Jason. Yeah. Cool. Steve, you've got an awesome property management business. You've got your own podcast that you do. You've got a lot of stuff going on. Help my audience understand who you are and give us a little bit of background on Steve, your adventures in property management, and how you got into it.

Steve: For sure. I graduated from San Diego State 2005 and stayed in construction for a little while. I was working with constructions in college, just bumming around, surfing, and doing whatever I was doing. Got my real estate license finally and did some deals 2006-2007. I hear a lot of stories like this, it’s like 2006-2007 sales, all of our sales, we should start a Facebook group for sales guys that flamed out, well I think it is, it’s probably called than NARPM of Facebook group. It seemed like everyone has that story.

I made some nice checks in sales and I thought I was great, and then I became broke very fast. I was 26-27 and I was broke. I was applying for any job that I could get and I went to work for a French entrepreneur in Carlsbad as a personal assistant. He wanted someone to manage his property manager that had a real estate license because he didn't trust his property manager.

Jason: Okay, so you were the spy that was going to monitor whether he was doing his job or not.

Steve: Yeah, most managers hate it when the owner micromanages you. Imagine a realtor micromanaging you. I was like, “Yeah, I can do that,” I never managed anything in my life, but I figured it out and worked with him. He actually taught me some great business lessons looking back, but two years in, it was very stressful working for him. He was not the nicest guy, but he did teach me a lot and then I went out on my own with a business partner at the time. We decided, “Hey, let's start our own management company and just got it enough off the ground to allow me to quit my job, be on property management with my partner I think in 2008. We grew that until about 2012 and then we decided to part ways. I started Good Life in 2013 and then been doing Good Life ever since.

I started the Good Life Property Management podcast which has nothing to do with clients, nothing to do with getting new customers. It was really a passion project and something I learned out of that was that I encourage people to do content for content's sake if their heart tells them to do that. A lot of times we try to figure out, “Well, how am I going to monetize that?”

I remember when I asked Brad Larson, I think he was one of the first people to do a podcast that was a property manager. I was like, “What are you doing this for?” and he was like, “Oh, it's fun,” I was like, “It didn’t make any sense, you're wasting time.” When you add value, like Gary V—a lot of people have really put this in the forefront—when you add value to people's lives, opportunities come your way, connections come your way.

I have so much fun doing the Good Life Property Management podcast and we serve the same community you serve which is property management entrepreneurs. I don't run ads. I have ran ads in the past, but I don't anymore. I don't necessarily get anything out of it other than just meeting cool people and getting to indoctrinate my listeners with my philosophies which are really along the same lines in a lot of ways as you, Jason. I really resonate with your manifesto in a lot of ways, so that's cool. That's it.

I'm big into music. I do a lot of music. Steve Welty, I’m on Spotify and Apple, and that's my passion. I'm going more and more into that. Also, we have tried mastermind for property management entrepreneurs to max out their business and life. That's what's up for me.

Jason: Cool stuff. I think we have a lot in common. Not only are we both California guys. A lot of people listening may not know this, but I had a band in college. I wrote all the music, I played guitar. I didn’t know I was an entrepreneur then. I didn't know that was in my blood, but I was the guy going door-to-door with a guitar and a clipboard pre selling CDs at girl’s dorms that I could fund to self-produce an album, and I was playing music.

Steve: That’s [...].

Jason: I know, it was pretty crazy. The album is on SoundCloud if people are searching for it.

Steve: Let’s check it out, what’s it called, how can we find it?

Jason: My username on SoundCloud is my username everywhere, which is KingJasonHull, and the album is called Whimple, that was the name of my band.

Steve: I love it. I think you told me that a while back, but I forgot, but I'm really fascinated with that because that was my story, too. I was a songwriter. That was hustle. I give you street credit like going dorm-to-dorm, playing for chicks, that's pretty cool. I thought I was going to be a rock star. That was my deal, but it's so funny looking back. I didn’t even practice. I just thought I have the natural talent and I used to drink a lot so I was probably delusional.

I had this moment, this crossroads where I was like, “Okay, you're not going make it,” I'm not going to be okay being older and broke, so I'm going to go on a business route. I just gave up music completely, and then I was in a strategic coach workshop. I have given it up five or six years and I met this entrepreneur. I was telling him about my story. I was like, “I don't really play music anymore,” and he's like, “Oh, that sucks.” I’m like, “Yeah, it does suck.” Then he’s like, “Well, you have a guitar in your office don’t you?” and I was like, “No.” He’s like, “Well you’re the boss, aren’t you?”

Jason: I can see it right behind you.

Steve: Yeah, right now I do it. He’s like, “You’re the boss.” I’m like, “Yeah.” He’s like, “Well, why don’t you try this, try just putting a guitar in your office. Just make a commitment to picking it up once a day even if it's for one second.” It really resonated with me because I had given up a part of myself that was really important because I think a lot of time as business owners, we just get so focused on like, “We got to make this company work,” and we’d lose focus of why and what fires us up on an internal level.

I did that and that about two years ago, fast forward to today, I'm putting many hours a day into music, into song writing, into recording, into building my audience and it's helped my business so much because when you limit the amount of time that you're in your business, you can only do the things that you're really good at and so that's what I'm really passionate about, is figuring out how can I achieve an outcome with the least amount of effort possible.

Jason: Yeah, because when we add limitation or constraint, it creates the byproduct of limitation or creating a constraint is it creates a necessity for innovation. If you have unlimited amounts of time, unlimited amounts of money, unlimited whatever, there's no innovation because it's so easy to be lazy. It's so easy to just let things unfold in a different way, but when we have some time constraints or we have some financial constraints, we have to get creative and that's where the genius starts to come out, that's where new ideas start to come out.

I've noticed that even with team members, if I say “I need this done by this time,” they get creative or if I need this done under this budget, they get creative, then they start to innovate. If I say, “Yeah, do it whenever, take as much time as you want, spend as much money as you want,” there's no innovation. They're just going to go towards whatever seems easiest, which is the status quo.

Steve: Yeah, you nailed it. I've been really interested in constraints. I had a son, my first child, he’s six months old, Myles, and I was encouraged by a friend of mine. He said “Take 30 days off, Steve,” he's like “It'll be the best thing you ever did for your business. Don't check in, don't do anything. Take 30 days off. Be with your son.” It was in December, so it was like the perfect time and so I did that, and man he was right. It really levelled up my business, my team got way better. They were already good, but just putting these things into place that force you to grow. That 30 days off was huge.

Next year I'm planning a 60-day trip to another country that I’m really passionate about using that. I even got my operations manager. He doesn't work out of the office anymore. I moved out of my office a long time ago because when you're in the office, you are often the bottleneck for your company and everyone comes to you for the answers and the solutions. I really grabbed on to that concept and constantly looking for new ways to use constraints to my advantage.

Jason: I love it. It's been awhile since I've told the client to do this, but a lot of clients will ask questions like, “How do I become a business owner instead of my own best employee?” I would tell them, “You just start doing it. You take a vacation.” If you schedule a week-long vacation, if you're not taking vacations, for those listening, you schedule week long vacation and you can't take off a week, you're going to have to figure out how to make everything not fall apart for that week. To go 30 days, that's incredible, 60 days is ridiculous, that's pretty awesome. At that point, you've arrived as owner of the company instead of being your own best employee.

I noticed when I would take off time or vacation, I would be surprised by how my team would step up. I'd be surprised by the things leading up to that vacation, more would get done than would get done sometimes in months. There are so many little things that you need to get dialed in. “Oh my gosh, they’re going to be gone for a week. How are we going to live without Jason? We got to get this.” My team would say, “Hey Jason, I need this,” or, “I need to access to this,” or, “I need to know how to do this.” Suddenly everybody's rallying around this idea of taking some stuff off your plate because they need to be able to make sure things don't break and it creates the possibility for you to do that more or forever.

Steve: Yeah, and I think its baby steps. I remember when I first read the four-hour work week. I thought Tim Ferriss was a god. I was like, that makes no sense.

Jason: Did you almost move to Thailand?

Steve: Close, but no, it was just really interesting. I guess from a personal level, having time was even more appealing than being a billionaire I guess to me personally. When I see people like Todd Breen and other people talk at NARPM that would talk about running your business from the beach or not is just very appealing to me. I wanted to grow a self-managing company and it was baby steps.

There's this book called Making Money is Killing Your Business and they say it really why. It says the purpose of the business is not to make money, it's to build a business that makes money, like time and money equals wealth. Your business should throw off time and money. Now, if you want to then use that extra time to just pour more time in your business, doesn't mean you got to go live on a beach. You could do other adventures. For me, what's really worked and what I'm super blessed to have now is that it's created space in my life to actually start cultivating the other things that light me up, like music, other things. It gives you those options, but that's what I think in our industry especially in a lot of industries, we want to help people, help them anyway we can to experience that.

Jason: They say, “What the world needs is people that are alive” I think as entrepreneurs that's where we feel. We want momentum. That's what we crave. The rest of the world, they're just trying to figure out how to be happy. “If I could just be happy then everything would be great.” It's whether they're happy or sad, depressed or excited, but for entrepreneurs, I feel like our two speeds are momentum or stuck, that's it. It’s momentum or overwhelm. We either feel like we're in complete overwhelm, we’re stuck, we can't move forward or we’re frustrated, or were on fire and alive. That's my version of happy or sad. I want to feel like I'm in momentum and I feel like as entrepreneurs, we get momentum when we give it away. When we create momentum for other people, whether it's our clients or the people in our family, the people around us, when we're creating momentum for other people, we get that sense of momentum, too.

Steve: Yeah, and that's something I resonate with and I’ve heard you talk about it Jason. I love that message. I really think that the blue ocean is caring about people more than anyone else, like proactively putting the people in your life in the forefront, figuring out, “Who do I want to be a hero to?” and being a hero is usually used in a reactive way.

Jason: Right, like there's a crisis or a problem, now you're going to be a hero.

Steve: Right, as opposed to being a proactive hero like spending time and saying, “Okay, who are the most essential people or buckets or groups of people in my life and how can I serve them more deeply and impactfully today,” because the best quote of success I've ever heard is something like become a servant of many. If you wish to become great, learn to become the servant of many.

I sometimes get a little jaded in certain groups because you constantly hear the feedbacks, the reduce the cost, the get it all out sourced. I use VAs, I look to reduce cost, I look to get fair fees, so I'm not knocking that, but everyone's playing in that sandbox. I'm very interested in seeing what is everyone else doing and how can I do the opposite because that's one of the ways to become successful that I've learned is that you go zig when they zag. That’s cliché.

You can't do that when you're buried in tenant complaints and one-star reviews and a team you have to micromanage. I'm a big believer in hiring young, smart, motivated people and leaving them alone. We're a results-based company at Good Life. You can work from home, you could bring your dog, although actually our manager of our building said we can't anymore. I don't really care, with the exception of a couple like the front desk needs to be there in case someone walks in and things like that, but do your thing. There's a great podcast I heard yesterday on how I built this with Guy Raz where the owner of Patagonia wrote this book called “Let Them Go Surfing” and it's all about that.

I think our biggest issues once we get to a certain size is people problems, and then we don't know why we can't keep good people, it’s because we don't paint it in a compelling vision. We micromanage. We don't let them do what they want to do. We try to fit corporate bureaucracies into the more entrepreneurial company that people want to be a part of these days. Would you rather follow just checklists and not have a future or would you rather be able to create your own future? Like I tell my team, “You can become anything with me. The sky's the limit wherever you want to go.” So, I think those are big parts of success.

Jason: That's really what we're talking about today. The topic is freedom of time, money, and relationships through better business practices. What are some of the practices that you've implemented at Good Life that you feel like you've created more freedom of time and money?

Steve: It starts with the business owner and probably a series of game changers. The first was moving out of my office. I had this epiphany and I was taught this by someone and I told the team, we had a meeting, I said, “I apologize. I've stood in the way of you guy’s future and I apologize for it. When I'm here, I'm the bottle neck. I'm stunting your growth. You can come to me for all the answers,” and the fact is as entrepreneurs if you serve 100 people and say, “Where do you do your best work?” nobody says at their office, who does the best work at their office? Why are we working out of our offices? It's just because that's how it's always been done.

I kicked myself out. I don't have a desk at my office on purpose. I used to have the stereotypical nicest office in the corner with the best view, and then it freed up so much space, it helped my team grow. Once I created that space, now I work out of my home, and the first key to greater time, money, and purpose is to create space I believe, for yourself. I came from a place where three or four years ago, my dad always taught me outwork everyone else. I remember one time he came to visit me at a college and he asked me how much I was working, I said about 60 hours a week. He’s like, “60 hours? I work 60 hours, I'm retired. What the hell is wrong with you?”

Jason: Step it up Steve.

Steve: Yeah, and it's great. I love my dad. His work ethic was the reason I'm here today, because it got me to that. There are seasons of life. I knew there had to be a better way, so when I'd made that decision to move out of my office, I said, “Hey, you guys are going to have a bigger opportunity to move up now.” Some of the other things we did was hiring an operations manager. That was huge. That created space and that was something I look forward, and it took me probably eight or nine months to pull the trigger on that, but the operations manager was huge.

Slowly but surely, I went from just being stressed out all the time, not having any space in my life. An over-scheduled entrepreneur has no time to transform. I said, “Alright, I'm going to create some space,” and then all the ideas and all the answers start bubbling to the surface because spiritually we all have all the answers inside of us, just we’re so distracted and so just going that we don't allow it.

Jason: We’re preloaded, we're in fight or flight, we're up in our monkey brain, and all the great things, our greatest geniuses as an entrepreneur can't bubble up or can't come through when we're in that state.

Steve: Exactly, and so that's time that just forced me to get more time because as an entrepreneur, you can make that decision.

Jason: We’re buying time. Every person that we pay on our team, we’re buying time. That's what we're buying. I think the mistake we make as entrepreneurs, a lot of entrepreneurs I see, they go hire based on an org chart. They don't hire based on what they personally need in order to off load or get themselves out of the things that they don't really energetically enjoy. You getting an operations manager if you're a visionary entrepreneur is brilliant, because that's like the yin to the yang. It's the exact opposite personality type of the driven entrepreneur is to have somebody that is systems-minded, process-minded, and that can make sure everything's running. Generally, us entrepreneurs, we’re terrible managers. We think we're great at everything, but we're really terrible managers and usually the operations manager is much better at making sure everything runs smoothly.

Steve: It's hard to take off or get more time initially if you don't have the money. The money component is important. I went on a Mastermind trip to Mexico a few years back with a handful of people and we looked at everyone's P&L and that was one of the biggest game changers for me was not only understanding my numbers. I think everyone needs a CFO at least part time or at least some outside eyes on the business is so important.

Jason: I have a profit first coach and accountant. I'm not really a big fan of having a CFO in a business. Usually, my take on it is every story I've heard of embezzlement or of challenges it's always like the CFOs, and so they're also the crusher of all hopes and dreams. I don't want somebody making too big of decisions there personally, but I want to be coached, and I want to have input and I want to have insight from a third-party perspective, but I don't want them to have control over my stuff.

Steve: Totally. I get that. I don't have a CFO, we use a profit coach.

Jason: Yeah, similar thing.

Steve: Right, but I found that I wasn't going to build a business I thought I was going to build because I'm a feel guy. Like I learn by doing. Does this feel right and I’ll make a decision, but I make decisions very quickly. I'm a high quick start, so I'll make 10 decisions, eight will be bad, two will be great but in the same time that someone else makes one decision. I sometimes can stay a step ahead, but I had to add some revenues and I wanted them to be value-added revenue sources where everyone was a win-win-win, so things like doing inspections better in charging for them. When you don't charge for something, you usually do them poorly. Every manager that doesn't charge for inspections, I guarantee 90% of you are behind on your inspections.

Jason: Let's say that again. I like that concept. If you don't charge for it, you're probably doing it poorly.

Steve: Right. I'm a believer in this. Just take inspections for example. You go survey people around NARPM or any property management group and everyone's behind on their inspections so they don't do them right. We send a letter to our clients. We said, “Hey, inspections are actually really important. This is when we identify how well the tenant is taking care of the place is when we get out in front of preventive maintenance and it needs to be done well, so we need to hire someone to do this full time and we want to invest in this X amount we charge. It’s going to probably save you three times at least that amount by getting out in front of some of this stuff,” so that was a win-win and our clients loved it.

Maybe they didn't want to get charged initially, but once they saw the improved inspection, once they saw the improved communication and results, that was a big win. Then just some other ones that we added in. I think you got to keep the investor fees-friendly. The worst thing we can do as managers is fee our owners to death and they’d get out of the business.

Ultimately, the freedom of time, money, relationships, and purpose is what we want, but it's a human need. It's what your clients want, too. So, we have a unique position as property managers, realtors, and investors ourselves in a lot of cases to help people build wealth through real estate. You're a manager and you make it easy, because if you don't make it easy, they burn out and they sell, but if they hold that house specially in San Diego for 30 years, that’s all you have to do and you've set your family up for life. They burn out, so we have a big position, a big part to play here.

Jason: I love it, and I love that it’s like a mantra, having others build through real estate, and ultimately what property managers could be allowed towards doing. It’s not just managing a property. If your interests are in line with theirs, which that's their goal. Their goal is to build some wealth, otherwise, why would they be holding on to that property.

Steve: Exactly. There's different ways to do that. Right now, we're looking at some other states to buy cash flow property and figure out how to have our owners follow us into some of these other markets. I think with technology these days, that's what all the venture people are doing, how to just pop up shops anywhere. That's something that's exciting to me right now because in San Diego it doesn't make sense to buy an $800,000 house that rents for $2800. We're sitting on some stuff when the market turns for San Diego, but yeah, there's different opportunities out there.

Jason: Alright, cool. What should we talk about next?

Steve: You know what I'm interested in? I actually thought of this today, and there's some things I've been thinking about doing that I procrastinate on. You know the saying…

Jason: I think every business owner can say that.

Steve: I know right?

Jason: I call it the to-die list. We all have to do list of stuff. Just last week, I have my weekly commitments and I realized I was carrying all of these things over from week-to-week. I'm the guy that says to my clients, “If there's anything on your to do list for more than two weeks, you're not the person that should be doing it.” That's the problem. Yes, we all tend to do that as entrepreneurs. We tend to hold on to things instead of finding the right person to do them or giving it up somebody else.

Steve: That’s so true.

Jason: Talk about the to die list.

Steve: Yeah, the to die list. I was thinking about this today. Two examples of things I have been procrastinating on. One, I don't want to answer email, anymore. I literally want to have email leave my life. I have gotten email down to just like 10 minutes a day at the end of the day, have an assistant, but literally that is still bugging me. I once got this really inspiring auto responder from this really smart cool guy, let’s see if I can find it.

Jason: I don't deal with email anymore?

Steve: He said, “Thank you for your message. Perhaps you are overwhelmed by email. In fact, last year I sent 43,742 emails, read and review countless more so in order to serve our stakeholders much more efficiently, I have asked my highly capable assistant that’s in New York to review, assign and reply all my email request moving forward,” and then it says some other stuff.

That's something I want to do, but it's big and scary, and yeah, I know I'll probably have to respond to some emails, but I'm talking about eliminating it more. I'm like, “Why don’t I just try that? Why do I have to make this decision I procrastinate on forever? Why don't I just try that?” I think it comes back to we don't want to fail like that, we're always raised with, “There is no try, it's to do or die,” or whatever. You don't try, you either do it or you don't, but it's like, “Why can't I just try that? I have an assistant. Why don’t I run that for two or three weeks and see how it goes?”

The other thing and I'm sure you've probably thought of this, Jason, is like Gary V, having maybe a semi full-time person doing vlogs, recording not just every few days, like every day. I'm just sitting on that and I'm like, “Well, why don't I just try it for like a freaking month?” I think there's so much possibility with that and I wanted to see what you thought because I'm like, “I don't have to commit to it.” There's so much stuff. Even hiring someone. I was thinking about hiring a GM or an operations manager for eight or nine months. What if I just said, “Hey, let's try it.” I mean this isn’t Canada or some other places where I don't think you can fire people. Try it, hire the person, and if it doesn't work out, let them go.

Jason: Yeah. Let's go back to the email and then we can go the other thing. Here's how I identify stuff. I mentioned this on the previous episode, but I personally will do a time study probably about once a quarter and if I bring on a new team member that takes something off my plate, because how I identify what I need to get off my plate is by doing a time study. I have to be accountable. Where's my time actually going and which things are low dollar an hour work, which things are things that I don't enjoy.

I actually write a plus or minus sign next to each thing that I'm doing, whether it energizes me or it drains me, and then identify the things that are tactical or strategic, things that are self-care versus family time. I have a whole system, I take clients through for doing time studies. When I do this, that helps me get clarity for what I need to get rid of.

I gave up email a long time ago because I hated email. It was always a minus sign, it was always tactical, it was never like my hopes and dreams were coming true when I was writing an email. I don't even look at my email. So, if you've emailed me, I'm sorry, I don't look at it. My assistant will take care of the email. She reads it. If she has any questions, she sends me a message through a walkie talkie app, because I don't want to type to her. She'll send me a voice message through Voxer.

We use Voxer and I use it with coaching clients, she will send me a Voxer voice message and say “Jason, what do you think, how should we respond to this email. They're asking this.” I say, “Just tell them this, this and this, but say it nicer than I just said.” Then she’ll take care of it, and she's asking me questions throughout the day.

We also do daily huddles as a team and that's usually where she gets most of her questions in. I say, “Is anybody stuck on anything?” She's like, “Yeah, did you get my message about this?” “No, I wasn't paying attention.” “Okay, what do you need?” I answer it and she can respond to the email for me. She's gotten really good at understanding over time, she gets better and better at knowing my voice, knowing what I would say and she takes care of more and more and more. Every day she'll give me a short list, “Here are the emails I don't know what to do with. You need to take care of these,” and I begrudgingly will deal with them within a day or two.

That's how it works. [...] then I’ll talk with them and move them forward, but outside of that, usually she hands it off to my team or has somebody else in the team deal with it. If it's support-related, I think most of my clients have learned that they're not getting a fast response by coming to me directly. They get their best response by emailing our support email address or system and so I think every property manager needs to do the same. Initially, when you're small you're the guy. They probably have your cell phone number.

Tenants owners, everybody, and eventually you change your phone number and you create some barriers and protections, you have to educate and teach people how you want them to treat you, and you’re going to teach your customers what are the right channels and you have to teach your team what are the right channels. My days are pretty quiet.

Steve: I love that. That's super inspiring. You fired me up even more and I love how you said it's tactical. It's very transactional-tactical. I want to be playing in the sandbox of transformational. I feel like I'm retired now because I do what I want and I'm blessed to say that. There's been a lot of hard work behind that, but I'm to the point to where I'm not going to do stuff that doesn't light me up and there's a small subset of tasks like creating content—podcast is one of them—that I could do all day and I have endless energy for. That's where I add the most value.

So, the bigger the impact on people that I can have is going to be when I'm fired up and passionate and not dragging off of email, but I think we don't give ourselves permission to do that. You saying that, I'm all in now. I was 80% in, Jason, now I'm all in. I hope some listeners are all in to move forward.

That's what I love about podcasts and other things with so much being shared these days. A lot of times we think things, or we know things internally, or we feel things a certain way, but we don't give ourselves permission to actually say that or feel that in public because sometimes we just need someone else to say it to give us the courage.

I've noticed that happening so much lately that I finally got pissed, and I'm like, “You know what? I'm making a list of everything that I believe in whole-heartedly, that I think is a little off mainstream maybe.” That way I can have it in writing and I'm just going to start saying these things because I'm tired of being, “Oh yeah, and I felt that way, too,” but I never said anything.

Jason: I mention this on the previous episode, too, that I've been really opinionated in the past and I've realized that I think I'm a little more humble now that I realized my way isn't always the exact right way for everyone, so I'm learning. I was just in Columbus for a week and one of the things that really hit me hard is that I've been really opinionated and I think it's important to put out things more as observations rather than gospel truth. Somebody may love email or somebody may hate doing podcast stuff.

Everybody is different and I think everybody's perception is different, everybody's experiences as to what works or doesn't work in marketing could be different, their market might be different. There are so many variables involved, so I think moving forward, my content is a lot more observational because I've realized I was attracting clients or creating monsters in the industry that are hyper-opinionated and the hyper-opinionated people become like, “Oh my God, [...],” but the problem is they create a lot of negativity in the industry. They become the rampant [...] guys that are heartless, that want to crush all the hopes and dreams of every tenant on the planet. We need to be careful in any business or any industry in being too opinionated because what ends up happening is we end up attracting most opinionated people. Those are the people that turn on you. Those are the owners you don't want eventually. Those are the people that give you the negative reviews when one little thing goes wrong.

I want open minded people, and these are the clients that I’ve loved the most, but I was attracting less of them per capita because of the message that was so in your face. “This is the [...], do this,” and I was just so strong willed that way and I realize now that that creates its own monster. I think it's important to share though, honestly, these little things that we have, that are weird about is or that are woo-woo that we feel like the rest of the world will judge. To say. “This is me, this is how I am, this is my experience,” and yeah I think you when we let our freak flag fly, so to speak, there are people that run with it. As long as we're not, “Hey, this is the gospel truth. This is the only way to do it,” we're not going to turn off so much so many of the people that don't resonate. They might go, “You know, Jason, that’s cool that you're into that weird stuff, but I'm more of a practical guy and I don’t resonate with that, but I like a lot of the stuff you say.” If I say, “This is the only way to do it,” I'm forcing them to make a choice to go all in and do everything my way or the highway.

Steve: Your coach helped you nail that idea. I had that opposite issue. I think the issue for me was that I didn't want to ever come off as opinionated. I'm scared almost having an opinion because I'm like, “Do your thing, man,” so I’m always quick to anything I believe in. I'm quick to say, “Do what works for you. This is just my journey. Do what works for you.” I think like attracts like and that's a really cool observation that you started attracting all these opinionated people. The coaching thing, I love that you have coaches and you’re a coach yourself because the power of coaching has changed my life.

Strategic coach, I work with Jason Goldberg. Every time I have a call with him, I transform. It's really crazy. If there's one thing I'm super high on right now, it's co-creation. Co-creation is the super power that nobody's talking about and I've experienced it in many ways. First through music. Although I normally do music on my own and I'll just write songs. When I get in the room with the right people, they don't even have to be a great musician, it's just that the energy. If we’re vibrating on the same frequency, things just come out so great.

I played with this rapper the other day. Two of our new songs are two of my favorite songs I've recorded in the past year. Back when I had a casual mastermind that we used to do, helping each other co-create, kick this process back to you, now you kick it back to me and blah, blah, blah, everything just accelerated. So, I think outside eyes on the business, coaches, casual masterminds, paid masterminds, whatever it is, I think the more we're interacting with others and having a sounding board, the faster we're going to get to where we're going and the more transformative the experience will be.

Jason: I agree. To touch on that, every single person you'll notice, everybody listening will know this is true. You can talk about it in terms of inner energy or spirituality or whatever, but every single person that you’re around brings out a different side of you. There are people that when I'm around them, I feel I'm freaking hilarious, I’m the funniest guy on the planet. They’re laughing at everything I say. It's awesome. Then there's people that I'm around that I feel I'm super mental, analytical, and logical. That's how they perceive me and that's what they bring out in me. And there are people that feel I'm this emotional sensitive person. My kids would probably say, “No, he’s Mr. Analytical.”

There are different people that bring out a different side to us. This is also why I have a strong introverted side. I need space away from people to reconnect with who I am and to make I'm me. I feel when we're around other people, part of it is how they perceive and see us, brings that out in us, it allows us to be [...] energy and yes absolutely there's this connection and a certain combination of different people, or different energies, or different whatever that will create a different music.

You've got the Beatles, for example. These four guys came together and they created all kinds of interesting sounds and music that had a really strong impact and all them wrote songs [...], but on their own, none of them really created as strong of a situation without the others. Just the energy between Paul McCartney and John Lennon was pretty magical.

Steve: Totally, and country artists or country songwriters write typically with at least two but usually three or four people in the same room. I think there's parallels because I can speak from experience. I was constantly, with the exception of going to maybe two conferences a year, I was at the desk in my office, head down, genius with 1000 helpers, although I wasn't a genius that is just a saying I’ve heard by any stretch of the imagination.

Jason: The emperor with no clothes.

Steve: Right, the fool with too much control, and that’s the thing now. I'm in charge, but I'm not in control and that’s self-freeing. It's the people, my people that are awesome are in control and the cool thing now to get to the impact or the purpose part that is super firing me up these days is that I've gotten to a point now to where my job with Good Life is to take care of my team. It's to figure out how can I make their lives better. How can I figure out, what are their dangers, their opportunities, their strengths?

Where do they want to be in three years? How can I cultivate that? How can I make it so all of them would run through a wall for me and take a bullet for me because if they would do that, they will treat my money like their money, my company like their company. The reason I started really researching how, I was like how does the military sail hundreds of 18-year-olds across the sea and set up forward military bases. It's just mind boggling, and I read Extreme Ownership. It’s a great book, some other books, but you talk about decentralized command. The top gives them the mission and then that leader gives them the mission and then the lieutenant, I’m butchering correct words.

Jason: The hierarchy?

Steve: Yeah, the hierarchy, but they are allowed to come up with the game plan and the battle plan. One of my jobs at Good Life is to make it okay to fail. To be okay to test things and screw things up and get beat up over it.

Jason: Because if they're afraid to fail, guess what happens? They start hiding crap from you. Then there's all the secret stuff going on then there’s interoffice politics, there’s backbiting. People have to be allowed to fail and not feel they're going to have their head chopped off. Otherwise, you have a business that’s unsafe for you.

I love the idea of you giving up control, I've given up control over my email. I don't even know what's getting sent out half the time, but I've created trust and I trust her. She's very cautious in how she does it. I've given up my schedule. I was in Vegas last week, the week before that I think it was in Columbus, a week before that I was I think in Phoenix. I don't choose anymore. My assistant, she's like, “Here’s a speaking opportunity. You're going to go speak here.” She sets up these podcast episodes, everything I've given up autonomy on my time, but I still blackout Mondays and Fridays so I can do some of the things I want and then I have my weekends, but you give up control.

The higher you move up in your business, the less control you have and the more you give to the people around you. I just do what they tell me to do. I show up. My job is to support them. I love what you were saying that you've transitioned because I think as we start out as entrepreneurs and we get our first few team members. We’re always asking the question and frustrated why can't my team just do what I say. Then eventually we transition and we transform and evolve and realizing they are some of our best assets, they're supporting us, they're better at us in things that they do, they love their areas of expertise and now it's, how can I support them? How can I help them get ahead? How can I make it easier? How can I help them avoid burnout?

You also threw out the words transformational and transactional, and I think those are two very different leadership styles that I think are important to point out. I think what you’ve just been describing is you're trying to create a team that is transformational. Transformational leadership is where you give them an outcome and say, “That's where I want to go,” and they say, “Great,. We'll figure it out, we'll help you get there.” Transactional leadership is, “We're going to go here and here's exactly how we’re going to do it and we’ll do it my way,” and then there's no buy-in, there’s no ownership, they don't get to fail because if they do what you tell them to do and it doesn't work, whose fault is it?

It’s mine, but that means they can't win too. If they can't fail, they can never win, and you're never going to keep A players on your team that never get to win. This is why people get so frustrated by millennials, because they're dinosaur business owners, they're running their business like assholes, they're tyrants, they're trying to micromanage their team, tell everybody to do it, and it’s transactional. They're saying, “I'm giving you money, just do what I tell you to do. I paid you, do it.”

Millennials don't stand for that. They value themselves more. They want something beyond just being told what to do and getting a paycheck. Believe me, I have team members on my team that would just be there to show up and [...] and get their check. They don't believe in you, they don’t believe in the company, they're hypers, and they go home and complain about you, and the job, and they live for the weekends. But if team members enjoy the work and they feel they have freedom and they have autonomy, you have their discretionary time. They're thinking about you after work. “How can we make this better?” They’re thinking about you on the weekends. They do extra stuff because they're in love with what they're doing.

Steve: Totally. Now, you said that really well and I think what comes up for me as the EMyth, which was a very transformational book to use that word for me. Checklist, at certain points at Good Life, we are a results based company, but a lot of times I get pulled to these meetings it’s like this person is not… they checked the box and they didn't do it or they didn't check the box and they should have, you know I mean? What's the results? Is the days on market good? Where is his KPIs? Although they’re good, we have this back and forth. So, here's something that I want to stick my flag in the sand as something that's not conventional and goes away from my instinct which is let them figure it out. I don't care about the checklist.

We're not all going to be McDonald's. Honestly, I'm not trying to scale my business across the whole country, if I was, I probably would have to make sure everybody checks that box, but I'm really interested in the small giants approach, where it's going deep with the smaller amount of people, still having a big business that makes a big impact. I say, “Hey, look at the results. Make it a results-based company because they can own it. They have more ownership in that regard.” Something else that comes to mind was, I remember I used to walk into the office when I used to go to the office every day and people would be on YouTube and I would freaking be so mad.

They're watching some videos, I would stew about, I wouldn’t say anything right away. I would go in my office and fume. Then I remember I talked to a friend about it, someone I respect, a mentor. He's like, “Man, you got to let that go. If they get the results, who cares how many cat videos they're watching. You want a fun environment. If you go lay the hammer down on that, you're going to not have the team that you need to have to make your dreams come true.” Someone I respected telling me that was me letting go of a helium balloon. All this weight was just lifted and I was free. I didn't have to micromanage.

Jason: I think it's interesting because sometimes usually the person or the team that gets really caught up on the checklist and everything being done a certain way, that's usually the operations person. They love that stuff, and it needs to be done this way, but I think that's our job as the visionaries to remind them it's the outcome that matters. It's the end result that matters. The end result is making sure we have a profitable business. The end result is to make sure that we're honoring our customers and we're treating people well. These sort of things, if we want to get to the outcome.

How we get to that outcome, there's probably a million ways we can do it, and whether a certain box wasn't checked or certain thing didn't end up happening. Well, maybe that process is too cumbersome. Maybe it needs to be supplied, as long as getting a result. There’s always this balance. You can have a 30-point checklist that somebody has to complete, but if you can get it down to 10 steps and they can actually do it every time and it doesn't feel it’s in the way, then you're better off than the people that are operating without looking at a process document because most people don’t. They'll do it once and then just skip it. You need something that they can live with on an ongoing basis.

I think that's really important to point out what you said is that it's the results, that results don't lie, it's the outcome that really matters. So, I think if you take a step back and say, “Well, what outcome are we going to achieve? Somebody's talking about checklist not being done well. What was the outcome we were trying to achieve? What's the outcome? Okay, did we achieve it? Who was responsible for it and how do we know whether it got done or not? Okay great, well then we're good, maybe we should change the process.”

Steve: Exactly. Those are some things, but the exciting part is having freedom of time, money, relationships, the people you work with, the people you get to do business with, I know you talk a lot about firing the bad clients. That was an amazing experience, our profit went way up when we fired the wrong types of clients and getting really centered on our core values because then it's easy to hire and fire people and hire clients based on your core values.

Ours are really simple. It’s RPG: be reliable, be positive, and be a go giver. It's based off that book, The Go Giver, and it's just simple. We used to have seven or eight, but then I couldn't even remember what they were and they felt weird, so we made it really simple. Now, my business development manager just goes down the list, like, “Are they reliable? Were they at the appointment on time? Did they send you the thing they said they were going to send you?” It just makes this compass of how to do business with the type of people that are going to make you successful.

Jason: That's one of the things that coach clients through is to get clear on their three, maybe four core values because you can have a list to 10, you can have 20, but really your team aren’t going to remember all of those and you can usually boil it down to three core things. For us, ours are a little bit different. One of my core values is just transparency.

That's originally why I call my company Open Potion and in just creating transparency I think in the industry has created some various significant shifts. I think also for [...] just how I operate. That's a value that is central to me and I want my team to espouse and really our companies are just extensions of us. It's my Iron Man suit that I get the strap on every day, that's my team and everything around me. It increases my capacity. It makes me feel a super human. I'm getting more done. I've got India handling my email and Adam handing fulfillment. I feel like I’m a superhuman.

Steve: He’s awesome, by the way.

Jason: Thank you. I think of other things I'm really big on is just eliminating constraints and looking for the big constraints that are preventing momentum, so that I can create momentum. It’s all about creating momentum for my clients and for myself. I think it's going to be different for everybody. With all the different things that we are inspired or that resonates with us and I think every business owner needs to get clear on really what their values are because you can't have it.

There are only two types of team members. There are hiders we talked about that are hiding and they are living for the weekend and they show up for paycheck or there's believers. The only way you can have believers is if you have something for them to believe in. If you want believers on your team and you want clients that believe in you, you have to have values that you make transparent or clear to the marketplace or to your team so that they can they can buy in to them. It's amazing to see companies get to a large size without even having that in place. Once you get it in place, I imagine the shift is traumatic for the culture.

Steve: And if there's one last thing I would leave the listeners with that’s going to be probably the most impactful thing for me in the last 24 months was, I had this epiphany that everything worthwhile lives on the other side of fear. I knew that instinctually and I've been told that before.

You know how you can read a book, that's why they say re-read the books that you love because you read it four times and then you'll start to actually really get it. I knew that, but I didn't really get it and it hit me, it became crystal clear. I was like, “Okay, if I want my dreams to happen and be fulfilled and live a life that I want, I have to figure out what scares me and do that.”

I have a two-part test. Does it scare me, part one. Part two, does my heart tell me to do it? If the answer to both of those is yes, you do it. I even made a wristband that says, “What scares you, do that.” I don't have it on me right now, I took it off. Just to remind me and it goes back to the try thing.

All my biggest leaps came after I did something I wasn't prepared for and I was scared to do, like going to that mastermind. I couldn’t afford it, it was really expensive. Hiring my operations manager, hiring a marketing manager. I gave a talk recently at PM Grow that I thought I was going to be broke after I hired my marketing person because I didn't think I have the margin and we ended up having our best year ever.

It comes back to the try thing. Figure out what scares you, do that, try it, whatever it is. I think that's where we make our biggest leaps and that's what sets people apart from living a life that they intended to having regrets, which is the number one regrets of the dying is that they didn't live a life true to themselves, instead they lived a life other people expected them to live. That's the thing that scares me more than anything in the world and so I’m passionate about sharing that message.

Jason: Steve, it’s been awesome having you on the show. I'll second that. It really is that voice deep down that is that voice of truth, and also you can ask yourself deep down, “Do I really want to be doing this?” Deep down, “Should I be doing this thing?” Deep down, “Does this really resonates with me,” and if the answer isn't a, “Hell yes,” then there's a lack of congruency and I think that's where you're saying your heart is yes. I think [...] of something that isn't working is the death of something inside you. It means change, something has to die.

You want to know what's really interesting? I've noticed a lot of this on [...]. The scariest thing to kill or to allow to die is the fantasy of something great. I’ll explain this, I've noticed this a lot lately with business owners. They have this fantasy of having a really healthy business, or having a business that is growing, or a business that they contribute, or they get to do great things, and that fantasy is so exciting to them and juicy to them that they don't want to take action on it, because to take action on it means they have to kill it.

They have the brutally pull out the knife and slaughter their fantasy the second they start taking action towards it, because now reality sets in. Reality is never going to be at that level that the fantasy was, but it's better because it's real. I usually use the example of my friend in high school that wanted to be a rock star, which sounds like you. You had to eventually give up the fantasy of being a rock star or you have to choose into it fully. He had this fantasy of being a rock star and he would buy expensive guitars and amplifiers, and he wouldn't take guitar lessons.

He won’t love the fantasy of having this fantasy of being a rock star and as long as he can buy cool guitars and keep imagining this future that would never happen, he was happy, but he didn't want to go sleep in his car and do gigs, tour round, work his butt off, and practice nine hours a day. He didn’t want to do any of that. That's reality. Reality means some work.

Initially, if you're listening to this and you’re like, “This is great. Jason and Steve have these companies and making all this money, they've got their assistants. It must be so nice for them.” They're probably listening and going, “I don't get it. I'm not there.” You may have to be the person listening that you right now, it's time for you to double down. It's time for you to hustle. It's time for you to do stuff that scares you. It's time for you to get off of the fantasy of whatever you're hoping of doing or hoping of starting to really get out there and do the work, the hard work to make it happen and you listen to that voice, you get to that place. You get to that place eventually where you're now are able to focus on your team. You're able to be a coach and a mentor to people around you instead of the person trying to figure out how to get everybody to do everything.

I think that transition really involves taking those scary leaps. I think every coach that I've hired was a leap. None of them were cheap. Every coach I've hired, every program or training I bought into, some of them I couldn't even afford at the time. They were risks, but I knew deep down it was a yes. I just knew it was a yes and it terrified me.

I think for those that are really analytical and logical, they're like, “I don't get it Jason,” but for anybody else listening. If you have that voice deep down inside that is saying, “Hey, this is what's next for you. You've known it. You've been avoiding it and you're trying to figure out how to make it all feel safe, take the leap, and jump and do it. Worst case scenario, you're going to learn some powerful lessons.” I had lessons where I spent a lot of money and it didn't work out. A lot of money. I've probably lots of money making some bad choices, but I wouldn't trade those lessons and I've learned from them.

Steve: Yeah, and money is just one side of it. Making a decision to be a different person, or to take more time off, or to go into a completely different field, that's probably the easiest one to do is scratch a check for something. Sometimes our way of being is probably what gets in the way of most of our issues because you can't solve the problem with the same mind that created it.

Creating some space and getting clear always helps, getting clear on what you're trying to do and the life you're trying to live. At the end of the day, we’re the writer, director, producer of our own store and I love how you said, you kill off the fantasy because that's true. It's scary.

I think that's why a lot of people don't delegate it or it takes so long to delegate because it's scary. If you give that up, what are you going to do? Then you actually might have to sit with yourself and figure out what's next and nobody wants to be alone with themselves. That's a scary place. It's through the work, it's through conquering those demons slowly over time that I've seen good results, so it's a process. Take it easy on yourself and do what's doable. I beat myself up a lot over the years and it's I think we're all pretty ambitious. Don't kill yourself. Life's too short. Just have fun with. Do what’s doable.

Jason: Well, Steve, it’s been awesome having on the show. I'm sure we could jam over and over and over again about all kinds of cool things. I appreciate you being here. Fun having you and I think there's a lot of really good takeaways for people that are going to listen to this or relisten to this and thanks again for coming on.

Steve: Yeah, thanks for having me, Jason.

Jason: You're welcome. How can people get in touch with you or some of the stuff that you're doing?

Steve: If you have any questions you can always email me steve@goodlifemgmt.com. Then check out the podcast, Good Life Property Management Podcast, we love that, and then Tribe Mastermind Podcast with me and Jordan Muela. Those are two podcasts that are we have a lot of fun with, that are around business, mindset, and all that good stuff.

Jason: Cool. All right. Great. Thanks Steve. I appreciate you.

Steve: Thanks so much for having me, Jason.

Jason: All right. That was fun. If you are property management entrepreneur and you don't have a coach, I recommend that you find somebody. Find somebody, find the best that you feel you can afford at where you're at right now. Get some input from somebody else. Find a mentor, find another property manager in your state. If you need to, find somebody that you feel you can lean on as a resource.

Nobody has to be alone in business and I think one of the biggest pitfalls that I had early on I think most entrepreneurs have is that we feel alone. We feel we're weird, we’re different. We are, we're different than a lot of the world, but there's plenty of people us out there and so make sure you have somebody that you can look up to, that you can lean on, that can give value to you and it's never just one person. Keep going. Keep doing this. Keep feeding into yourself. That's always an investment that's going to pay off.

If we can help in any way with that, I would be honored. You can reach out to us at doorgrow.com and we would be glad to support you in the beginning of that journey towards your growth. As always, to our mutual growth. Until next time. Bye everybody.

Download this Episode

Sep 10, 2019

Property management is hard enough. As your business becomes successful, don’t always say “yes” or “no” to everything. Owners are coming to you to solve a problem. Step into potential opportunities without being pulled in multiple directions.

Today, I am talking to Marc Cunningham, President of Grace Property Management, who identifies five characteristics that define successful property management companies.

You’ll Learn...

[02:42] Entrepreneurial Footsteps: Marc grew up in real estate property management world working for his dad, who founded Grace Property Management in 1978.

[04:02] Doors in Denver: Grow slow and steady; from 110 to 1,000 doors.

[04:32] Mantra: Follow the opportunity.

[07:15] However you define success, companies follow some of these five standards.

[07:56] #1. Filter and Qualify Owners: Don’t take every owner that comes along.

[20:04] #2. Know your numbers to know how well your business is doing.

[31:43] #3. Focus on profit, not door count. People are willing to pay for additional value.

[37:20] #4. Have systems and processes in place, and follow them.

[43:50] #5. Recruit, develop, and retain talent.

[52:28] Marc’s Extra: #6. Hold weekly one-on-one meetings with each team member.

[53:15] DoorGrow Extra: #7. Invest consistently in your own development.

[56:27] DoorGrow Extra: #8. Get coaching to help grow your business.

Tweetables

The more successful you get, the more opportunities come your way.

Cycle of Suck: Taking on bad owners, you get bad properties, tenants, and reputation.

You won’t regret firing difficult clients, despite emotional and operational costs.

Track metrics regularly because numbers make a difference.

Resources

Grace Property Management

Marc Cunningham's Email

Business Health Check-up Form

DGS 25: Why Every Property Manager Should Implement Profit First

DGS 80: Automating Your Business with Process Street with Vinay Patankar

DoorGrown Cold Leads Calculator

DGS 94: Lead Gen and Growth with Robin Reed of Concept 360 Property Management 0

Transcript

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

Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.

This guest that we have today is a fantastic gentleman named Marc Cunningham. Marc, you're not a stranger to most people probably listening to the show. Welcome to the show.

Marc: Thank you for having me, Jason.

Jason: I'm really excited to have you here. It's strange that you haven’t been on here yet. At the beginning of the show, I was like, “Have you been on here? You're like, “No.” I said, “It's long overdue.”

Marc: I’ve just been waiting for the invitation.

Jason: Okay, well I'm glad we finally got you invited. I’m glad you're here and today's topic is going to be the five characteristics of successful PM companies. Before we get into that, I want you to share a little bit of your background to qualify yourself to the audience, help them understand how you got into property management and what your connection is to these five characteristics of a successful company.

Marc: Absolutely. Let me start by asking you a question. What were you doing in 1978 Jason?

Jason: 1978?

Marc: Yeah.

Jason: I was probably pooping in a diaper and drinking breast milk.

Marc: Okay. That image there.

Jason: I was born in 1977.

Marc: Okay, so you’re one. I wasn't much older than that, but in 1978 my dad decided that he was going to quit teaching—he was a middle school teacher—and he was going to follow his entrepreneurial real estate dream. We opened up a real estate property management company Grace Property Management 1978 in Denver. I was employee number one because I was pre child labor, so my dad would have me doing all the things that kids probably shouldn’t do. He would have me showing properties, mowing lawns, collecting rents, and filling out lease, just anything that needed to be done. I grew up in that world, so it really gave me a unique view into real estate, into property management, and just in the business because that's all I knew. That’s all we did.

As I got older, I’d take my summers, I’d worked for him in the summers, and again just doing whatever needed done. If I get really lucky, if it gets too hot out, I’d work in the office. When it got over 110 degrees, the deal is I get to come into the office, otherwise I’m mowing lawns. I did that for many, many years. I went to Colorado State University, I studied finance and real estate there, and I was working in Cheyenne, Wyoming doing accounting work there. My dad called me one day and he said, “Hey, I need to hire a property manager, are you interested?” Well Cheyenne Wyoming, with all due respect, isn't the most fun place to live, so I jumped to that opportunity and that was about 20 years ago, 20 some odd years ago.

I joined the firm permanently at that point in time. At that time, we were relatively small, I think we had 110–120 doors and we have grown slowly and steadily over the years. Today, we do both residential and commercial. We've got just under a thousand doors that we manage. We do real estate sales, we do property management, we’re investors ourselves—I own some stuff—we flip. Our mantra is follow the opportunity. If there's an opportunity to real estate, we want to look at that, whatever that is. So, that's how we've gotten to where we are today.

Jason: I was just down in Vegas speaking to a group of property managers and they were bringing up like, “How do I avoid all this distraction and move the business forward?” What I said to them is opportunity is I've noticed is what kills entrepreneurs. How do you keep following the opportunity at all times but also keeping your focus narrow enough that you're actually moving forward.

Marc: That's a great question. That's a really good question and that's hard. It is really hard because we found that the bigger we get, the more successful we get, the more opportunities that are out there. At this point, we're of the belief that you've got to say no to almost everything. I think it was Steve Jobs that said, “The difference between successful people and really successful people are the really successful people say no to just about everything.”

Jason: Following the opportunity as a mantra doesn't mean saying yes to every opportunity.

Marc: It does not mean saying yes to everything. You need to consider everything. What I don’t like is people say, “No, we don't do that.” For many, many years, for example, we didn't do real estate sales. “Hey, will you help me sell my house?” “No, we don’t do that. We only do property management.” We didn't consider. Well then, one day we thought, “Maybe we should consider it,” and as we considered it, we realized, this is a really good opportunity that we should capitalize on.

Where when an owner says, “Gosh, I want to sell my house. Would you guys be interested in buying it?” “No, we don't do that.” Well, stop saying, “No, we don't do that.” At least think about it, consider it, and I think that's the way to step into some potential opportunities. But yes, you have to be cautious or else it will get you pulled to many directions.

Jason: Relevant to that, how many of these units are now in your own portfolio, are yours or your company's?

Marc: I don't have a real big portfolio. I'm a pretty conservative guy, so I'm a buy-it-pay-it-off kind of guy. I've got 10–12 rental properties in my portfolio.

Jason: Let's get into these five characteristics that you feel define a successful company, and you're obviously a successful company. You've helped keep it successful, right? Second generation, so let's get in number one.

Marc: Yeah. I don't pretend to be a guru. I can't stand the guys that stand there, beat their chest, and say, “Do it like me, I know what I’m doing.” This is just from our perspective. We worked with a lot of companies and I didn't get this, but I do a lot of PM coaching in business stuff on the side with PM companies helping them get better, basically. We know a lot of PM companies, we've worked a lot of PM companies and there seem to be some standards, some things companies that are successful, however you define success, are going to follow some of these aspects. This is not meant to be an exhaustive list by any means, but it's the way that we gauge ourselves.

Jason: This will be cool because I probably come from a very different perspective. You're in the industry, you do this in Denver and I don't have any rental properties. I don't manage. I'm not a property manager. I have largely been this nerdy fly on the wall that's been able to see inside of hundreds of companies. My perspective might be a little bit different, but I'm sure there's some alignment. Let's get into number one.

Marc: Number one is successful companies don't take every owner. They don't take every owner that comes along. So you agree with that one?

Jason: Totally. If anyone's heard my show, they've heard me talk about the cycle of suck, which is it starts with filtering owners. Like if take in bad owners, you have bad properties. It doesn't matter how amazing they are. If you have bad properties, you have bad tenants. It doesn't matter how much tenant screening you do. If you have bad tenants, you have a bad reputation because you have bad owners and bad tenants. Nobody's happy and this is where I think the entire industry as a whole in aggregate sits right now. It has a bad reputation because they're taking on any owner.

Marc: Yeah, I would agree. The concept is this. Any PM company knows that if a tenant, a prospective tenant walks in the door, an applicant comes in and says, “Hey, I want to rent your property,” every property manager is a little bit skeptical. They raise their eyebrow. They say, “Okay, well maybe. I’m going to qualify you.” We know industry-wide that whatever the number is, call it 25%-30%, depending on the market you're in, the 25%-30% of the applicants are not going to make good tenants. Everybody would agree upon that. Well, we really believe that probably that same percentage 25%, 30%, 35% of prospective owner-clients are not going to make good owner-clients. The challenge comes, how do we filter them? Because if it's an applicant to rent a property, we have them fill out a rental application. We go in deep.

That's the hardest part of the business is qualifying those folks. So, how do you qualify an owner? That’s where the challenge lies. If you called our office today as a prospective owner-client and you are talking to our new account specialist or one of our PM's, they would have a dock in front of them, a piece of paper, and a lot of this is just basic questionnaires—what's your email address, what’s the property address, tell me about the property—but at the end of that questionnaire, they have four questions. Yes or no questions that they have to check the box on yes or no. They have to discern this information during the conversation with you because it helps us qualify these owners.

For example, the first one says, “Is the owner financially stable?” If during this conversation you as my prospective owner say to me, “Hey Marc, if you can’t get this property rented next week, I can’t make my mortgage payment. I've got to get this thing ready quickly.” Well, you're not financially stable, right? That's going to be a no on that box, that's the first question.

Jason: “So, are you current on all your house payments?” One of my clients said that was a favorite question they would ask. If they say no, it's instant disqualification.

Marc: Absolutely. Then the second question we have to ask ourselves is, is the client emotionally stable? That can be a hard one to discern. I always tell people, “Don't ask them the question verbatim, okay?” It will get you in trouble.

Jason: “Are you sane?” Yeah.

Marc: Exactly, but we need to be able to discern that information from the conversation. Is this somebody who's going to be stable when things go bad because at some point in time it will.

Jason: Right. Sometimes, people will reveal their emotional instability pretty quickly, right?

Marc: Yes. I tell my PMs, “Look. Two quick keys. If they cry on the first conversation or if they own more than two cats, they are not emotionally stable. Run away from them.”

Jason: Might be a little biased against cat owners. What’s cat owners like?

Marc: I know. You just lost half of your audience because of my personal bias.

Jason: No, they’re cool.

Marc: I am as well. Then the third question we ask is, “Can I control the situation and the client? Are they willing to give me control?” Not in a puppet master, I'm going to be the mean guy, but they have to give me control. They have to be willing to do so. Then question number four is, are they realistic in expectations? Do they think that we should be able to get $2000 a month for property that's only going for $1000? Or do they think that we should call them before we ever spend a dime on maintenance? That's just not realistic. That’s not going to happen. If we can't check the yes box on all four of those, then my PM does not have permission to work with that client.

Jason: I love the idea of figuring out if they're willing to relinquish control. That's such a big thing because they're coming to you to solve a problem. I've noticed with clients that they're not willing to be strong enough of a fence for people to push against to elicit trust enough for people to relinquish that control. I think a lot of people will push. They might look like bad owners, they're trying to test the fence, and it's like in dating how girls will crap test the guy. They just want to see if they can handle them or if they're willing to be strong enough. I think a lot of times property managers will try to be nice and maybe don't have enough bite or drive and they’re really looking for somebody they can feel safe with, so they test us.

I think clients will test us and then they're willing to relinquish control at times. It’s just something I've noticed during the sales process because I deal with entrepreneurs. They’re driven people and I need the same thing. They need to be willing to relinquish a certain amount of control because I'm asking to do crazy stuff, like fire doors or change your business name.

I love that idea, and then are they realistic in their expectations. If somebody says, “Hey, I want to add 500 doors in the next quarter,'' then that's probably not going to be realistic. I want to make sure they're in touch with a reality that I feel I can give them or lead them towards and it's the same with our property management clients.

Marc: Yup, and if we set those filters on the front-end, that's just going to make things so much easier on bringing good clients on because our business is hard enough without having difficult owner-clients. I think there’s the second aspect of that is, “Well, gosh. That's great. I wish I would have heard that before I took on Mr. Crazy,” so, what do you do then? I think the other part of that—you alluded to this—is sometimes you do need to let those clients go, and sometimes that's the best thing, because we're talking about what successful companies do. Successful companies realize that, “Hey, if we made a mistake, we brought on a bad client, we need to let that client go, whatever that looks like.”

Jason: There's always going to be those mistakes. We cannot always know and perceive every person coming in and know that they are emotionally stable, or that you can control them, or that they will be realistic, but when they start to reveal those colors, we have to be willing to let them go.

I've made bad decisions in bringing people in as clients and I have had to let them go. Some of them were just really like verbally abusive to my team. You’d be really amazed at some of the types of people that that can somehow leak through even if you have pretty good qualifications at the beginning. I love what you're getting at here because really anybody that studies sales in any capacity knows that qualifying a prospect is at the outset. It's really mind boggling that people would not qualify their prospects in any regard.

Marc: I’m curious. You said you had to let clients go. How have you overcome the internal thought of, “Ooh, but that's money. That's a big chunk.” When do you decide? How do you decide? Is that an internal struggle for you?

Jason: Sometimes. There's always a negotiation and it's a balance. It's a balance between the money aspect and the cost with the team. Ultimately, my team I want to keep forever. I want to keep them long-term. If I keep that client on, I’m saying to my team, your feelings don't matter. I don't care about you. That sends a really painful message and I've noticed this in property management companies.

People wonder why there's so much turnover with their staff and I think one key reason is because you're allowing your staff, you're forcing your staff to tolerate too much. There are some of these owners that should be let go, and I've said many times to clients, “The hallmark of a seasoned property manager is that they fired some clients.” Some businesses have hundreds of doors and they've never fired a client. I know if they've never fired a client, they have some bad things in their portfolio. There's some pain in there and that's a difficult place to work. They’re not willing to let go of painful situations and there's always going to be painful situations.

Marc: Yeah, and I've never talk to a PM who did let a client go who regretted it.

Jason: Never.

Marc: It's hard, it's scary. We face that. I remember very vividly when we were small and we had 125 doors, maybe. We had a client and had like 12 properties. I remember the guy, could see the guys face. He wasn't a bad guy, but he was just difficult and it had to be his way. He would contact us all the time. He just drove us crazy. We finally decided we needed to let the guy go. Well that was like 10% of our portfolio. That was hard. We thought about it, we don’t know what to do, and even after we did it we thought, “Oh, is that the right decision or not?” But we quickly realized it's like a load that’s been lifted. When you get rid of those people that sucked that time and energy and life out of you, it is a positive thing.

Jason: The operational costs, the emotional cost when all of that falls by the wayside. I've never had a client fire something. I had one person fire half their portfolios like one big property. I had one person do that and they were terrified, but they did it. Two things happen almost every time. One, they replace the income really quickly. It always, it creates some vacuum in the universe, I don't know what you want to call it, but they always seem to replace the income really quickly with better doors. That always seems to happen. They just need to trust that's going to happen. The other thing is, is they always say to me, “I can't believe I didn’t do it sooner,” like they wished they had done it sooner. They were so afraid of doing it and then once they do it, they realize it wasn't so bad and they wish they were like, “Why didn't I do this sooner?”

Marc: If one of your clients is talking to you and you're saying, “Hey, you need to fire this owner,” how do you recommend they do that like? What should they say? Should they say, “You’re fired”?

Jason: You’re interviewing me now.

Marc: Yeah.

Jason: There's a few ways you can let them go. There are some creative ways. One of the best is just raise the fees. If [...] make it worth, just make it more expensive. Say, “Hey this property is difficult. You're a bit more challenging person to deal with, to be honest. We are willing to keep doing it, but it's going to cost X.” So, you just raise the rate, and if they keep being annoying and you feel like it's still not worth it, you keep raising the rate until they self-select themselves out. That's one easy way.

Another way is to just refer them to somebody else, and if you're going to refer you might as well get a nice referral fee out of it. Go to one of your buddies and one man's junk is another man's treasure. I mean they might know how to deal with this type of person. They might be a better personality fit for this type of person than you. Don't just instantly assume that because you can't tolerate them or their difficult for you, that everybody else will. Give them to somebody else and let somebody else have a shot.

Marc: I like it. We will rarely fire an owner, but we will as you just suggested bump fees up and up until they decide to fire us. I’d much rather have them fire us and leave on their terms.

Jason: Right, they’ll self-select out. Are we complete on number one?

Marc: I think so. Number two is successful companies know their numbers. I see this so often with PM companies. We get really good at the logistical side of we know how to lease, we know how to talk to owners, know how to collect rents, but when it comes to the numbers, the financials, we just don't know what we’re doing often times. I really am a big believer in that concept that if you don't know your numbers, you don't know your business. You don't know how well your business is doing.

One question I’ll often ask of coaching clients that I work with on that side of things is also, “Okay. Now, if you, Jason own a PM company, at what point in time do you close the books for your company? Let’s say the month of June ends, right? We’re here almost until the end of June. When June closes for you, how quickly will you have your June books closed so that you know how much money your company made in the month of June?” The answers always surprise me. They're all over the board. “Well, I'm currently 90 days behind. I’m trying to catch up,” or, “I'm not much further behind in that,” or, “I might get it towards the end of the following month.”

Jason: Yeah, how can they make business decisions if they’re 90 days in the rear-view mirror? Imagine trying to drive a car like that.

Marc: Like I said, I've been doing this for many, many years. While we were small. like anybody else, I was everything. I was the janitor, I was the accountant, and I was everything. My favorite day of the month was always the first. Not because we collect rents, but because on the first day of the month, I go online and print out our company bank statements for the last month. I get our paper checkbook out and I’d reconcile. I’d get our ending balance and I enter it all into QuickBooks. I can look at that piece of paper and say, “Hey, how much money did we make last month?” I love that. I would wake up early to do that.

I'm weird, I know, but that's how you know how well you're doing, I wouldn’t wait until the second, the third, the fourth, the twentieth, that's crazy. You can do it on the first. So, I'm a big believer in as soon as possible, which in this day and age it can be pretty much immediate. You get your books balanced, you run some numbers, you see how your company is doing it, and you’ve tracked some metrics, some internal metrics for your company to know how you're doing.

Jason: I think the challenge is when property managers are holding on to something that's not in their particular wheelhouse or area of genius, but if this isn't your thing, if you're not like Marc and you don't love doing this and this isn’t like what makes you thrilled and excited is to get in your bank statements and numbers, have somebody else get everything ready for you. I've got a profit-first coach and accountant. She meets with me and goes over everything with me. I get not only my perspective, but she says, “This is what it looks like to me, Jason,” so yeah, I think it's usually helpful to do a review every month and look at your numbers.

Marc: Yup, and like you just said, most folks aren’t as weird as I am as it comes to that stuff, and that's fine. But you need to find someone weird like me. You need to find someone who can go get excited about running your numbers, make sure they do it, and then you review those and you track a couple key metrics.

For example, some of the metrics that we always track, are door counts proportional to owner count? Because that’s a sign of a healthy business. So for example, if your company has 100 doors, if you’ve got 100 owners for those 100 doors, that is the sign of a very healthy business because it means that you don't have any one owner with too much control versus the guy the guy called me a couple of weeks ago and he wanted to know if I was interested in buying his business. I go, “Tell me a little bit about it.” I think he had like 75 doors, “I’ve got 75 doors, I’m here in Denver and interested in selling.” One of the first questions I always ask is how many owner-clients do you have? He had 75 doors and 4. I was like, “You know what? I don’t need to know anything else. I'm not interested.” Why? Because if we took those doors on, that's four owners. That’s a lot of control.

Jason: If it’s two of them, then what are you getting?

Marc: It's something that you can't control, but you need to track it, that's one of the things you want to track on a regular basis. Another metric we really like to track is the percentage of our overall income that we spend on employees. Because in our industry, that again can just be all over the map on companies. Do you have a number on that that you recommend to your folks on what that number should be?

Jason: It varies so wildly especially by market, but I know an owner that has 65% profit margin in his business.

Marc: Wow.

Jason: I know it's ridiculous.

Marc: It’s a good thing I’m sitting down.

Jason: I know. He has a couple of hundred doors. It varies so wildly and it depends largely on the type of owners they're taking on, the type of property, because—I’m talking about this in the cycle of suck idea very often—if you take one bad owner or one bad door property, can have 10 times, maybe even 100 times the operational cost as a good door. So, that can vary so wildly.

I've had a company come to me that had 500–600 units under management and wasn't making a dime. I said, “How is this possible?” They’re like, “Well, we're doing $3 million a month in real estate,” so there was a brokerage with a cancerous tumor on the side called property management. He had twice as much staff as he needed, no technology in place. Fast forward, he fired half his team, he fired about 200 doors, maybe 300 doors, and it's now a very profitable company.

So, it's not all about doors and staffing is always going to be the highest cost. If you can replace even a fraction of that or create some leverage for your team using technology, outsourcing, whatever, those are some big wins financially. A lot of times everyone's looking at, I got to get more revenue in and they're not looking at their expenses. That's why I'm a big fan of the profit-first system which says, “You take out a portion for profit and then what's left over is your expenses.” Most people are like expenses. You’re just revenue minus expenses and then whatever's left over, there's nothing left over typically in that situation.

Marc: Absolutely. We have that profit is almost like an expense item that we know we’re going to take out every month and put into a savings account. We've been doing that for a long, long time from that aspect. But yes, I agree 100% with that aspect of what you're saying there. The number that we coach folks around is you don't want to go over 50% of your total revenue to staffing costs regardless of your size. The bigger you get, the more that number's going to probably creep towards that, just because you get more overhead, you get more managers, and you have more red tape, so that's a natural part of that. But if you go over 50%, that's a red alert. Something's wrong from that standpoint, so that an important to track for every company.

Jason: Yeah, as a company scale, they're able to create a bit more leverage, but yeah, I could see how when you're really small and you're doing everything, your employee costs are a bit less per door because assuming your free labor or maybe if you work for your dad. Or sometimes it’s a spouse. They’ll have their spouse as their business partner, and you'll see them get to maybe 70-80 units, they’re tapped out, and they can't afford to hire their first person. Nobody's getting paid. That makes sense. All right, I like it. Anything else on number two, knowing the numbers?

Marc: The other things I would just add that's worth tracking that I often find companies don't track this well enough is how many doors they’re adding and how many doors they’re losing. It’s always a surprise to me is when you ask them that, they'll say, “Well, I can dig it up, but I don't know.” A lot of the software don't track that. If we’re old school, we’ve got the spreadsheet. Every time we lose a door, we go to our spreadsheet for the year, we put it in, and it's going to keep that auto tracking. Every time we sign a new one up, put those on the spreadsheet so we can pull that up and instantly see, “Okay. As of right now, we've lost X number of doors per year and we've added X number of doors.” So, track that. Don't make that something that you've got to go dig in your software and try to pull a report. That needs to be one of those metrics that you're tracking at least on a monthly basis.

Jason: Yeah. It's a pretty difficult situation and it’s a common one where you’ll see somebody adding a door and losing a door just as often. They wonder why they're not getting growth. Sometimes, the problem aren’t getting enough [...], it’s obtaining doors. They could be the type of target audience that they're going after, it could be that they are lacking some awareness around how to retain these clients or whatever it might be, but yeah, that's an important thing I think to pay attention to.

Marc: Yeah, and to track the percentage of doors lost. That's all over the map as well. If you can keep your losses on an annual basis in the single digits from a percentage standpoint, that's pretty good. If you can keep it 10% or below on doors that are leaving you every year, you're in the pretty rare group of PMs.

Jason: I created something for property managers called our cold leads calculator. One of the things I noticed with a lot of companies—this is more relevant to what I do—a lot of property managers are not paying attention to the amount of money that they're spending on cold lead marketing—pay per click, SCO, APM leads—all these different places at social media marketing, content marketing, that they're paying to generate business. A bulk of where most people get their deals and leads from I find in the industry is often word-of-mouth, so they just group everything together. All their warm leads from word-of-mouth, referrals, other cold lead marketing, and they're not paying attention.

When you look at the numbers alone of the cold lead marketing, which everyone can check it out by going to doorgrow.com/coldleads, they can take this little questionnaire and go through it, but it'll help you calculate your cost for cold lead marketing. It also calculates and factors in the time. Time is worth money and it calculates and ask what that time is worth, like what's your hourly wage or whoever is following up on these, how much time does it take to follow up on these, to create a real aggregate or at least close aggregate cost of what one cold lead is costing you.

I’ve seen numbers. I just had one come through the other day. One cold lead was costing them $5000. I've seen $11,000, I've seen a $1700 per lead or per acquisition per deal and what I love to ask them when I get them on the phone, I say, “Hey, I saw you fill out this cold lead thing. How long does it take you to recoup $5000 on a contract?” and they’re like, “Well, that's probably three years of free management or two years whatever.” Then their perspective starts to shift and we have to uncouple that. The transparency in numbers helps you make decisions as a business owner.

Marc: Yup, and then review them regularly. Don't just leave it your accounts. If you're a successful PM company, you're looking at those numbers because those numbers make a difference.

Jason: All right. We’re on to number three.

Marc: Number three is a good lead-in as you were just talking about there. Number three will be successful companies focus on profit, not door count. You've already talked about this. This comes up so often in our industry, what's the first question any PM ask another PM? How many doors do you have? What’s your door count? How many doors are you managing? That's the measuring stick and it’s the wrong measuring stick because I know companies that are smaller, they're very profitable, and I know companies that are very large that are not profitable at all.

Door count is irrelevant. The profit is what matters. What that means is practically speaking, if you've got 50 doors, I would say, “Before you say I another 50—that's fine—but you know what? Let's maximize the profit of the existing group you have.” That doesn't mean just go out and nickel-and-dime everybody, but it means what other services can you provide? What other things can you put in place to make sure that you're maximizing that income and that’ll have a dual impact in that you're going to increase your income on that 50? Then when you pick up your next 50, now you've already got some structures in place to ensure that they are profitable as well. You've got to focus on the profits, on the revenue streams to be successful.

Jason: Absolutely, I don't think there's ever been a property management company that I’ve seen that is not leaving some money on the table. There's always additional services that you can offer, even if it's something little like filter easier petscreening.com. There's always some additional value that you can offer and there's always a way that you can monetize that. People are willing to pay for additional value.

Marc: On the flip side of that as well, I think we need to pay attention to those expenses because what the industry right now is more difficult than it has been a long time and folks that have not been in the industry for too long, they’ll recognize this because this is normal to them, but it's a tough industry. This is a tough market to be running a property management company. When things get tough, you've got to be tight on expenses, and it’s too easy not to get tough on expenses.

That's one thing we encourage folks, is to go through that profit of loss, line by line, and if there are expense items on there that are not directly relational to income coming in, you have to figure out how to cut them. You have to get rid of those wasteful expenses. That is such a good exercise to sit down and start going through that stuff and say, “Well, gosh, I’ve just been paying for the subscription service every month and I don't even know what it does. I signed up for it two years ago. All right, let's get that cancelled.”

Jason: Yeah, and you’re like, “Why am I still on this?”

Marc: Exactly. This is beneficial as getting on a new door, is cutting those expenses.

Jason: This is why I love having a profit-first coach, because this really is built into the system. Every month is like, “Hey, what about these services you said you're going to cancel and you said you don't need this anymore?” Yes, so I think it's helpful. If you’re not like accounting-minded, I highly recommend you go back and watch my episode with Mike Michalowicz, who is the author of Profit First and check out that episode. I think it was a fantastic episode. Really cool guy, came and spoke at our conference. It covers that system like cutting down expenses, putting profit first, making sure that expenses are fitting within your existing budget and you're still getting a profit. Yeah, makes sense.

Marc: What I had to do, I realized that the biggest expense item, the biggest overhead we had was my ego. The thing is that, that I wanted for me, the big desk, the big office, the nice car, and that's something everyone needs to start there because if you drive, especially in the real estate sale side, you go to any real estate sales event and what is the parking lot filled with? A lot of very expensed leased vehicles. I'm not against nice vehicles, but that’s just a suck on the income side of things.

Jason: I think there's always this ratio between the amount of money that you’re going to take out of the business, and the amount of money that you're going to leave in to fund towards the growth. If we take out too much too quickly, the business growth is stagnated. I've seen some really aggressive companies put almost all of their money. I’ve seen owners try not to even take a paycheck. They’re really minimizing their take out of the business so that they could fund the growth, because they're delaying gratification for the future. They’re funding and creating a business that is growing and they’re putting their funds and their money towards that.

Sometimes, you have to double down as a business owner and to be willing to take a short-term hit because you want a long-term growth goal. And we can put too much towards growth to where it feels shaky, it feels unsafe. We're not holding anything back. There's no padding there. It really is this balance of how much I’m going to put towards growth be aggressive, how safe am I going to play it, and how stable and slow am I going to be at doing this. There's a balance there.

Marc: It is a balance, it’s an absolute balance because you need to leave some in, and you need to be pulling some out every month and putting it into that savings account so that you have opportunities. We’ve purchased several companies over the years and every one of those deals worked because we were able to in essence say, “We can write a check. We’ll write a check today. We’ll get this deal done.” Why? Because we have money put away. That savings account isn't just comforting, it's an opportunity fund for things when they come up in the future.

Jason: I like it. All right, is that three?

Marc: That's three.

Jason: All right, number four.

Marc: Number four is successful companies have systems and follow them. They have systems in place and they follow. In a word, system means different things to different people. Some people think, “Well, that's just so I need a good software. What’s the system?” I really believe that probably 75%-80% of what we do on a day-to-day basis in our industry can be systematized, meaning, simply documenting your process, documenting your routine, because it plays out in so many ways.

We learned this early on when we were growing and first there were two of us. My dad and I, we both did it all and we hired a third person, and then we all three did it all. Then we hired a fourth person, and by the time we hired that fourth person, we realized that, we can't all do it all. This isn't scalable, we can't all do everything. It works great at two people, it works great at three people, but when we had that number person and Mr. Tenant calls and says, “Hey, I called in with a maintenance request last week and I haven’t heard from anybody.” And I say, “Well do you know who you talked to?” “No, I don't remember.” “Well hold on, let me see if I can figure it out.” “Hey dad, did they talk to you?” “Hey, Bill did they talk to you?” “Sue did they talk to you?” “No.” “Well they talked to one of us, right?” That’s very ineffective.

You've got to start specializing in your processes. We realized at that point in time that if we're going to hire someone to be our leasing person, for example, we better have a documented process for them to follow. I mean specific detailed documented. Here's what time you get to the property before showing. You open the door, you turn on the lights. Here's where you stand when they come in. Here's how you greet them, here’s what you say, here’s what you don't say, here's how you process an application.

If we do that into our entire business and we break the business down into the smallest components, it simplifies things like nothing else because we’re in a complex business. If you think of a continuum in your mind, a long line going on both directions. On one side of the continuum, you have the words consistency and simplicity. On the other side, the far extreme opposite, you've got the words variation and complexity.

You have to ask yourself, where am I on that continuum? We're all different places, but we hopefully will always be moving forward towards consistency and simplicity. I don't think there's a better way of doing that than through documenting your process, your system and then following it, training on it, improving it, upgrading it. It's got to be written, it's got to be documented, and it is a process.

Jason: That needs to be used. People document it, they’ll give it to the team member, the team member will look at it at the first few times they do it, and then they're done. I have Process Street on as a guest once. We used Process Street internally, but it forces them to actually use the process on going. It's a checklist that has to be verified and completed.

Marc: Yes, checklists are huge. We couldn’t exist without the checklist. Its old school, but it works. We still have paper checklists on some things in our office here that people say, “That wouldn’t work.” I guess just too old school. I say, “Well , we’re pretty successful. It worked for a thousand doors; I can tell you that. Will it work beyond that? I don't know, but it works to get you to a thousand.”

Jason: There you go. I've noticed in businesses, I think there’s, at a minimum, probably seven systems that every business eventually has to have in a business. One, they have to have an internal communication system. For me and my team, it’s virtual, so we're using things like Basecamp, Voxer, stuff like that. But there needs to be an internal communication system that isn't just, “Hey Steve, did you do this?” So, internal communication.

There needs to be process documentation system. That could just be Google Sheets, Docs, and whatever, or it could be something more complicated or cooler like Process Street or whatever, but there needs to be a process documentation system.

There needs to be a billing system, of course. Property managers use maybe AppFolio or Rentec Direct, Buildium, but there needs to be some billing, accounting system.

Then there needs to be a support system. A lot of property managers are starting to gravitate towards setting up Help Scout, Intercom, Drift, or one of these, but internally we use Intercom. There needs to be a support system in the business so that you can track tickets and track things. Sometimes, you'll do that through your property management software a bit.

I find one system most property management businesses are lacking or missing is a planning system. You're hearing people move towards traction in some of this which I think has some fundamental flaws to be blunt, but it's a great system. It’s better than no system and there's a lot of systems out there for planning, but there needs to be a planning system in the business.

Another system that's necessary is a sales CRM. This is different than your existing customer database. This is for prospects. There needs to be a sales CRM in place. A lot of property managers use LeadSimple, for example.

If there were one other system you can throw in there probably be a phone system. We need some way to manage this big influx of calls or outbound calls with team members being able to be reached. These are some of the systems that I've paid attention to, that businesses need. Most businesses will have maybe two or three.

Marc: Yup, and we preach what we practice as well as preach to make on the systems for individual team members to make them position-specific. We have 20-some odd people our office and every role has a position-specific system manual, so our director of accounting has a director of accounting system manual. I'm the president of the organization. I have a president system manual. Why? Because I need to be replaceable. That's one of the benefits of it. That idea that now we become less dependent upon individuals and no individual can hold us hostage to be like, “They’ve got everything in their head. What are we going to do they leave? We can't lose them.” It's a terrible place to be. We don’t have to worry about that. You're going to lose everybody at some point in time. You’ll either lose them for a good reason or a bad reason, but they need to be replaceable. Now if you have a document, if you have documented their process, then they become replaceable.

I'm replaceable. If I get hit by the truck today, it’s alright. Hopefully, the company will take a little hit, hopefully they’ll need me a little bit, but we got a system manual, somebody can step in that role, and already says, “Hey, this is what Marc does.” Just do it and you'll be successful.

Jason: I like it. All right, so are we on to five?

Marc: Number five, the last one, successful companies recruit and develop talent. We just talked about systems and the concept that systems can make your people replaceable to some extent and they should. However, at the end of the day, the team with the best players usually wins. If you can go out there and if you can figure out how to recruit the best talent and then retain them, that is going to do more for your company than almost anything else out there. If I'm going to brag about something about our company, I’ll brag about that.

We get the best people around. We've gotten good at that. It makes it so much easier to do business. I don't work harder than my competitors, I'm not smarter than my competitors, I'm not technologically savvy more than my competitors, but what we do better than a lot of our competitors is we get really good people

Now that’s hard, and it’s hard to get really good people and that's why you got to recruit. It doesn't mean you put an ad on Craig's list and read a bunch of resumes of people that can't get jobs. I mean you go out and you find people that are really good at what they do and you got to get them, you have to recruit them. That's hard because successful people aren’t looking for jobs. They are already successful. If you want to be successful, you got to go out there.

I’ll tell a story and I'll give that the short version. We had to hire a leasing person not too long ago. Wwe were hiring, meaning we were just reviewing resumes and I thought this is ridiculous. We can't find anybody good. I better do what I tell myself what I should be doing. I got my car one day and I drove around to a lot of the multi-family class A properties in Denver, and I walked in as a prospect. “Hey, I’m Marc, I’m here. I just want to see what you have available. I’m looking for a buddy of mine to rent a property.” And I was usually met with the, “Okay, well here's a piece of paper. Tell your buddy to give us a call.” I say, “Okay” and left.

About the fourth place I came to, I came in and met a gal there behind the front and I said, “Hi, I’m Marc. I’m just looking for a place for a buddy of mine.” She said, “Well, me about your buddy. He’s looking for one bedroom. He’s tall dark and handsome, got a cat, probably crazy,” and she's like, “You know what? I know the perfect unit for your buddy. Do you have a couple minutes? I'd love to just have you tour this property.” “Yeah, sure. Okay.”

She tours me through and she's pointing out the feature benefits to offer. She was sharp. Her name is Lindsay. I said, “Lindsay, you are really good at your job. She goes, “I love leasing. I just love it. I love helping people. I love real estate. I love what I do.”

I said, “That's great. Coincidently, I happen to run a property management company and we're actually looking to hire a director of leasing for residential real estate. Have you thought about doing residential?” because she’s a multifamily. She was like, “Oh no. I could never leave. I'm not a job hopper. I'm really stable. Stability is a big deal for me once I get somewhere I like to stay.”

Now I'm drooling. I got to have her. I said, “Well is there anything you don't like about your job Lindsay? Well we work weekends.” I said, “Oh. That’s too bad. We don’t work weekends.” I said, “Tell you what. Why don't you come into my office sometime? Here’s my card. I'd love to just sit down and have a conversation with you. Who knows? Maybe something comes out of it, maybe something don’t, but I’d love to just connect and see if there's something there for the future.”

Well long story short, we got her. We got Lindsay. And we had to go after her, we had to get her because she didn't want to leave. She's been a rock star. She's been amazing. The things that she's helped our company to do, but we would not have found her if we were just hiring. We had to go recruit her, we had to go get her. That's what you have to do in every position in your company. You have to go find stuff.

I'm not saying go steal people away from your competitors, but you have to find those people out there that are successful and get them. Once you get them, you have to retain them. You have to train them well, you got to pay them well, which is one of the reasons you need to have good profit because good people aren’t cheap, but that's what's going to lead to a long-term success, and unless you take a step back out of the day-to-day stuff at the end of the day.

Jason: Yeah. I think it's important to point out what you're saying is not that people are easily replaceable, that you can pop somebody else in. You're not saying that at all, and I think every business owner knows that if you have a seasoned team member that you've invested in, that you've trained, that you've developed, there's nothing as good as that, like having somebody that's been with you for years. I have team members that has been on my team for maybe six years and he's a rock star.

I have a competitive advantage over most companies in that our teams are virtual, so I can source the best talent from anywhere pretty much in the world. But yeah, this can be challenging for property managers that are looking for somebody locally, they're looking for somebody nearby, they’re looking for a particular set of skills may be. But ultimately, if you find somebody good, you want to make sure you retain them and that you keep them happy. You can compare it to a wine, you can compare it to anything, but over time they just get better. If they’re good they get better, if they're not good, they get worse.

Marc: That's the other side of the coin. That's where just like we talked about earlier with owners. This is what we started this whole conversation with you get a bad owner, what do you do? You need to let them go. Well if you made a hiring mistake, you need to fix that and correct that as well and let that person go, because we're going to make hirings. We are very good at this, but we make a lot of hiring mistakes. We just do, it drives me crazy. But when we do that, we correct it quickly. We're going to move that person on very quickly when we make that mistake. Why? Because the longer they're sitting there, the longer the right person isn't there. You've got to make that correction when you made a hiring mistake.

Jason: I think it's amazing when you bring in a new team member, it changes the entire team. It either changes the entire team for the better or for the worse, especially if that team member that you just brought on is taking off of your plate everything. It changes your role as CEO. It changes your role as an entrepreneur, and it affects everything from you. It's pretty significant and it's important to make sure that they’re the right fit. We we're all going to make hiring mistakes. You have to kiss a few frogs and you have to suck a little bit at hiring in order to find the good people.

Marc: It's an art, and a skill set to hire someone in no way translates over to property management. It's not like, “I'm a good property manager. I’ll obviously be good at hiring.” No, there's no correlation there. It's completely different. The other unfortunate thing is, the smaller your company is, the more important it is to make that first good hire. Now we've got 20 people. If we make a bad hire, we got one in 20 then who's bad. They can fly under the radar a little bit, they're not going to stick to the company.

If we've got two people and then we make a bad hire for number three, so we never got 33% of our workforce that's a low performer. The smaller you are, the more important it is that you take the time to get the right person in. A lot of it is just time. You've got to slow down the hiring process. These ideas of we had a phone conversation and we interviewed him, it's not enough? Are you kidding me? No, you want to do multiple interviews. Anybody can come across as a positive person on that first interview. You want to have multiple interviews with multiple people. You have to dig, dig, dig on that before you make that job offer.

Jason: I think where I've made a lot of mistakes personally in the hiring process is I love to delegate and its delegating too quickly. Some people will micromanage, they’ll control too much, and I think some people will do the opposite. They'll bring somebody on and they won't give them all the training, all the tools, all the support they need to really be the rock star they could have been.

I've made both of those mistakes to be transparent. I think onboarding is a really important process to make sure you’re meeting with your new hires on a regular basis daily initially, then backing it up to weekly and so on, so that every day like where are you stuck? What do you need? What are you confused about? Often, they're not going to just volunteer all that information to you. But when you're meeting with them daily, they're going to feel supported, they're going to feel like they're invested in the team. I think onboarding is a really big deal. That's where I made mistakes.

Marc: We still do one-on-one meetings every single week with every one of our team members. It doesn't matter how long they've been. I'm a huge believer in that, I guess if you wanted number six, there is number six, right? Have one-on-ones every single week, sitting down with them, even if it’s for 5 or 10 minutes, touch base, see what issues are going. Those have been critical for our people in their success.

Jason: We have a bonus, number six.

Marc: You got a bonus, number six, because you’re so good. What did I leave out? I’m curious. You talk to a lot of PM companies. What do you think are characteristics of success may be that we didn’t hit on?

Jason: I wasn’t even thinking this, I was so into yours. I think all these things are really fantastic. I think if I were to add a seventh here that I think is absolutely critical, so imagine you have an orchard, you’re at the top, and this is like a reservoir of hopefully money and or water or whatever you want to call it. There's outflow, you're paying your team, you're spending money, things like this, and investing your team.

I think where most companies are flawed is there's no inflow at the top of the orchard. There's nothing above the entrepreneur feeding into them. I think this is why it's critical. I probably spent at least six figures annually just on coaches and mentors. I have three coaches right now affecting different areas of my business. I think it's that inflow that I'm able to get that allows me to consistently have value to offer to the marketplace and to benefit my clients.

It comes out in ways that I don't even expect, like a client will ask me a question or be stuck on something mindset-wise or be challenged with something, and I'm like, “I had that issue and I worked that through with my coach,” or, “I have done that in that training that I had done,” or whatever it might be. I think as entrepreneurs, we need to invest in ourselves if we're expecting other people to invest in us. When you go to prospects or clients and you say, “Hey, invest in me, spend money with my company,” and you aren't willing to invest in yourself or in your company in a similar fashion, I think there's a little lack of integrity. Energetically, something's off.

If there were a seventh, I would say that's a big one is make sure that you're investing consistently in your own development, not just your team so that you have something to give. I think that's the inflow. You don't want to be a dead sea, there needs to be in flow and there needs to be outflow and that's where there's life. That's where it’s a healthy business.

Marc: For the person that would say, “Hey, that sounds great, but I'm working 70 hours a week. I don't have time to invest in me. I'm just give, give, give.” What would you say to them?

Jason: I would say they’re ineffective, they’re inefficient because if we're doing, doing, doing we moved out of the mode of being affected. That means most of our time is tactical instead of strategic. Any business that lacks, the business owner lacks strategic time, the business isn’t growing. There's a direct relationship between the amount of strategic time, planning, looking towards the future, coming up with ideas, or getting trained or learning new things, versus their growth. If all their time is tactical, they're dealing with maintenance, fires, leases, managing their team, emails, phone calls, if all their time is tactical, their business can’t grow.

It will stay basically where it is. I think what I do with clients is I start them with a time study and we create time. Everybody is spending time doing stuff that's unnecessary, or low dollar an hour work, or silly, and it's pretty simple to start getting clarity on that first and then that helps them see what they need next. My entire foundation, my company really has been built on time studies.

That's where I think fundamentally there's a huge difference between how I would coach operationally a business to run versus something like traction or a rocket fuel or these other systems where they’re saying, “Here's the magic org chart and here's the roles that you have to have.” Ultimately, a business should be built around the entrepreneur and what they actually need. The only way to really see that is to know where your time is going.

Marc: Good stuff.

Jason: That's my two cents.

Marc: I like it.

Jason: All right, so that's number eight maybe. I don't know.

Marc: It’s number eight.

Jason: We’d better stop before we add anymore.

Marc: We’d better. I know. You’re making me think of too many things.

Jason: Marc, it was really awesome hanging out here with you. This is really fun. You're welcome back anytime. Before we go, how can people get in touch with you if they're curious about some stuff that you offer for property managers or they want to learn more about your business or whatever?

Marc: The best way to reach me is through our website which is propertymanagementsystem.org and we got a handful things on there, a lot of video resource things. We've got our system manuals, we talked a little bit about that, our actual system manuals, we offer those. You can download samples of those and we got packages on those.

We do ancillary business training, some coaching stuff from that aspect. One thing I'm pretty excited about, we're just putting in place, we actually just put in place and I'm happy to share with any of your folks if they're interested, they can drop me an email. We put a business health checkup form where you answer some questions and it spits out a number to let you do that business health checkup. If anybody is interested in that, drop me an email, go on the website, reach out to me from there, will be happy to send it to them.

Jason: Cool. All right, Marc, thanks so much for coming on the DoorGrow Show and excited to see what you do in the future.

Marc: Jason, thank you, it was fun.

Jason: All right ,so if you are property management entrepreneur and you are struggling, you are feeling challenged in growth, be sure to connect with us over Door Grow. I would be honored to help you out. As I said during this call, I'm a firm believer in getting coached, getting coaches, and even if it's not me, somebody like Marc, there's lots of other [...] there that can coach you. Get somebody that can give you some value, help you grow your business, help you achieve your goals, and figure things out. Until next time, everybody, to our mutual growth. Bye everyone.

Download this Episode

Sep 3, 2019

Do you want to build wealth through real estate investing and property management? Then, put in the work, trust the process, be open-minded, and get results that change your life.

Today, I am talking to Robin Reed, CEO of Concept 360 Property Management and a licensed California real estate broker. She helps clients reposition assets to maximize their value by decreasing expenses and increasing income.

You’ll Learn...

[04:29] Challenging Coworkers: Let them go, and try not to grow the company.

[05:07] Learn to appreciate employees who handle day-to-day tasks and tenants.

[05:45] Feast or Famine: Flip from brokerage income to property management.

[07:27] Completely Commit to Changes: Follow DoorGrow, and do whatever it takes.

[12:00] Then vs. Now: No Jerks Allowed policy to make everyone happy.

[17:05] Desperation and Disrespect: You get it, or you don’t.

[17:25] Value of Property Management: If working for peanuts...get what you pay for.

[18:20] Walk Away: Not everything, everyone is a perfect market/product fit.

[22:00] Feeding Funnel: What do you do? What’s property management?

[25:50] Retention: What works? Sells? Results and relationships with real estate agents.

[26:05] Growing from 65 to 200 doors; adding 2-5 doors/properties each month.

[30:15] Second Sandtrap: New challenges ahead for processes, teams, trust, and more.

Tweetables

I like working on the business, and not in the business.

Feast or Famine: Rollercoaster of brokerage income.

Be willing to change, take action, and make a difference.

What sells, what people want to buy are results.

Resources

Concept 360 Property Management

National Association of Residential Property Managers (NARPM)

LeadSimple

GatherKudos

DoorGrow Case Studies and Website Secrets

DGS 93: How I Almost Quit Then Found Joy in Property Management with Annemarie Sunde of Legacy Property Management LLC 0

Transcript

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

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

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change 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 the show.

Today's guest is Robin Reed of Concept 360 Property Management. Robin, welcome to the show.

Robin: Thank you, Jason.

Jason: It's really good to see you.

Robin: You too.

Jason: Robin has been a client. For long have you been a client?

Robin: Coming up to two years. I think we’re right around two years.

Jason: Maybe I should read a little bit of your bio because you’re really cool. It says, Robin Reed is a licensed California real estate broker and CEO of Concept 360 Property Management with a background in commercial real estate, finance, investment, and development. She's experienced in all real estate asset classes having secured over million in both debt and equity for her clients. She opened Concept 360 Property Management to share her true passion and combined experience as a broker and investor with her clients by helping them reposition their assets. They maximize their value by decreasing expenses and increasing income.

A passionate real estate investor herself. She enjoys helping her clients build wealth through real estate investing. Robin is actively involved in several real estate trade organizations including NARPM, the National Association of Residential Property Managers, and is always aware of the pulls of the current real estate market. An Orange County native, she holds a BA degree in English and Comparative Literature from Chapman University.

Robin, I actually saw you in person in Long Beach when I spoke at the NARPM chapter. It was awesome because you and your husband came up to me and gave me a big hug. I remember after that event you said some kind words to me. After that event, I was kind of high of the event, but afterwards in the parking lot, I started crying. Because as a coach and as a mentor to a lot of property management companies, I don't get to see clients in person very often because a lot are digital or remote. But occasionally, at a conference or something and somebody comes up to me and they say something in gratitude, that means a lot to me.

Robin: Right.

Jason: That was one of the moments I cherish. It was really nice being able to help you guys out. Why don't we start back at the beginning? Maybe a couple of years ago when you came to myself and to DoorGrow. What challenges were you dealing with then? What has been happening?

Robin: We had let an employee go. The company was something that at the beginning when it first started in 2004, it was pretty big and had a lot of multi-family and things like that. Then the recession hit, a lot of people sold their buildings, some lost them, things like that. We weren't really focused on the property management company. It was just sort of this thing over in the other office that was self-sustaining and it was really something we weren't paying attention to and we were really focused on brokerage. We did a lot of brokerages, sold a lot of REOs for banks and we were really involved in that.

I guess it was three years ago, that was right, it was about three years ago and we let an employee go and we looked and realized we were down from probably at the hay day close to 1800 doors, we are down to 65 doors. I said, "I don't even think we should keep this open. What's the point? It's a liability. I'm not into it. Let's just close it." So, we didn't, we kept it as a self-sustaining thing, but we didn't try to grow it. Then my remaining employee went to a maternity leave and I was doing her job for a couple of months which I learned that I hated doing her job. I'm glad I have employees. I like working on the business and not in the business.

Luckily, we were at the point where we were able to have employees and I don't really have to deal with day to day of tenants and all that. I did her job for a couple of months and during that period I thought to myself, "This is a good business. This is a good business to be in. This is viable." I was so used to the rollercoaster of brokerage income, it's feast or famine.

Jason: Yeah.

Robin: And the property management company had always been in the background if between commissions or something like that. I thought, "why don't I flip it? Why don't I flip the script and focus on the property management company and then put the brokerage on the side?" My husband saw you speak somewhere on the internet, came across you and your videos and said, "You got to check this out." Historically, there's been a lot of "check this out", "we got to try this system" so I'm skeptic with systems and coaches, I always have been. I saw one video of yours and I said, "Yes, I'm in."

Jason: That’s it. You have been super skeptic and one video was all you needed.

Robin: One video and I said, "I'm in. Let's check him out."

Jason: What did I do in that video?

Robin: I don't know. I wish I knew which one it was.

Jason: It's good. I got to do more of that video.

Robin: That one, yeah.

Jason: Yeah.

Robin: We joined up with you and we were willing because we wanted the property management to grow. It’s like, I have this company already and we already have clients, it's something that I can grow from. I was committed and I said, "Whatever needs to happen." We went through all of the training. If I needed to change the name, we ended up changing the logo for you guys. I would have changed the name. I would have done anything. I said, "I'm completely committed to this system. I'm willing to do whatever it takes. Let's go."

We did the website. I think before we even did the website or maybe in conjunction, I don't know how it works, but we did GatherKudos and that was huge.

Jason: Yeah, [...] on the reviews.

Robin: Yes, that was huge. That's been a huge help for us still. We have people that say, "Oh my god. I just saw your reviews." We started asking tenants and owners to review us. Sometimes you have to ask several times for people to review you. Dana, who works for me in the office, she's always trying. She's very good at getting people to review us. She's like a dog on a bone that she said, "You said you we're going to review us. Review us. Review us." So that's good.

Jason: Yeah, good. You started going through a process.

Robin: Yeah.

Jason: The one thing I really loved about you guys as clients is I made mistakes in the past in attracting clients that are really opinionated because I was being very opinionated to the marketplace.

Robin: Okay.

Jason: But somehow you guys came through and were amazing clients. You guys were the type of clients that I really wanted because you were open to doing things differently. You were open to trying stuff. That's the type of person that I am. I'm very much like an open-minded person and so I'm getting better at putting out more of an open-minded message to attract those types of clients because we attract really well what we put out there.

You guys came to me and you were willing to put in the work and you guys trusted the process. Those are the clients that get the biggest results and that's always really exciting to see a client get results, doing what you say that you asked them to do, I feel like when my clients come on, they are putting a lot of faith in us.

Robin: Right.

Jason: Whether you are a business owner or coaching client of mine and if they put that faith in you, that's a secret thing, I think, in business. I think that's why when your husband came to me—I don't even remember what he said off the top of my head—but he said something like, "You changed my life," or something like that.

Robin: I think it was something like that because it's true.

Jason: Yeah. I think as entrepreneurs—or at least the type of entrepreneurs I really like to work with—that's really the core of who we are. We want to make a difference. Some entrepreneurs, maybe you can call them entrepreneurs, they have business in which all they want to make money.

Robin: Right.

Jason: They are not really concerned about solving the problem, but real business exists to solve the problem. Property managers solve the real problem.

Robin: Right.

Jason: I think a lot of them are very much enjoy people who are contribution-focused. That really was great to watch you guys go through and trust that. You guys asked a lot of questions.

Robin: Yeah.

Jason: A lot of questions, good questions, then you guys took action. You guys did stuff. You did the things that I told you to do.

Robin: Yeah.

Jason: You did a lot of different things. You’ve gone from saying, "It's a liability. Let's just close it down," to saying, "Hey, maybe there's something here." To getting coaching, to going through a process, cleaning up your reputation, working on your website, working on your pricing model, working on your sales process, working on your prospecting methods. You've really gone through all of that and then we started getting on the operational things, figuring out your team a little bit, figuring how to get you in alignment with your business that wasn't so uncomfortable.

Robin: Right.

Jason: Because it was, it was uncomfortable for you at some times.

Robin: Yes. It was.

Jason: I think we've all been there. I remember some calls of you where you were like, "How do I get this one team member to do things the way that I want them to do?"

Robin: Right.

Jason: "I want things to be this way." Your perspective shifted really quickly after that.

Robin: Oh, I did. Yeah. I've learned a lot.

Jason: How do you feel like your business is now? How does it feel different now having gone through all that?

Robin: We have no jerk's policy. You were talking about the kind of clients that you want to attract and it's the same. Life's too short. We've had some clients that are just not great and we let them go. That takes some faith in the system because it'd be easy for me to say, "I have a staff. They can deal with this person. I don't have to deal with him. I'm just going to keep them because of the income." But that's not really the culture that I want. I don't want unhappy employees to hate me because I keep bad clients on.

We've attracted so many just really cool, nice people who get it. There's people that just don't. They don't get it. They don't see the value of property management. They maybe have self-managing for a long time and they don't see the value, but there are other people that do, and those are the people we want to work with. We've really streamlined our criteria about the kind of clientele we want, the kind of properties that we want to manage.

We manage several HOAs. We don't manage them anymore. They had their separate challenges that weren't really working for our business model and so we let all of them go. That's income, but it's been replaced. It’s come back around. You were talking about relationships. You said to us, "Your property management company will be a place where you get referrals for your brokerage." I've got one in escrow right now that we’ve managed for a couple of years. Another one that we managed that were evicting a tenant and putting on the market. It is true that the property management company has been an interesting gateway to the brokerage business which has sort of become my side hustle, if you will, not my main thing.

Jason: Yeah. It's a good side hustle.

Robin: Yeah.

Jason: One of the things that I point out to clients, and for those listening, I think it's very easy for us as business owners to fall into having the business that we can create or that we can have. Having the types of businesses that we can serve instead of having the business that we really want and the clients that we really want.

Robin: Right.

Jason: It's such a slight distinction and such an easy trap to fall into. It's similar to what I said outside of this is that, ultimately, I think what happens to clients is that we help them understand not just who they want to really work with, but who they don't want to work with. Then when they get that clarity and we then engineer the sales process and the reputation process, your pricing, and everything around who you really want then the message creates and attracts the right type of clients or tells the wrong type of clients, and so you are now attracting the right type of clients.

I think a lot of property managers are hearing you and they just don't believe it. They’re hearing you say, "Our clients are great. We love them. They are easy. "And they’re like, "She's smoking something." They don’t get it because they’re feeling, "I know. I talk to people every day." And they’re like, "I hate this business sometimes. It's crazy. I'm struggling. We are dealing with people who are like we have to replace one door every time we get a door on." Really, it’s that they’re putting out the wrong type of energy, message, or perception or they’re focusing on the wrong type of audience and they don't see that it's possible. This sounds like a pipe dream to them. How would you explain that to somebody that's sitting where you were two or three years ago?

Robin: It does sound like a pipe dream, doesn't it? It does sound a little bit scary to start trusting the process and that you will get new doors on if you let go of some. I'm a firm believer of that kind of energy anyway. You let go of some things and they are going to be replaced by something better anyway. I'm a firm believer in that kind of energy, but you might not be able to let go. Let's say you start doing the process and you start to GatherKudos and you start getting more clients. Then you'll be able to slowly maybe let go of the worst ones to replace it with better ones.

You've got to trust the process. That's the thing and it's an empty card. I think a lot of times in this business, I've seen it in brokerage, and I'm sure it happens in every business, people get desperate and they accept treatment from clients they don't really want to accept, but they get desperate. We've had people call us and other people will do it for less. [...]. I mean, go ahead. I saw somebody on one of the DoorGrow threads say, "If you want peanuts, you're going to get monkeys or something." It was essentially like.

Jason: If you’re working for peanuts, yeah.

Robin: Right because that's what you pay for.

Jason: [...] monkey if you’re working for peanuts.

Robin: Right. There's a lot of people that would do it for less, go ahead. If that's your main thing, is somebody who would, "What the price is?” I mean, I was telling my husband, I said, "I've never gone in the hair salon and said, okay, how much?" It's more of what can you do and then how much. Don't you want to know what the product is?

I have these people call me the other day and they had a litany of questions. I was being peppered with questions. I finally said, "It sounds like you guys have a lot of questions, maybe we can set up a meeting." They were just hammering me on pricing and I said, "Maybe we’re not a fit." It's okay to walk away, you are not going to fit with everyone.

Jason: Probably the people that ask endless litany of questions, they're usually really looking for an excuse not to work with you...

Robin: Right.

Jason: ...especially if they know that your pricing is higher. They're looking, "There's got to be a reason I want to work with these guys, give me an excuse. Oh, you guys don't do that one little thing? Hahaha. I have my excuse. Now, I can avoid this leap that I was going to take working with a coach, working with this business, or whatever. I can avoid that and I can stay in my mediocrity. I can stay in my stuff. I can stay in my dysfunction."

I mean, there might be people that call you up asking about your business and they really just want to self-manage. They're just looking for an excuse why is it too expensive or too bad of an idea, or why can't I not trust them so that I can hold onto this moldy peanuts and [...] a monkey and keep my hand in the monkey trap. They want to hold on to it. They don't want to let go and they are looking at you to give them a reason. I love when people play tug of war game with me.

Robin: Right.

Jason: My favorite thing in the tug of war game is to let go of the rope.

Robin: Right, exactly.

Jason: And watch them fall on their ass and then they are sitting there holding on going, "Why won’t you play with me? Why won’t you fight me on this?" "I don’t need to, I don’t need to play that game." Let’s get into the changes that you’ve made. Your business from where it is now in almost every way is different.

Robin: Right.

Jason: What changes did we go through? Did you mess with your branding?

Robin: The logo.

Jason: Okay. We did change something to do with branding. Then we go into the reputation stuff you mentioned. And you guys also have process now reaching out to people, and stuff like that. Or it’s gotten [...] for you?

Robin: We used LeadSimple. I tried so many different things just to make our systems better as you bring on more doors, you have a quality problem of how do you manage everything. The system of bringing them on board and all of that. I’ve actually just been working, finessing our onboarding process. Our BDM wouldn’t get all of the necessary information. The BDM just wants the signature on the contract.

Jason: Right. "Let’s get the deal, let’s close it."

Robin: I realized, "You go get that signature, I’ll get the rest of the stuff." I’ll send them a welcome email with all the things that we need, and that has really worked out well for us.

Jason: You’ve also revamped your pricing, right? You went through significant change there. You revamped your sales process, which you’re talking about right now.

Robin: Right.

Jason: Making significant changes there in optimizing that. How about the methods for feeding this funnel and prospecting methods?

Robin: I’ll talk about a couple of things that have worked for us, and then something that haven’t worked for us because I’ve tried everything. Something that’s very, very simple is that when you have a business, whatever it is, you need people to know what you do. Especially in property management, my local area, there are people that sell products that can sell to a nationwide audience, that’s not what I do. I am managing properties in my local area. I think focusing on that type of local people that are local professionals that know what I do, and that can refer business to me.

We do a lot of speaking engagements. We have Dan [...] presentation and then we have one that we’re doing right now that we’ve done a couple of times that is some before and afters because we do a lot with clients that have maybe inherited a property or bought something at a discount that needs to completely be rehabbed. We’ve worked through a lot of those. We’ve some before and afters and we talk about the clients getting more money in their pocket every month now because of turning the units. We got a client that inherited a property that his mother had owned and she had kept the rents the same for years. One bedroom was getting a month. It’s now getting .

Jason: Wow.

Robin: How can you argue with that?

Jason: That’s what sells. What really sells, what people want to buy are results.

Robin: Exactly. That’s why that presentation has been so successful, it’s black and white, it’s the numbers, it’s the before and after pictures, it’s the before and after rent rolls. It shows clients, when we manage their properties, and we have a lot of guys that work for us that can do the turns. We do a lot of it. We can discuss a lot of business. We have a lot of vendors that give us great deals. It’s been really beneficial for our clients. Doing this speaking engagement gets us out there and has people see what we do. That’s been very beneficial.

I go to events, I’m really the only property management company there. There’s no other property management company that show up to these events that I go to. In general networking event, I don’t really seem to get much out of those. In our area, we have the realtor referral program on our website, we don’t get anything. I don’t know if it’s because the realtors in our area, they’re doing one-offs, kind of they’ve got one deal and that’s it, you never hear from them again or in LA County you make so make so much money on one deal that our little referral, they don’t care, they’re not interested.

Jason: Not as enticing. Ultimately, having a relationship with real estate agents is what works...

Robin: Right.

Jason: ...and nurturing relationship long term. That’s really what works there. You mentioned before and after and how effective that is. Let’s paint a picture of your before and after for your business that helps me out. Let’s look at this. Before, when you came to me, you were 50, 60 units?

Robin: I want to say it was 65 doors, 64 doors, right there.

Jason: Okay. And then where you guys at now?

Robin: Right around 200.

Jason: Oh my gosh. So, 200 doors. How many doors were you adding when you were at the 65? What was the sort of the challenge then? What was the typical growth rate?

Robin: Nothing. The growth rate was a negative. We were losing. We weren’t doing anything. The company was just in the other room on its own and we weren’t doing anything to try to grow it.

Jason: No growth. That’s 65 doors and now, if you guys were at about 200 doors under management, what sort of the growth rate still like? How many doors you add in typically in a month on average?

Robin: Typically, a month, 2-5.

Jason: Okay. Steadily. If that’s the case then you must be retaining doors a lot longer.

Robin: We always have. Our retention rate is really a lot longer I think than the stats I’ve heard in the industry. We’ve done well with that.

Jason: Which [...] targeting better owners, or owners that are not just accidentals that are going to fold after a year.

Robin: Right. I find the single family is what we like to target and the small multi-family. We do manage some properties, that’s why 2-5 a month, sometimes that’s not necessarily doors that’s properties, some of those properties might have 4 units.

Jason: Oh, okay.

Robin: We’ve taken on some larger multi-family. We actually started in multi-family.

Jason: [...] a year typically on average adding a month maybe is what, maybe about 10?

Robin: It may be. Depending. Sometimes it’s just five single family. It just depends on the month. A lot of times though because we’re doing so much prospecting, we have so many in the pipe that somebody I’ve been talking to for four months comes on, that kind of thing. That works well.

Jason: That [...] nurture process.

Robin: I just found that people that have the 25-unit buildings and things like that, they want you to run your business the way they want you to run it. I had a guy come and talk to us. We do all of our statements, there’s an owner portal, we email them, we don’t do a paper statement, and he wanted a bound paper statement every month, so his wife could read it. I said, "Too bad, we don’t do that."

Jason: Could you imagine if you had 20 of those to do a month?

Robin: Exactly.

Jason: 50 of those to do a month?

Robin: They seem to want special treatment so you really have to set your boundaries and know what you’re willing to accept. There’s always negotiation. It’s business. There’s always a bending. You might think, "Well, this is so worth it. You know what, I will lower my price on this or that, or I will do something out of the ordinary." But for the most part, you really have to stick to your guns and know what you’re willing to accept. That works for us.

Jason: Works for me too. I love hearing about you and your husband’s successes. It’s really great to see you. I appreciate you coming on the show and hanging out with me. It’s great to hear that you guys are 200 doors and having growth. You guys are headed into what I call the second [...]. That’s the 200-400 doors and this is where now you’re dealing with processes and staff, and building a team. You’ve got some new challenges ahead. Maybe we’ll be talking soon.

Robin: Okay, good.

Jason: [...] challenges. It’s really great to see your success. Shameless plug, for those that are considering maybe working with me, doing the seed program, maybe they’re skeptical, or they’ve heard mixed reviews. What would you say to them about me, what’s your perception of me and DoorGrow?

Robin: I can’t say enough positive things about you and DoorGrow. It has truly changed our business. If you have a property management company, if you’re starting a property management company, especially if you’re starting one, there’s not so much clean up that you’ll have to do. Do it right from the beginning. Jason is very genuine. He’s a good human being. That’s important. We trust you, we really care about you and you care about us, and we’ve had a two-year relationship with you and we know you’re there for us. We’ve seen the results. Not only that, for me, it was hard for me to trust the results, and trust that they were going to keep coming, and they have. You don’t just get a new DoorGrow website and have a seat and have everything come to you. That’s not how it works, but it’s all of these different pieces that starts to funnel business your way.

Jason: I tell potential clients or even clients, it’s the last 10% of dialling in things that give you 90% of the results.

Robin: That makes sense.

Jason: It’s that last 10%. For example, they’ll do the website, but they don’t get faces on there, they don’t get the social proof. They’re missing just a couple little pieces. I have the whole website, that’s 90%. But they’re missing the little pieces that create that trust or ticket to the next level. How I built my business, and how I built the entire program is built around the idea of trusts. Trust is what sells and the fact that you came on board and trusted me, allowed me to help you create a business that creates trust. It sounds like you’re putting out a lot of trust for the industry and property management industry in your market which I think is awesome as well. You’re changing the perception of property management. There’s a lack of trust.

For those that are listening, pay attention to this, people that are not signing up with you that you feel like should be, it’s not because they distrust you, it’s because you haven’t created enough trust for them to pick you over your competition. You just haven’t created enough trust. It’s not that they’re walking around just distrusting everybody. Maybe they are, maybe the property management industry has earned a bad reputation in some ways. But I think more than that, it’s that you haven’t created enough trust. It’s about creating that trust.

Anyway, I honor you for your growth. You did all of these. You did it. I just pointed, and you and your husband deserves all the props for making this happen.

Robin: Thank you.

Jason: Really, you guys have done some phenomenal things. Like you said earlier, “I tried everything.” You have the tenacity. And I gave you ideas, but you tried things, you tried everything out. You did, you trusted the process but you experimented and that’s really what entrepreneurs do. That’s how business works.

Robin: Yeah. We’re still tweaking. You mentioned the website.

Jason: Always.

Robin: I just took the website quiz again last week. I got a B. There’s a couple of things we need to tweak.

Jason: I have a new training called Website Secrets that you got to watch.

Robin: Right.

Jason: And we’re getting to an A.

Robin: Yeah, exactly! I know exactly what we need to do and it’s just getting with your team and making those tweaks.

Jason: Make sure you watch the training because some of my questions in DoorGrow secrets or in the DoorGrow score quiz.

Robin: I will.

Jason: If anyone wants to grade their website, you can go to doorgrow.com/quiz and take a test to grade your website, how effective it is to creating trust and getting conversions, but some of the questions are backwards. You think you’re saying, “Yes, I’m going to get this, and I need to add this for my website.” It’s a trick, it’s like the reverse. I didn’t really explain which ones are right and which ones are wrong, I’m just asking do you have this and then it gives you a grade in the end.

You’re on the inside. I’ve seen people go and implement a bunch of changes, thinking they could just go off the quiz and then it’s just [...] they can clear things up. Cool. Robin, really great to see you again. I’m excited to hear about your continuing success and what [...] big and brighter future with Concept 360 Property Management.

Robin: Thank you. Thank you so much.

Jason: Alright. I’ll let Robin go. Really great to connect with her. Always exciting to see and share in the winds with clients. Man, I would love to take all the credit, but my best clients, all the ones that are in my case studies that you guys can see back onto the doorgrow.com/case-studies, these are clients that they trusted the process, but they did the work. They did the work.

This is a secret, there’s no company that you can just go hand them money and they’re going to give you contracts. We don’t do that. Marketing agencies can’t do that. The best they can give you, most agencies with cold leads, we’re going to help you build system so that your business grows more organically, that it’s easier that we put gasoline on the fire that works in the sense you which is word of mouth and we optimize your business towards that.

If you are struggling to grow, if you are maybe what Robin was in the beginning saying, "It’s a liability, let’s just close it. I’m burnt out, I’m stressed out. I’m not getting any younger." I’ve heard these phrases from clients. Get on the phone with DoorGrow or start with our case studies, go to doorgrow.com/case-studies and just start there. If you go there, there is a free training—it really is the beginning of our program, I give it out for free. There is a link you can click on to watch free training about DoorGrow Secrets. It’s going to share with you concepts like the cycle of suck, the 4Ds to revenue, cold leads versus warm leads, the myth of SEO, so that you can be a more savvy educated person with marketing and growing your business.

If you decide that we can help you out, I would love to do that. If you feel like you are a right fit, you are open-minded, you’re the right type of client, I would love and be honored to be able to work with you and coach you and help you grow your company. Again, thanks Robin for coming on the show. Until next time, everybody to our mutual growth. Bye everyone.

Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. 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 at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow hacking your business and your life.

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Aug 27, 2019

Toilets, tenants, and termites: Property management can be a tough business. Have you ever felt like giving up, only to find joy again?

Today, I am talking to Annemarie Sunde of Legacy Property Management. She paints a realistic and transparent turned pretty picture of property management.

You’ll Learn...

[03:00] Discovering Development Areas: Annemarie never wanted to be a realtor, but now has a real estate license.

[04:04] Dealing with the Scum of the Earth? Given an opportunity to get into property management, only to learn most property managers and tenants lack integrity.

[04:50] Origins of Legacy Property Management: Treating others with respect that leads to legacy with tenants, owners, and co-workers.

[06:10] DoorGrow’s Time Study: Doing things that cause you stress and headaches. [06:30] Strategic and Futuristic Strengths: Started having fun thinking 20 years ahead about being on a beach and the business naturally growing.

[06:55] Cycle of Suck: Vicious circle of not-great properties, tenants, and owners.

[08:40] Business Model and Breaking 100 Doors: Fewer but healthier and fun properties that pay bigger yield.

[09:45] Seeking Clarity: Biggest problem growing and scaling business is blaming everyone and everything else.

[10:47] Tactical vs. Strategic: Entrepreneurs are visionaries; why do the tactical crap?

[14:26] Accidental Perfect Landlords: Owners who take pride in their property.

[15:16] Prospecting Channels/Methods: Lead gen from realtor referrals via classes, podcast, and online reputation.

[16:30] Some clients don’t listen, follow the protocols, or get results. Do what you’re told!

[17:48] Door Envy: It’s not about doors, but whether you love your business and life.

[19:25] How do you turn your phone off at night? Do Not Disturb.

[20:35] Biggest Benefits of Seed Program: How to design a user-friendly Website, find clarity, ask for reviews, and create an online reputation.

[22:35] If you were to sell your business, what makes you valuable?

[25:07] Magical Mindshift: If you want people to invest in and spend money on you, be willing to do that for yourself.

[28:34] Memoirs of a Property Manager: What we go through managing owners.

Tweetables

Transparency of Property Management Industry: Toilets, tenants, and termites.

Cycle of Suck: Dealing with scummy owners and tenants sucking you dry.

Entrepreneurs assume everyone else is like them. Nobody’s like us. We’re weird.

Resources

Legacy Property Management

Tom Rath's StrengthsFinder

DiSC

DoorGrow Seed Program

Yelp

AppFolio

National Association of Residential Property Managers (NARPM)

OpenPotion

DGS 92: Property Maintenance with Liz Koser of Keepe 0

Transcript

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

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

Today, I’m hanging out with the fantastic Annemarie Sunde of Legacy Property Management. Annemarie, welcome to the show.

Annemarie: Thanks.

Jason: It’s been a while since we’ve chatted.

Annemarie: I’m having Jason withdrawals.

Jason: Yeah, you’ve mentioned that on the pre-show and I’m like, “You just show up. Show it to our weekly cult review, internally for our clients.” The topic for this episode is how I almost quit and then found joy in property management. Property management can be a tough business. It can be a tough industry. “Toilets, tenants, and termites,” as some of you say.

As business owners, we’re often in this promotion-sales mode. We’re just telling everyone how great our business is all the time. We start to almost believe it superficially, but then on the inside, sometimes it’s just not really how it is and there’s this disconnect. I would love to just give people just a taste of some reality and some transparency because business is not always great. Sometimes it’s just really not great.

I remember, way back, waking up when I was running my company as OpenPotion and realizing I hated my business. I didn’t like the clients that I was working with at the time. My team were out of alignment with my values. Everything was just off and I just want to stream Netflix today. That’s it.

Let’s go back to one of those early conversations you and I had. Give people a little bit of background, you and your business. You can give the pretty picture first. Tell everybody about you. Let’s qualify you.

Annemarie: I’m actually a degreed engineer by trade, worked 15 years in Oil and Gas in Denver. When I got married for the second time, I married a realtor, and I consulted to his business, actually growing his business. After a year of doing that, I said I never want to be a realtor. I never want a real estate license in my life, and now I have a real estate license. But I don’t do any of the buy-sell transactional selling, whatsoever. I’m not interested in that, I don’t have the patience for it, and you should know, I lack incredible patience. That’s part of my development that I’ve learned coaching with you.

Let’s fast forward a little. Just got into the opportunity to get into property management was offered to me, and I have always done flips, I’ve always had rentals my entire life with my father. I’m like, “Well now, I can be the boss of a tenant. This sounds fun. I can do this.” I did when we started our own business, I worked for a couple of property management companies. I felt they lacked integrity, a lot of what you talk about in DoorGrow. They’re just scummy, dealing with scummy owners, scummy tenants.

Jason: I talk about that?

Annemarie. Yeah, the Cycle of Suck.

Jason: Oh, the Cycle of Suck. Yes.

Annemarie: We had our own rentals and I was like, “You know, there’s got to be owners out there that actually want to be treated like something.” We created Legacy Property Management really to lead legacy with our tenants, with our owners, and with the people that we work with, that work for us. That’s where it was born. My husband stumbled across DoorGrow, and I was one of the first Seed Hackers 1.0.

Jason: Jeff, right?

Annemarie: Yes. I got into the Seed Hacker Program and then I got into coaching, but when I got into coaching with you, I was cooked. I hated my business. I was looking for anybody that wanted to offer me a good sum of money to buy my business. I did not want to be in it anymore. So, that’s where I was.

Jason: I remember this conversation. You were describing your business, you’re like “I want out,” and what did you want?

Annemarie: I wanted to be with my kids and I wanted to go sit on a beach.

Jason: You’re right. I want to spend time with my kids. I don’t want to do this anymore. I don’t want to deal with all these headaches and stress, and I’ve seen this. I’ve seen this a lot. And it doesn’t the business or the industry, it’s not even about the business or the industry. What did you realize it was about? I’ll ask you.

Annemarie: I was doing things that completely stressed me out. It started with a lot of the exercises you had us do on the coaching call, but one of the big things was the time study. The very first time I did a time study. I am not a tactical person, whatsoever. I am highly strategic. I’m the 50,000 foot. I actually did a Tom Rath StrenghtsFinders and I have strategic and futuristic in my strengths. I’m 20 years ahead of everybody, thinking about how I’m going to get myself onto a beach.

When I learned that, your comment to me was, “When you’re doing the tactical crap in your business, this is when you are grumpy. This is when you can’t handle it. This is when you’re stressed. This is when your kids are driving you crazy. This is when your phone’s going in the toilet. All of those things.” The minute I took that out of my job description and I was doing strategy, I started having so much fun, and the business was naturally growing because I was having fun.

Jason:We’ve thrown out a couple of terms that are insider terms here, right? So some people who are hearing this for the first time are like, “What are they talking about? They’re speaking some language only they know.” Let’s explain what the Cycle of Suck is. What is your perception of what the Cycle of Suck is?

Annemarie: It’s this vicious circle of not a great property, not a great owner yields crappy tenants, and it just keeps going round and round and round. You can’t get out of the circle.

Jason: The bad reputation and then you attract more bad owners, more bad properties. That’s where the whole industry sits in general, as a whole and aggregate in the industry has a negative reputation, and most businesses are taking on any owner. That’s something that the whole industry needs to shift.

Annemarie: I did that. When I first met you guys, that’s where I was. You’re hungry, you’re starting a business, you just take in anything you can take, and you’re realizing that the low-end people are sucking you dry, costing me more money because I’m using attorneys. It just wasn’t a fun thing.

So, I elevated our business model. We do know multi-family, for example. That’s our choice. We have fewer properties that pay a bigger yield so I’m sitting at about 110 doors, and I love it.

Jason: Amazing. You broke 100. I love it.

Annemarie: I did. Finally!

Jason: Did you throw a party? You should’ve throw a party.

Annemarie: We are going to throw a party. I think my senior property manager and I are going somewhere.

Jason: You deserve to throw a party. That’s awesome. They’re healthier properties than where you were.

Annemarie. Yes. They’re fun properties and we love representing them.

Jason: I remember that first conversation. You just want to spend time with your kids. You wanted out of the business, and I remember what I said to you. I said, “You’re just doing it wrong. We can bring this business into alignment around you,” but at that time you were serving the business. You were a slave to the business instead of the business fulfilling you and your needs, specifically. [...] an alignment with you.

Every business is different. What would work for you and fulfill you is different for me. We had a hard time even getting into this software, but I love the nerdy stuff. I would do technical stuff and I’d put that as part of my role in the business. You will hire someone up.

Everybody’s team looks different. If we build the right team around us, but the only way we can do that is if we’re clear on ourselves and that’s the biggest problem people have with growing and scaling companies or teams because they have no clarity on themselves. So, they’re externalizing everything and blaming the business, they’re blaming their team, they’re blaming their clients, and the problem is them. Once you get clear on you and we have clarity on what really fulfills you and energizes you and drains you.

You mentioned tactical versus strategic, right? Entrepreneurs, generally, we are strategic people. We’re the visionaries. That’s generally who all of us are as entrepreneurs. Some of us enjoy some of the tactical stuff. There are tactical things that I do enjoy, and you can hold onto those if you want to. But, in general, all the tactical things that we hold onto are the things that are holding us back. They’re holding an entire business back. The tactical things that drain us are the things that are keeping the entire company from growing and it makes us the biggest bottleneck in the company.

Annemarie: I figured everybody was like me. Why would they want to do the tactical crap? I actually have people that work for me and they can’t even see beyond their nose, and they’re fine doing the tactical day in, day out, day stuff. I can’t stand it.

Jason: That’s a big mistake we make as entrepreneurs. We assume everyone else are like us. Nobody’s like us. We’re weird. Raise the chair. My team members, they love doing the things that they love doing. I don’t love doing the things that they love doing.

Annemarie: Me neither.

Jason: That’s great. There’s seven billion people or whatever in the planet. There’s always people that love doing the stuff that you don’t love doing and that’s such an interesting mindset shift—to realize somebody would love doing this stuff. [...] that gift by giving it up,

Annmarie: You even taught me how to screen somebody if I’m going to hire them. They go through this whole process now that we have, including a DISC profile to see because I am High D and I am the bull in the China shop. If I’m always going to have to massage your feelings because I just let it fly, then you’re probably not the person to work for me.

Jason: You mentioned a few things that you did to go through this transition. As you shifted your business away from doing all the things that you felt like were draining you, that put you in a position where you wanted out, like you wanted to get rid of the business, what did you realize pretty quickly as you started to make these changes? You’ve already thrown out the word “fun” a few times, I’ve noticed.

Annemarie: If I have a week where I am doing tactical things, I put my mind into, “Okay, this is a week,” and I warn my family, “This is what I got on my plate. I could be nasty this week because I’m not having fun this week.” That happens a lot when I’m bringing on a new person and I’m training them on having to do the day-to-day again.

What I found to be the most exciting for me is I love to strategize on how we’re going to get properties. The way we get properties is hugely through realtor referrals because we don’t sell or buy any properties, so we’re a safeplace for them, and through my class that I teach. I’m teaching probably 2–3 a quarter now. I just did two and I have four properties from those two classes.

It’s people that I want to work with. It’s owners that take pride or we call them the accidental landlords that they bought in this market. We had so many people going in and out of the state right now, it’s crazy. They don’t want to lose the foothold in the Denver market. They’re petrified someone’s going to trash their house. That’s the perfect landlord for me. We talk a lot about that to realtors that have owners that they just sold a house to and now that’s where they go back to. What do I do with my house?

Jason: That was a significant piece. If you go back in your transition is getting clarity on what you really wanted.

Annemarie: And what I enjoyed doing.

Jason: Declare on your avatar in getting clear on what type of client you really were wanting to work with. I remember we had several conversations about that. Also, we talked quite a bit about different channels for prospecting and you found different methods that really worked for you. You were doing everything from podcasts.

Annemarie: I still do the podcasts. That’s on Thursday this week, and it’s with the investor. I get more leads out of that. The three places I get my leads are realtor referrals probably coming from my classes, my podcast, and my online reputation which is what people should not even be asking if they do the Seed Hacker Program because that blew my business right out of the water. I just got another house this week from a Yelp review.

Jason: So, those three channels, you didn’t really have a system or a process, you weren’t even really focused on those three channels before you had gone through the program.

Annemarie: I had no idea what to do.

Jason: Those were just three that worked for you. Somebody else could do three different things that might work for them. Help people understand. Some people are like, “I don’t know about Jason,” or they may be on the fence about working with me and they’re like, “I don’t know because I hear mixed reviews,” because I have clients that they don’t do stuff. They don’t listen to me. They don’t follow the protocols. They don’t get the results. You just did what I told you to do. You just did it.

Annemarie: And sometimes, I have the tendency to compare myself to somebody else. We just talked about, I broke 100 doors. I’m now entering my fourth year of business and I hit 100 doors. So, four years and I hit 100 doors. I have to say that if you don’t know the Denver market, for the last two years, houses have been selling and there’s no inventory. I probably bumped into 100 several times, but I’ve lost 12–20 out of my portfolio from sales that owners decided to sell.

That’s attrition in the business, but I got to say that I was constantly comparing myself. I’d passed two years and I can’t get to 100. Then I stopped focusing on it and I started focusing on getting rid of my crappy owners because those were crappy properties, and bringing on good owners that I wanted to work with and properties I wanted to. I marketed in those areas.

Jason: I remember. I remember this conversation. I remember you were having door envy. You were like, “I haven’t broken that 100-door barrier. I want to break 100 doors,” like it was this thing. Do you remember what I said to you?

Annemarie: Calm down.

Jason: Yeah. Don’t worry about it. It’s not about doors. It’s about, do you love your business? Are you enjoying yourself? Are you getting the life that you want to have? Are you getting to spend time with your kids? Do you enjoy your team members? Do you like the people that you work with. This is your life. Don’t get me wrong, I like when people go after a goal, but once you let go of it having to look a certain way and you focused on aligning the business with you, it just started to happen naturally for you.

Annemarie: What made me let go was setting critical numbers, another secret word in the secret club. I set critical numbers, and yes, one of my critical numbers was number of doors, but one of my top critical numbers was revenue coming in. What I found was, for the last two years, I’m making my critical revenue number despite being under 100 doors. That’s what proved to me, “Who cares?”

I can still go on vacation and literally shut it off. I don’t know a lot of property managers. I have to tell you, the funniest post was one in the Facebook group when someone posted, “How do you turn off your phone at night?” After I laughed for literally 10 minutes, I went in on probably a paragraph of crap on, “First of all,” and then ended with, “and you should call Jason,” because seriously, on my phone that was the most liberating thing. I shut my phone off at 8:15 every night and it’s silent, just Do Not Disturb until 7:15 the next morning. I don’t care what’s happening. There are professionals out there that can help them, not me.

Jason: All right. Great. No, I love this. Let’s go to the Seed Program, going through that portion which the coaching stuff that I took you through, we folded into our new version of the seed program, like majority of that stuff. So, it’s all one program now. Going through all of it, what do you feel were the biggest benefits and the biggest takeaways for you?

Annemarie: I had a website because I used that folio. That folio gives you this website. It’s just learning what things to draw people. I had no clue and quite frankly I really didn’t want to, and I love that there’s a whole team of your people that will make a website change in literally three seconds of my time. There’s that component of really designing a website that’s user-friendly, and I tweak it all the time based on what I see other people’s websites.

Why keep recreating the wheel? That was a big thing. Understanding what you wanted to focus on because when you get into property management, if you’re going to focus on multi-family like we do know multi-family, and from our owners, they love that we do know multi-family. That’s a different management than single-family luxury homes. That’s our niche. That’s where we focus.

The other thing, I had no clue. I just thought we had to be SEO be the first, blah, blah, blah. I had no clue what online reputation was. The first I remember two or three clients that came on because, “Wow, you have a great Yelp review. You have five stars on whatever,” and I’m like, “Wow. This stuff works!” So, I learned that this was important and to go and ask for the review. That is part of our workflow process. If from a tenant, contractor, realtor that’s referred us, or owner, we ask for referrals endlessly online and it has really helped us.

Jason: With that, we taught you how to build a process around that and how to leverage the law of reciprocity psychologically and all that.

Annemarie: I just learned really quickly at a recent NARPM chapter lunch, they had a really great speaker on, “If you were to sell your business, what makes you valuable?” Outside of number of doors, income or profit, the third thing is, “How involved are you in your business?” Because that means that it’s not translatable. If they’re going to buy it, they’re going to have to buy you to keep it going and some people don’t want to do that. I looked at my husband because he always think I got to be involved and I’m like, “I told you. I could be this much money if I would just go somewhere.” So, now he’s on board because he heard that.

I can easily go on vacation with my business. It’s much harder as a realtor to go on vacation, if you’ve got a buyer you got to be carting around. That’s how I look at it. I want to be able to come in and out of my business as I need to. That’s the part that I love.

Jason: Shameless plug. For those that are on the fence, there’s like, “Maybe I show up at DoorGrow, maybe not.” What would you tell them?

Annemarie: Don’t even think about it. Seriously. I realized that I was in the guinea pig stages of Seed Hacker, and I thought, “Oh, my gosh. How am I going to spend this money as a young company?” It’s paid for itself long ago, so it’s totally worth it.

Jason, you have an amazing staff that people will email you, you don’t even know who these people are and they got it. I love it. It’s great. Obviously, I was at the DoorGrowLive last year and we thought it was fantastic.

In terms of the resources that you have, with your coach and parlaying those or after listening to him speak, I looked at my husband and I’m like, “Guess what? I don’t have to pay that much because I paid Jason and he gives that to me!” I mean I learned so much.

Jason: I invest a lot in the coaches. I just signed up with another coach. I’ve got three coaches right now. If I mentioned how much money I spend on coaching annually, they would lose it because it’s probably more than most property managers’ annual salary. It’s pretty ridiculous, but that’s how I have value to offer to others and that’s the one thing I would tell everybody listening. If you want people to invest in you, you want people to spend money with you, you have to be willing to do that to yourself.

You have to be willing to invest in yourself and there’s a magical mindset shift that happened for me the second I decided to pay to invest in myself. Not just pay for a team member, not just pay for some marketing [...], when I paid to invest in myself and in my business, it changed my perception of my value and it changed how I sold. It changed my own confidence level in being able to pull in business. There’s an energetic shift that happens that when you invest in yourself, other people will invest in you, too.

Annemarie: I’m sitting here thinking about, I definitely have an entrepreneurial spirit, this isn’t the first business I’ve run. One could come in and say, “Okay, I did a few rentals here and there.” Now, when I hear people say, “I’m going to get into property management,” I just think, “Oh, my gosh. The guy just did a nine minute video on the four new Colorado laws impacting landlords and property management,” and I sent it to my owners. I spent two months on Capitol Hill trying to fight these bills and it’s just crazy. People are going to get themselves in so much trouble.

What I found is when I started coaching and going with DoorGrow is one could approach it, 10–20 properties, you could probably manage it. But when you start to get such a portfolio and you really don’t have processes, you really don’t know what you’re doing to be honest with you. I agree with you. Once you know where you’re really good at, and that’s why I said doing what you’re created to do and hiring people to do the other stuff. I still do listing appointments. I don’t do them all anymore. Remember you told me, “You need to give that up.” And I’m like, “You’re crazy. I’m the only one that could do a listing appointment.”

Jason: I’m like, “Let go of your ego,” right?

Annemarie: Right. It was like, “They can’t do it. They can’t do it. We can’t lose this,” and now, I don’t even want to go, but sometimes, I do. Sometimes it just keeps me in touch with this is what life is about and this is what they’re facing. I do them, but I have no problems handing that kind of stuff off. I like to be in teaching and doing the videos and doing the podcast. That’s my gig. That’s what I like.

Jason: And you’re enjoying it.

Annemarie: I am. I love that part.

Jason: It’s such a transition. This is one of the things that’s amazing for me as a coach, that I get to see the contrast. I remember that conversation. I remember you wanting out and not liking it, and you’re a passionate person when you talk. I felt it. Now, you can feel this, too. You’re like, “love” and “fun.” These are adjectives that you’re associating with your business which most property managers are like, “She’s high on something right now. I don’t know what Jason gave her, but this sounds like crazy talk.”

Annemarie: Having the right people, honestly, makes the job a lot more fun. My property manager’s been with me the longest. We literally wrote a coffee table book for our owners for Christmas. It’s Memoirs of a Property Manager. We can’t make this up. We were sitting in Starbucks, laughing to the point of how retarted are these people, and we manage them! She said, “We should put this in a book and give them to our owners just to remind them what we deal with.” So, we did and they are asking when’s the next volume coming. You got to have time for that.

Jason: You don’t want to anymore.

Annemarie: I tell them a lot of times, “If we can’t laugh about it, then certainly we will be in the fetal position crying about it.”

Jason: Laughter is the stage before fear. Annemarie, it’s so good to catch up with you. I really appreciate you. I appreciate your husband, Jeff. It’s been phenomenal watching you guys progress and feeling all the love back from you guys. I really appreciate that. I just get to work with the most awesome clients. This is the type of things that I love doing. This is my jam. I enjoy it. It’s been great being able to work with you and I appreciate you coming and hanging out here on the DoorGrow Show with me.

Annemarie: Yup. And I will say, if I have one piece of advice, if they do hire DoorGrow, the Seed Hacker, do what they say to do. It’s not take a pill and hope for the best. It’s you having to do the work. I was all in. If I was going to spend the money, I was all in. I was going to do what I was told to do and that’s my biggest advice. Don’t spend it if you’re not going to do it.

Jason: Right. And to be honest, those are the only clients that get great results. It’s that last 10% of doing the stuff that I tell people to do, that not everybody really wants to do. It’s that last little dialing and that last little 10% that gets you 90% of the results.

Annemarie: Yup. We appreciate you guys, for sure.

Jason: All right, Annemarie. Thanks so much. I will let you go. Bye.

Annemarie: Bye.

Jason: That’s super rewarding for me as a coach. I don’t know that there’s anything more fulfilling than being able to see a client progress. It’s like watching my children succeed in anything. It doesn’t even matter what it is, it just feels good because you’re seeing this. It’s really awesome to have her come on the show.

If you are property management entrepreneur, you feel like you need somebody in your corner. You want somebody that believes in you, somebody that can challenge you, somebody that can help you see something you can’t see because you’re in it, you’re too close to the fire, I need people to tell me the same stuff that I would tell myself to do because I’m too close to the fire in my own business. I would be honored to take on helping you in your business, being your coach, and helping you grow your company. Reach out to DoorGrow.

We’re really picky about the clients that we take on because I want clients like Annemarie. I want clients that are going to do what I tell them to do. I want clients that going to trust the process. I want clients that are going to go all in. If you feel like you’re that type of person, then reach out to us. You can check us out at doorgrow.com.

That is it for today. Goodbye everybody and until next time to your and our mutual growth. Bye, everyone.

Download this Episode

Aug 20, 2019

When property managers need a helping hand, where can they go to find the right handyman/maintenance contractor?

Today, I am talking to Liz Koser of Keepe, an on-demand marketplace that fills the supply-and-demand gap between contractors and property managers. Liz is a real estate investor and landlord with 10 properties, 15 doors.

You’ll Learn...

[01:40] Early Exposure to Property Management: Liz is following in her parents’ footsteps of real estate investing.

[01:54] Own vs. Rent: Liz’s first condo was her own home that turned into her first rental. Since then, she typically purchases 1–2 properties a year.

[02:07] Diversify Property Portfolio: First year for Liz to explore out-of-state investing.

[03:32] A lot like Uber: Based on location and availability, contractors go through a background check before picking up jobs via Keepe’s mobile app.

[04:00] Keepe Connecting through Techstars: Fast track program for startups to get feedback on product/market fit; network with others to quickly bring things to market.

[04:39] Future Growth Goals: Keepe’s on the West Coast and making its way to Denver and beyond.

[06:25] Why choose to use Keepe? Allows property managers to feel safe expanding, growing their business, and extend the reach or capability to get jobs done.

[08:55] Keepe Options as Seasons Change: When things heats up, it’s time to grow.

[10:07] Keepe’s Process: No monthly subscription fee, paid on-demand.

[11:08] Common Concerns and Questions: Keepe constantly collects data and feedback from customers and others to improve its network of contractors.

[12:25] Building Relationships and Referrals: Bring over or block contractors to join the network.

Tweetables

Diversify within the real estate investing realm.

Pick up out-of-state properties, and continue down that path.

When everything heats up, that’s the time to grow.

Keepe makes property managers feel safe expanding, growing their business to get jobs done.

Resources

DGS 91: Profitability Before More Doors with Shawn Johnson of Independence Capital Property Management 0

Transcript

And today, I’m hanging out with the fantastic Liz Koser of Keepe. Liz, welcome to the show.

Liz: Thanks for having me.

Jason: Liz, give us a little bit of a background. Who is Liz? The bio that I have says you’re a Seattle real estate investor, landlord, you have 10 of your own properties, 15 doors, alongside with your husband, your parents actively invest in rental property, and you were exposed to this early on. Tell us a little more about you and how you got into property management or into the space.

Liz: As you said, my parents were already investing in real estate and I have bought my first condo in 2009, which was my own home, and that eventually became my first rental. Then from 2012 to now, I steadily bought 1–2 properties a year. Last year, we didn’t get any, but this year we already have two and I think we’ll probably going to continue to add this year and continue to be aggressive about it.

That’s where I’m at on the investing side. Also, I think I mentioned this in my bio, but this is the first year where I’ve explored investing out-of-state. I picked up my first out-of-state property and have every intention of continuing down that path. With the Seattle market, it’s high and it just makes sense also to diversify. I know people diversify within the stock market. I actually think it’s somewhat important to diversify within the real estate investing realm as well.

Jason: Now, lead us towards Keepe. How did Keepe get started, what’s your role there, and give us a little background there.

Liz: Keepe got started because there is a supply and demand gap between having handymen available and property managers’ need for finding handymen, especially in the markets that we’re in today. Keepe got started as a way to address that gap. We are an on-demand marketplace, matching contractors and property managers.

It works a lot like Uber in that contractors pick up jobs on mobile app, based on location and availability. They go through a background check and so on. One of the Keepe founders does also own rental properties. I had known him previously and that is how I made the initial connection. Keepe went through Techstars in 2016.

Jason: What is Techstars?

Liz: Techstars is a startup incubator, which is a fast track program for startup companies to get feedback on product and market, the whole fit, top-end networking with lots of other entrepreneurs and investors to bring things to market more quickly.

Jason: Okay, So, that means it rapidly was getting ready faster. Where’s Keepe at now in terms of growth and penetration? How new is Keepe for those that are listening?

Liz: We’ve been in Seattle the longest, but actually Keepe is in the greater Seattle area, Portland, San Francisco Bay Area, San Diego, Phoenix, Arizona, and then most recently Los Angeles and Orange County.

Jason: You’ve hit a lot of the major markets here on the West Coast, right?

Liz: Yup.

Jason: What’s next, Denver?

Liz: Yeah. I think Denver is a very good candidate and I’m actually from Colorado, so Denver would be a good fit for me personally in terms of running the sales side of Keepe. Also, I think Austin, Texas or the Dallas Fort Worth area, but definitely we’re here to grow nationally. With that, the first step is getting off the West Coast, right?

Jason: Right. When you start shifting towards the east, it’s going to be Atlanta and Jacksonville. Those are big markets for us. They seem to attract a lot of businesses there. Certainly those.

Liz: It’s interesting. We’ve actually received a few phone calls from the Atlanta area, property managers asking if we’re there yet. That’s a good sign we’re getting preemptive calls.

Jason: All right. So the goal is expansion, you guys are growing, and eventually people will be listening to this because this episode will have been out for a while and you might already be in some of these new markets, right?

Liz: Right.

Jason: Explain to everybody why they should choose to use Keepe. I know a lot of property managers are like, “Well, we find our own people,” or, “I don’t trust this.” What are some of the typical things that you tell people to sell this to them?

Liz: One, starting now, a lot of property managers who use Keepe kind of slow go. Let’s say they start to send us a handful of jobs and then over time, we end up gaining a larger portion of maintenance from our customers. I know people have their trusty handyman, but I would say a big need comes up when people say, “Oh, no. My handyman retired or moved away,” and this happens all the time.

That is one area where if you’re counting on one or even two people, there’s a company in Arizona that said, “Oh, both our people retired at the same time.” It just doesn’t work in the long run. The other thing is when property managers are depending on those one or two handymen and they’re also a little bit geographically limited.

Some of our customers maybe were in a certain Bay Area city, let’s say San Jose, and they’re weren’t willing to pick up clients in San Mateo because they didn’t have a contractor in San Mateo. Using Keepe now opens the door to look at branching out into other geographies as well. We’ve had customers that have been able to expand their footprint because they have Keepe in their back pocket and they know they can handle maintenance in other areas.

Jason: So, having Keepe allows these property managers to feel safe expanding, growing their business, and allows them to extend the reach or capability as far as their challenges with getting jobs taken care of that they have.

If the handyman retires, moves, all these kinds of stuff, then they’re typically in pain. This is one when they typically would reach out to Keepe? Is this what you’re finding?

Liz: That is where they are like, “Oh, great. Now I get it.” We have a lot of property managers try us out before that point and we’ve had property managers that have said, “Oh, great. This helps me grow because I maybe had one on-staff handyman or two and I wasn’t sure about adding a third.”

Sometimes, they realize that there’s busy seasons and so seasons, so, “How do I keep our team busy throughout the year?” Well, you might be able to keep one person busy throughout the year and utilize Keepe instead of adding a second person. There’s a lot of options here.

Jason: That’s a little bit of flexibility to what they’ve got going on, which makes a lot of sense. Property management is a very seasonal sort of business. It really heats up in the summer and even if you look at Google Trends and look at search volume, you can see the year just spike through summer every single year in search volume for property management.

That’s when everything heats up and that’s the time to grow if they’re needing to expand during those seasonal times without bringing on staff because bringing on somebody long-term is a commitment. Nobody wants to lay somebody off if things gets a little lame. It allows them a little safer adjusting.

How does the process work with Keepe? How do they work with you?

Liz: We have a pretty easy sign-up process and we actually don’t have a monthly subscription fee. We are paid on-demand. Keepe is both a platform and in the [...] contractors. All the payments flow through us. Invoicing comes from Keepe and we pay out the contractors.

The sign-up process is pretty much getting set-up for billing terms. When property managers use us for a job, that’s when we make money. We actually don’t have a monthly subscription.

Jason: Interesting. So, it’s only when you need it.

Liz: Yeah, but our job is to earn a greater percentage of our customer’s business, which is good for our customers because that means that we are working to build a relationship in the long run.

Jason: Fantastic. What are some of the common questions or concerns that people will bring up when they call you? We got people listening right now. They probably have these questions. What are the typical concerns that they have in handing something over to Keepe?

Liz: We get questions about how do we find the contractors and what’s our process for getting contractors on board. Sometimes, people think that there’s somebody in the background dialing a list to find them a contractor. It’s just shifting the burden. We actually have a team that interviews contractors. We do criminal background checks and then from there, we are collecting ratings on the contractors, so tenants today are the ones that respond once a job is complete unless it’s a vacant unit and it’s a rental turn, then it would be the property manager.

We’re constantly collecting this feedback and we have contractors that have been in our network for multiple years. We do remove contractors at times. So, it’s all about the feedback loop and continuously improving the network.

Jason: Got it. Fantastic. Any other questions or concerns that they might have or that they bring up during the sales process?

Liz: One question we get is if they don’t like a contractor, can they block them? Yes, we do allow property managers to block certain contractors. It’s come up more recently is, “If we end up going with Keepe, can our handyman join Keepe’s network?” Yes, we are happy to take those referrals from property managers. They are probably some of the best referrals we can get because if one property manager likes the contractor, then that’s a good sign going forward.

Jason: It kind of like a timeshare.

Liz: Yeah, a little bit.

Jason: They’re like, “Can I share my contractor with some of the other people in your network, so I can keep them on?”

Liz: Yeah, definitely. Once question we get is can they request their contractor. When you think about how Uber and Lyft operate, where they’re matching you with the driver near that location when they’re available, that is essentially how our network works. Although you could have a preference for someone, if that person is not available at that scheduled time, then it’s not going to be an exact matching. That’s one thing to keep in mind with a fluid marketplace is that it doesn’t work with the on-demand model to request a specific person necessarily.

Jason: It’s optimized for efficiency. The trade-off in not getting to pick Steve is that you get the job done for faster and probably get a better review.

Liz: Yup.

Jason: This is very interesting, super helpful. I’m excited to see you guys expand into some more markets and grow. Anything else anybody should know about Keepe that we didn’t cover?

Liz: I am always interested in hearing from people in other markets, too. Like I mentioned, we had a few calls from the Atlanta area. I do make note when people come to us and I’m like, “Oh, there’s already a lot of demand there.” So, even if we’re not in your city today, I would recommend reaching out because I do track that. It’s very telling of demand and helps us in the decision-making as we move forward into new markets.

Jason: Liz, how can people get in touch with you to let you know they want you and your market or if they’re in one of the markets that you cover, how can they get in touch?

Liz: They can reach me at liz@keepe.com.

Jason: And they can check Keepe out at keepe.com, right?

Liz: Yes.

Jason: Perfect. All right. Liz, it’s great having you on the show. Excited to see Keepe grow and expand. It sounds like the service that helps feel that in-between gap between people’s in-house maintenance, people’s seasonal maintenance, some of these challenges that they’re dealing with. I look forward to seeing which markets you get into next.

Liz: All right. Thank you for having me on the show, Jason.

Jason: Yeah. Thanks for being here. So, check them out at keepe.com and see if it might fit. As always, I love getting feedback from you guys, so let me know what you think of these guys. And I appreciate Liz being here on the show.

If you are a property management entrepreneur that is wanting to add doors, you’re trying to figure things out, you’re struggling, and things just don’t seem to be working, I would love to have a conversation with you. Reach out to our team. Go to doorgrow.com, give us a call, connect with us, schedule an appointment, and check us out.

If you are a property management business that can handle adding 50 new doors at least, you want to add maybe 100 doors over the next year at least, then you can go to doorgrow.com/optin. Plug in your email address and that will get you access to some case studies. See if you can see other people that have done it. And they’ve done it without SEO, pay-per-click and content marketing, without social media marketing, without pay-per-lead.

They were able to grow their businesses organically, healthily, with warm leads to take away last time, have a much higher close rate. You’ll also see that they’re all really happy, which is not super normal sometimes in this industry. It’s a tough industry. I want you to notice that. So, check out those case studies.

On that case studies page, I have a link to free training called DoorGrow Secrets that really is the beginning of our training material that I give out for free. I’m going to share with you and add some concepts like The Cycle of Suck, The Four Ds to Revenue, Cold Leads Versus Warm Leads, The Myth of SEO, and some other cool stuff that’s going to help you see why growth has been challenging and what makes the most sense to help you grow your business.

Hopefully, everybody checks that out, doorgrow.com/optin is where you go to that; one word. So, until next time, everybody, to our mutual growth. Bye everyone.

Download this Episode

Aug 13, 2019

Why switch from a fun, high-flying job to a stressful one? Property management is the “Golden Ticket” to finding new properties and creating value to help others.

Today, I am talking to Shawn Johnson of Independence Capital Property Management about putting profitability before adding more doors. If your company isn’t profitable, than you can’t create value for the community it serves.

You’ll Learn...

[02:00] Property Manager with Spare Time: Shawn serves as an instructor pilot for San Juan County Sheriff’s Office.

[02:40] NARPM professional member, chapter president, and residential management professional (RMP).

[04:30] Passion for Property Management: Happiness comes not from avoiding problems, but finding fun challenges.

[06:02] Innovative Incentive: Competing for staff resources increases salaries, compensation, and revenue to successfully facilitate growth and manage the company.

[07:35] DiSC Personality Type: Motivated by money or recognition?

[10:15] What makes a business profitable? Finding perfect customer/market fit via value-ads and associated fees.

[13:42] Charge fees to compensate for extra time, energy, and effort without extra pay.

[14:57] Cost Savings: Implement less labor-intensive work (paper checklists) and more technology (videos).

[15:55] Tools and Software: Transition from a brick-n-mortar business to remote/virtual office using G Suite, Process Street, AppFolio, and RingCentral.

[18:35] Current Client Base: Push out and justify new fee structure; talk them through it.

[22:15] Sense of Scarcity: Feel safer and more comfortable raising fees and rates. [24:05] People are willing to pay for good service and experiences.

Tweetables

Golden Ticket: Finding new properties, and creating value for others.

Property management is never dull.

Some people aren’t motivated by money, but freedom.

Charge fees to compensate for extra time, energy, and effort.

Resources

Independence Capital Property Management

National Association of Residential Property Managers (NARPM)

DGS 7: Increasing Fees in Property Management with Darren Hunter - Part 1

DGS 8: Increasing Fees in Property Management with Darren Hunter - Part 2

DGS 9: Increasing Fees in Property Management with Darren Hunter - Part 3

DGS 80: Automating Your Business with Process Street with Vinay Patankar

DGS 82: Real Estate Revolution with Nat Kunes of AppFolio

DGS 90: Generating Leads with Ben Atkin from DoorsUp 0

Transcript

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

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to change 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.

And today, my guest is Shawn Johnson of Independence Capital Property Management. Shawn, welcome to the show.

Shawn: Thanks, Jason. Thanks for having me.

Jason: Glad to have you. Shawn, we’re going to be getting into the topic today of profitability before more doors. When I mentioned that before the show, you’re like, “Yes, the cart before the horse.” Let’s get into that, but first, I want to give people a little bit of background on you. I’ve got your bio here and I’m going to read this and then maybe you can come and introduce yourself.

Shawn grew up in Aztec, Nex Mexico. After completion of his Associate’s Degree from Glendale Community College, Shawn began flight school in Scottsdale, Arizona. Shawn’s career as a helicopter pilot provided opportunities to fly internationally into Mexico, off-shore into the gulf of Mexico, and as an EMS helicopter pilot. Shawn currently flies for the San Juan County Sheriff’s Office as an instructor pilot in his spare time.

Shawn began his career in real estate in 2013 and has been investing in real estate since 2003. Shawn is currently a professional member of the National Association of Residential Property Managers and has earned his Residential Management Professional (RMP) designation. In 2017, he served as the NARPM Albuquerque Metro Chapter President and has been elected to serve at the 2020 Chapter President. Shawn enjoys golf, baseball, hunting, and fishing. He apparently is also connected with lots of really lengthy phrases and titles including his business name.

Shawn, give us a little bit of a background. Who’s Shawn and how did you get into property management, so people can understand why should they listen to this guy say anything.

Shawn: How did I get into property management? It’s kind of by default. My wife pulled me into it. She was a corporate paralegal for a large investment firm in California and in that process we moved, had kids, we moved to New Mexico, and she decided, “You know what? I think there is a need here.” There is definitely a need and we’ve started a management company. I was still flying helicopters at the time but she’s like, “You know what? I can’t do it alone. You’ve got to get out of the fun job and get into the stressful job.” So, I quit flying and here I am.

Jason: And you regretted it ever since, right?

Shawn: No, I actually really enjoy it.

Jason: Good.

Shawn: Your introduction to property management is spot on. I think there’s so much gold in it and it’s just really creating value for people. I really enjoy it. Really, it’s a nice “in” to investing in properties. I love investing in properties and this is like a golden ticket to find new properties.

Jason: Property managers and everyone in the industry love to joke about how hard the industry is, but there is this passion for it that everyone seems to develop. I think happiness comes not through avoiding problems and challenges. It comes through finding challenges that are exciting to work on and property management is never dull.

Shawn: Yeah, that’s a fact.

Jason: Never dull, right?

Shawn: No.

Jason: Let’s get into this topic. Why is it important to have profitability before focusing on getting more doors?

Shawn: For us, it was always a mission to be profitable right at the start. Back in the day, we’re just a management fee company. Because of that, we relented in the growth. We had to find ways to make money and compensate our employees appropriately. We live in a very blue collar town that is oil- and gas-driven and the salaries are very hard to compete with. We had to find ways to compensate them nice so that they weren’t pulled away from property management into oil and gas industry.

Those are the things that were important to us. If you’re not a profitable company, you can’t create value for the community that you serve. You just can’t. You have to have money to be able to grow and expand and introduce new programs into your business. That was our mission right at the beginning.

Jason: Because you’re competing with oil and gas for staff resources in your market, you’ve had to probably have a higher salary base than what would be typical for most management companies in most markets.

Shawn: Yeah, they sell.

Jason: In order to do that, you probably had to get a little bit innovative. Anytime we have a constraint as an entrepreneur, we have a challenge like that to overcome, we have to innovate. What were some of the steps you took to create a space that you could afford to have really good team members?

Shawn: One step was to create an incentivized comp plan. Our property managers are licensed real estate brokers, but we pay them off a percentage as the whole of the portfolio, not just a management fee. Anytime they bring in a late fee or an annual inspection that’s performed on the property, then they get a portion of that fee as well. That help us increase their annual revenue as well because it hurts when they lose a property and when we get a new property on, it actually helps them gain their salary as well.

Jason: Okay. You’ve basically created the natural incentive for them to help facilitate growth and help successfully manage the company. And if the company does better, they do better.

Shawn: Exactly.

Jason: I find that a lot of people, especially those that on a DISC profile that are not DI, they don’t have a high economic score. They’re not super motivated by additional money. As entrepreneurs, we tend to naturally think everyone’s like us; they love money. Those individuals that are not motivated by more money are more motivated by recognition. When you pick these team members and you have this comp plan, are you looking for people that also operate somewhat in a BDM role? Are they more of a sales-driven type of person? Are they a DI DISC personality type or more on the extroverted side?

Shawn: No, we actually don’t want to mix those two―BDM and a portfolio management. You’re right. A lot of people are not motivated financially like entrepreneurs are, but what we found is giving unlimited vacation time, some perks to the business, having the ability to work from home or wherever they are. Everything that we do is electronic and digital anyway, so those perks. A lot of them are young parents and if they need to pick up their kid at school at three o’clock, who am I to say? As long as your job is done and you’re doing it effectively, then we don’t put constraints on that. I think that pools in that attraction to the job.

Jason: I find those to be huge incentives, similar to running our virtual teams. Being able to work virtually and work from home, having flex time, being able to set your own schedule and as long as you’re getting work done, and being able to take vacations when you need to or want to, that’s huge. People want freedom. They want autonomy and that tends to attract the more entrepreneurial people we would like in our business.

To what you’re saying, yeah it makes sense. The BDM portfolio thing would be segregated. But also that allows you, in your market, to have compensation that is on par with maybe what they might be getting in the oil and gas industry or at least competitive, right?

Shawn: Absolutely. I would say that our salaries, once they have a full portfolio, they’re making as much, if not more, than what they would get comped in oil and gas industry which is good. That’s what we want.

Jason: Right, and in oil and gas industry, they probably don’t have some of those other perks, I would imagine?

Shawn: Oh, not at all.

Jason: You’ve made your business intentionally competitive to maintain good people. Let’s get deeper into the profitability aspect. Since you’re paying more money for people, how do you make sure this is profitable?

Shawn: We really evaluated the things that we did as a business beyond just the normal management stuff. What are the value-adds that we do every day? If they are a true value-add, can we add an associated value-add fee to it? We kind of looked at it that way.

We went through Darren Hunter’s program and it was phenomenal. It definitely revolutionized the way we thought about our fee structure, but it also helped us think about and be cautious of those clients that are cost-conscious. If they are and all they care about is the cost of the service, then they may not be the right fit. It naturally brings in that right type of clientele when you have a fee structure beyond just a flat fee and everybody else is doing the same flat fee or whatever percentage fee. So, that was huge for us.

As far as profitability goes, it varies in leasing season, but in our leasing season we’re about 44% profitability. Leasing fees and lease renewal fees, those things have to happen in the property management business. But to actually gain revenue from it is extremely important.

I could look at our business structure and see that we have a leasing fee and we have a lease renewal fee, but my competitors lease homes in twice the amount of time that we do and they don’t push for lease renewals.

So me as an investor, I’d be upset if they didn’t try to keep my tenants in a lease especially through the winter time. Such a cyclical business, we have seasons, and you don’t want it to go vacant in December. That little fee is nothing compared to having a vacant home in those times.

Jason: What other fees did you guys start to identify and add going through this process?

Shawn: We did a lease administration fee for our tenants. That was pretty big. The annual inspection fees—that’s a third party vendor that’s an actual inspector and he’ll come inspect the houses on an annual basis—there’s a little upcharge for that. A year-end statement fee. We found that our controller list just spinning a ton of time preparing for the year-end stuff and making sure everything was clear to send off to our clients’ accountants, so we incorporated a fee in that. Then a maintenance coordination fee. Our maintenance coordinators, we have one and we just hired a new one so we have two now, and they’re just super busy. Coordinating maintenance is a huge task and it’s such an important one here. We do have a small fee for that.

There’s probably a bunch more. I’m not in the day-to-day as much anymore, so I’m kind of not thinking of the big ones. Obviously the bulk ones were leasing fee and lease renewal. Those are big and they’re often overlooked.

Jason: One of the things you did then was you identified all the different situations in which it was taking extra time, extra energy, extra effort, you weren’t getting paid anything extra, and then just systematically saying, “Hey, can we add a fee to ensure that we’re getting compensated for this additional work?” to make sure that you business is profitable.

Shawn: Sure.

Jason: Okay. We’ve got somebody watching says, “Can you list the fees again?” I had down a leasing fee, a lease renewal fee, lease administration fee, annual inspection fee, year-end statement fee, and a maintenance coordination fee.

Shawn: Those are the big ones. Kelly, reach out to me. I will give you the list.

Jason: Slow down. Kelly you can rewatch this as many times. This is being recorded and it’s also on Facebook. Also for those watching this later, we have full transcription when this comes out on iTunes and you can check that out on our blog at doorgrow.com.

Let’s get into other ways in which you’ve made this profitable. So, obviously increasing fees. You weren’t able to decrease cost with staff. This allowed you to increase cost with staff. Were there any cost savings things that you were able to implement?

Shawn: Probably just technology and trying to not be super labor-intensive. I would say that doing things like move-in, move-out videos instead of running through an entire list on paper and whatnot. It takes a little bit less time than doing it on paper. Those types of things. It’s just efficiencies in the office. Then we set up our team literally to work from anywhere. If you’re on vacation, you want to check on a lease or whatever, it’s possible and super helpful. Those things help with driving cost down because you’re not focusing on the, “Hey, John. Are you back at the office? Can you reach me that file?” That’s just a waste of time.

Jason: What are some of the things you’ve done to enable and facilitate this transition from being a brick-and-mortar business that operates on sneakernet, where everybody is walking into each other’s offices saying, “Hey, do you have this?” to being a virtual team that they can work from basically anywhere?

Shawn: The big things are softwares that enable cloud access. Our general office is on G Suite. Everything operates through there and then our processes are through Process Street which is super helpful and can be accessed anywhere again. AppFolio for our software. They are super tech savvy as far as online stuff. I wish they’d open their API, that’s my shout out to them.

Jason: Yeah, I’ve heard that a lot.

Shawn: I imagine you have. And then RingCentral. We have a team in Mexico and I’ve got a team member in the Philippines, and they literally can call our office in Farmington, New Mexico. Then we have another Flagstaff office as well. It’s so easy because they can pick up their phone and it acts like they’re dialing from their desk. That was a key point we had to set up six years ago which was, back then, it wasn’t really heard of.

Jason: Cool. I use all of those software or have in the past except AppFolio.

Shawn: You don’t need that.

Jason: We’ve had Process Steet on the show. Great interview. For those listening, I recommend you check it out. G Suite were a Google Apps reseller, so if people need help with that we can certainly help you get set up. We used RingCentral for several years. We eventually switched to Talkroute because we found that most of our team weren’t doing a lot of calling on our team and if they did, they had unlimited cell phone minutes. Talkroute just allows you to auto attendant and the call routing and the extensions but they can dial through the Talkroute app out of their phone and then it just uses their cell phone minutes. It’s free basically for outbound calls. It can also receive text messages. We switched to Talkroute and probably saved ourselves about $400 or $500 a month.

Shawn: That’s big. I love it.

Jason: What are some other things you focused on then to facilitate profitability? You’ve got the fees. You’re paying your team well so you can compete. You’ve got your leveraging technology. You’ve set up your team to be more virtual which is scary for a lot of property managers who’ve been doing things a certain way. Anything else?

Shawn: What I would say is tap into your current client base. You probably have a ton of really loyal clients. Don’t forget to just really push out your new fee structure and justify those fees. Believe in what you’re charging to those current clients. When we switched over to a new fee structure, hardly anybody left. We had 12 clients leave on our first push. We found that those 12 clients were probably 12 good clients to leave.

Jason: Out of how many clients?

Shawn: We were at 614 at the time, 12 left. We had a second push and we did this in phases because you have to be really sensitive to homes that are vacant. You don’t want to increase fees on somebody that has a vacant home. That’s a stressful time already. We certainly don’t want to increase feels on a client that has not been in your portfolio for less than a year. They don’t really know and trust you yet. Then I haven’t built that loyalty for you. So don’t touch those yet.

Once you segment those out and you found the client base that you really want to go after, then do it. Don’t just send out an email and hope that they sign into an agreement. You have got to follow-up. If you don’t follow-up, they’re just not going to believe in what you’re trying to do. So, make sure that you follow through with all of that. I’ve heard of people, “Hey, I increased my fees and I sent out this email. I got no response,” and I’m like, “Well, did you do anything else besides that? Because you got to call them. You got to pick up the phone and just talk them through.” It’s a scary thing.

I just had a fee increase from one of the vendors that we use in our business and I was like, “What the heck?” My initial reaction was, “What the heck is going on?” Then, they talked me through and I was like, “You know what? It’s all good. We’re happy with you guys. We’re going to move forward. It’s all good.” I think that’s most people.

Jason:Yeah, have a conversation. If you’re looking for the process that you went through or that Darren Hunter could have outlined—we’ve had him on the show before a few times—check out the episodes with Darren Hunter. Great content. He gave a lot away here in the show. You can check that out. I just saw him actually in Phoenix.

So, 12 of out 614 that’s maybe 2%.

Shawn: That was the first push. We did lose more the second round. There was probably a total number of 65. I can’t remember exactly that left, but our profitability went up.

Jason: You lose 10% but you’re making more money, then not such a big deal, and usually those are the worst properties in your portfolio. What tends to happen then is you increase your revenue. You lose your profit. You lose a little bit of clientele, but you’re also losing the ones that take up the most amount of time, typically. Those particular doors probably have 10 times higher operational costs than a good door. By losing that pile in your portfolio, you’re gaining room to manage a lot more and you’re gaining a lot more leverage. Your profitability probably goes up even more because your operational costs go down significantly by cutting out the most challenging, most micromanagy, and most price sensitive owners that are the most challenging properties.

Hopefully, people are a little bit sold to this idea, “Hey, maybe I can increase my fees,” because I do believe that property management businesses in general are not charging enough. They really deserve to be paid well for what they do. They provide a really valuable service and I feel there’s been this false scarcity that’s been created by marketers. Focus on SEO, pay-per-click and these sort of things where it feels like it’s difficult to grow. It feels scarce but they’re 70% self-managing in single family residential. There’s tons of blue ocean, there’s tons of opportunity, the scarcity is false. It really doesn’t exist.

For those listening, if you feel like things are scarce, we should have a conversation because we can get you out of that mode of scarcity so that you feel safer and more comfortable raising your fees and rates. I believe that’s a false perception that doesn’t need to exist in the industry and it creates a problem for the entire industry—this sense of scarcity. It creates this competition that I don’t think really needs to be there. Really, the industry as a whole needs to be building each other up and helping each other out. You seen that being involved in NARPM.

Shawn: Yeah, that’s right. NARPM’s big on that.

Jason: Shawn, this has been really helpful. Any other other takeaways or things that you’ve explored your journey to make your business more profitable to grow your company?

Shawn: I think most people get a little scared because of the competition and they’re worried about raising their fees. Let me just tell you that our competitors don’t charge anything besides a tenant, whatever, management fee. I almost said the fees. I don’t know if that was against the rules or something like that.

Jason: I’m not a property manager so I guess you and I can talk about it. But someone else might hear it. We’re not colluding.

Shawn: We are not colluding. Just don’t be fearful of that. I think that if you’re truly creating a value for your customer and clients that that is irrelevant, that people are willing to pay for good service and good experiences. When you raise your fees, it has a natural thing that happens that you get rid of the lower-end properties. The lower end properties cost you more money, they cost you more time, they cost you more stress, and they cost you more employees. They will burn out on the low-end properties. Once you bring on nicer properties and you keep to a standard, they are willing to pay the higher fees and get better service, and it naturally increases your profits. That’s a big win for us.

Jason: Awesome. Well, Shawn it sounds like you’re doing great things in Farmington, New Mexico. Did you ever think that you would just end up in Farmington, New Mexico?

Shawn: That’s the thing about New Mexico. It’s the land of entrapment, but it just brings you back. I’ve lived all over the country and it’s a good place to raise a family.

Jason: Awesome. Shawn, I appreciate you coming onto the show. Thanks for being here. I appreciate your insight and I wish you continued success.

Shawn: Thank you, Jason. I appreciate your time.

Jason: If you are a property management entrepreneur that wants to add doors and make a difference then maybe we should have a conversation. So, reach out. There is a lot of opportunity in the industry to grow a property management business right now. I think we’re on the cusp of a wave. I think the industry is going to blossom and grow. There’s a lot of big and good things happening when it comes to technology, when it comes to software, when it comes to awareness. We would love to be a part of facilitating that journey with you and I would love the opportunity to be your coach in your business.

Reach out to DoorGrow, let’s start with a conversation, and I will give you a free training on some of the secrets and tips. I call it DoorGrow secrets on how you can avoid some of the most common pitfalls of preventing growth. Just reach out and say, “Hey, I want DoorGrow Secrets.” You might find it so interesting and get so excited, you’ll want to work with us. That’s my hope. So, we will talk with you all soon, to everyone’s mutual growth. Bye everyone.

Download this Episode

Aug 6, 2019

How does an aggressively-minded property management company grow quickly? Leads. But it’s impossible for property managers to pursue the blue ocean of 70% self-managed landlords. There's no way to contact them. Until now.

Today, I am talking to Ben Atkin of DoorsUp, a lead generation service for property management entrepreneurs.

You’ll Learn...

[02:30] Ben’s Background: Grew up surrounded by real estate, property management, and software.

[03:09] 50-unit Student Housing Apartment Complex: Managing students is difficult; Ben moved on to something less stressful and more lucrative.

[03:40] Bootstrap to the Core: Partnered with Coldwell Banker Premier and started property management company from scratch.

[04:10] Daily Pre-occupation: How do you grow doors? How do you increase the number of units under management?

[04:41] Database: How do you identify people who own rental property? Where do they hangout? How do you contact them?

[05:03] DoorsUp Prototype: Every person in market who owns rental properties and their contact information to track interactions and engagement.

[06:20] Secret Sauce: DoorsUp gets information and people ready to sign-up.

[07:37] Grow Doors: Use DoorsUp to pick an area to pursue to contact owners and acquire more properties to manage.

[14:20] Future for DoorsUp: Going to NARPM to add service areas.

[16:27] FAQ: Does this have all the data that I can find myself? Data is concise, filtered, and updated regularly to make your marketing more efficient and cost-effective.

[21:14] Bogged Down and Overwhelmed: Grew too fast and doesn’t want to be a property manager!

[22:15] My Thesis: Property management has a serious marketing problem. People cannot find a sustainable way to grow doors.

Tweetables

Bootstrap to the Core: Zero clients, zero connections, zero revenue, and zero Website.

We have a lot of data. Mining and handling data is our expertise.

We’re marketing strategy agnostic.

Property management has a serious marketing problem.

Resources

Ben Atkin's Personal Email

DoorsUp

Ben Atkin on LinkedIn

Google Street View

Grant Cardone

National Association of Residential Property Managers (NARPM)

Business Network International (BNI)

Cole Realty Resource

SmartZip

REDX

DGS 89: Strategic Social Media Marketing with Katie Lance of Katie Lance Consulting 0

Transcript

Ben: Thanks, Jason. It's a pleasure to be on the show. I'm just going to go ahead and say this and geek out out of the way. I've watched literally every single one of your podcast and I can jive so much with that intro. It seems like it's changed a little bit in the last. Did I notice that? You changed that intro to include a couple more things recently?

Jason: I have made some subtle changes, yes.

Ben: Subtle changes, okay. I love that. I'm really excited to be on this show. I'm just stoked to be here.

Jason: Let's get into your background. You've got this startup called DoorsUp, which in my understanding is a lead gen service for property management entrepreneurs, so they can get more owners which sounds very in alignment with what we do to optimize companies so they can handle those leads, so they can effectively, organically, create that business. Tell us how did you get into this space? Give us some background on Ben. Who the heck are you?

Ben: Yeah. It's a long long road. I'm a second generation real estate person as well as second generation software developer and software person. My dad has a real estate company, was a real estate developer. The most inopportune time to be a real estate developer in 2006-2007. I grew up surrounded by real estates, surrounded by property management, and also surrounded by software.

Anyway, I got my start in actually having experiences in property management in college. I was managing a 50-unit student housing apartment complex. If anybody is familiar with student housing, they know that that is just a difficult job to manage students. 50 units is about 250 leases in student housing. I was looking for something a little bit more lucrative and a little less stressful. I found an opportunity in my local market with a Coldwell Banker property management franchise or Coldwell Banker Premier, partnered with that franchise, and started with a property management company from scratch. Zero clients, zero connections, zero revenue, and zero website—nothing; we just started from the ground.

Jason: Bootstrap.

Ben: Bootstrap. Yeah, absolute to the core. I have very little experience in property management at that time even though I did my best at pretending that I did. That was our major problem was how do you grow doors? How do you increase the number of units under management? That was my preoccupation daily because I wasn't being paid. You talk about bootstrap, I was living on savings trying to grow a property management company. That was my challenge. That was my problem.

I remember speaking to my broker at this franchise. I waited at his office for about an hour. I was brainstorming with him. I said, "How do you identify people who own rental property? Where do they hangout?" It's not like there's this big database of everybody who owns rental property and a way to contact them. That's really was the impetus for what we developed and what we started to pursue.

I leveraged a little bit of my connection with my dad and my brothers who were software engineers, I have a software engineering background a little bit, and we built the prototype of DoorsUp, which is exactly that. It's a database of every person in your market virtually who owns rental properties. A way to get their phone number, mailing address, and a way to track their interactions with them as you pursue them to engage with the property management services.

Jason: I love it. It sounds like this is almost the equivalent of somebody doing all the manual work to go and find an owner occupied list, then start trying to direct mail to them, and doing all this so manually which works, which can work great to help them grow their business. But it’s a long game. People will try it once and feel like, "I did a mailer, I didn't get anything." But then I hear people that have played this game and they’ll say, "I have clients walk in all the time." They're holding a postcard they did 10 years ago and saying, "Hey, I'm ready, so sign up." Explain how this works. Where are you getting the information? Let's start there.

Ben: Sure. I'm going to mention that it's a little bit part of our secret sauce. I don't know if I consider ourselves a big data company. That's kind of a word that people on software throw around to make themselves sound cool, in my opinion. But we have a lot of data. Hundreds of sources, public sources, that's really our expertise is in managing and handling data to be able to target these types of people.

Like what you mentioned, let me just make this quick point, mailing to absentee owners is, in some ways, inefficient. How many second home owners who aren't interested in property management are you mailing to? In a market like mine where it's a lot of retirees and it's almost a vacation area, that would be completely ineffective because you'd sent out a thousand mailers and 700 of those would go to people who really have no interest or their daughters' living in that home or whatever. I'm just going to make that point that what we're doing is quite a bit more targeted, and hopefully, should save on expenses, marketing wise and other things.

Jason: Explain how somebody could utilize the system growth in their business.

Ben: It's a web based application. The first thing that a user would see as they login is they would see a map and filters on the side. They can pick an area that they like to pursue in trying to acquire more properties to manage. Let's say, they've got a neighborhood that they really love, they draw a box on the map, and then they add a couple more filters. Maybe they want to manage only properties that are the 2000s and newer properties, so they don't have to deal with maintenance issues. They hit filter parcels. They'll just see a whole bunch of pins drop on the map, hundreds of pins of rental properties that are algorithms, are big data approach as identified as rental properties. Not just as absentees parcels, but as rental properties. It's really rigorous in deciding what we display as rentals.

That's the first step. They filter, they find the rental properties, they can view the properties from the street with Google Street View through our application. It's very easy to see if the property's run down. They can actually look at it from the satellite imagery. They click on the owners name and they click the lookup button. Our system does a whole bunch of secret sauce magic in the background, gives you a phone number, and the accurate mailing address of the owner. As well as information about if they own other rentals. That type of information that they can then pursue that person and try to engage them into a conversation about their property management services. That's the simplest way to explain it.

Jason: They sign up for your service, they markout their geographic area, they get some pintabs, they can street view the property, then your system will crawl the magical interweb, pull in phone numbers, email addresses, or mailing address. Then the next step for them would basically, probably be to do some sort of a direct mail campaign, cold calling.

Ben: Yeah. We're agnostic to whatever marketing strategy they want to take. We provide the information, we provide the data. They can be as creative as they need to in order to pursue that market. Call, mail, we don't have email addresses, that would be something that they get them on the phone and ask for an email address. Then start them in their sales funnel.

A great way to distribute their content, things that you've helped them create, or others who've helped them create, or even knocking on people's doors. That sounds ridiculous in my mind; it sounds ridiculously inefficient. But if you knew that someone had 10 rental properties and those rentals properties were exactly what you wanted to manage, you can see exactly where the homeowner or where the landlord lives or where the rental owner lives, it might be worth dropping off some fudge at the doorstep of their home. That sounds ridiculous, but that's actually something that one of our [...] has done in the past. It's very differentiating as opposed to just this search engine optimization, pay-per-click strategy. It's a little bit closer to a human connection.

Jason: Oh, yeah. Realtors still knock doors. Realtors still do this. Property managers have probably really tried to avoid doing that. I've got a client who's in commercial property management. One of the ways he would get clients is he would go bring a candle to their place. "I'm old fashioned here, so here's this candle." He would give a gift, a little gift. The secret is, he'll buy these at the dollar store. This isn't like an expensive thing. But some people are showing up with, I don't know, a bottle of wine or something. It's a dollar of candle and it probably meant something, it felt like something warm to them. I think it's all about connection.

Obviously, if they were really aggressive, they’ve listened to Grant Cardone's 10X, they're like gunho. They wanted to create some business. They just need the opportunities. They go into the system. They may have done a multichannel approach. They're like, "This is my dream list right here. I'm going to call them. I'm going to send them some material. I'm going to nail them on a regular basis. I'm going to go knock on their door." They will get the business.

Ben: Here's the thing, like I said, we're marketing strategy agnostic. People are already doing wonderful things to get more doors. They're doing great things. They're setting up landlords seminars, they've got great content, they're trying to push them to these distribution channels, but one of the things that we can provide is a way to reach more and more people. As part of your mailer, send out an invitation to your seminar. It fits really well into the things that people are already doing. If you've got a digital marketing strategy, get somebody on the phone, and say, "We would love to just send you an information in an email about what we do." Just enroll them in an email nurturing campaign that you've already developed, that you've already got going. It seems like organic traffic is a little bit harder to get in our industry for the smaller guys and for some of the companies that are just starting out. They've got to put a little bit of effort into it to start getting those doors, getting the traction that they've got.

Jason: Yeah. If we've got roughly 70% that are self-managing in the industry, there's tons of blue ocean. This just helps you to see where the fish are. If you can see them, you can go hunt. It's time. Love the idea. I think this is such a nice match-up between DoorGrow and what you do. I'll be really curious to give feedback to some of our clients on some of the strategies that we teach them if they have these opportunities that they can go after. It's really going to be cool. Ben, what’s sort of the future for DoorsUp?

Ben: Yeah, good question. Like you mentioned in the beginning, we're very recently coming out of stealth mode or development mode. We launched just short of a month and a half ago. We’re constrained geographically right now where we can service. Having just barely launched, we are currently servicing customers in Utah and Nevada. I live in Utah, I live right in between Las Vegas and South Lake City, which are two large markets that we wanted to initially, prove the concept of the product and establish a customer base. We are going to be in NARPM, at the NARPM convention conference in October in Arizona. Is that right? It's in Arizona.

Jason: Yeah. My assistant schedules it all for me. I just do what she tells me to do. I'll be there.

Ben: We'll be there and that's where we hope to add, geographically, another service area. We're going to be growing that way, kind of state by state as we go. That will be determined by the traction we're able to get in different states that we're able to start servicing. If we can grab a couple of customers in one state, that would be enticing enough for us to go through that state and start servicing that area.

There's an advantage for our customers right now. They're alone in these sea of data. They're the only people using it. That's a huge competitive advantage right now for the people using it, to be some of the first ones that are using it. As much as we're just coming out of beta and the user interface is not as polished as it should be or could be, but there's a huge advantage for those that are early customers that are starting to use the system and see some results.

Jason: What are some of the most common questions that people are asking you about this? I would imagine one question that comes to mind is, "Does this have all the data that I can go find myself?" Or is it missing that?

Ben: Right, good question. Essentially, people ask that question. They have a little bit of misunderstanding about what we do. That was an instinct that you had right at the beginning of our conversation is, it's similar to what people are doing which is they're going out sourcing their own data, sending out mail, or sending out stuff like that. That's a very rudimentary version of what we do. The answer to that question is, I guess, the data is so concise, so aggressively filtered, that makes your marketing very efficient, and enables you to do certain things that you never would have time or money to do otherwise.

Now, campaign is being an excellent example. The sales cycle for property management is so long. We're not selling toothbrushes. If you ask somebody, "Hey, you want to buy this toothbrush?" They can say, "Yes," and it's done; the sale is done and the service is done. Property management has such a long sales cycle where you get somebody on the phone and you say, "I would love to manage your units." And they say, "Well, it's got a 12-18 month lease on it. I'm not interested unless it's vacant. 12 months from now, call me." I'm being able to keep track on that and being able to keep track of how many times you've mailed to somebody is another really important part of that process. It's integrated into the system right now. People are able to track their leads, they're able to keep track of how many times they've mailed to somebody, keep notes on phone calls that they've had.

The other aspect of that is that the data updates. I don't know if you've ever spoken to somebody who has actually tried to implement a long-term mail campaign, but the data, six months out, has changed. People buy properties, they sell property. How do they correlate whether they've mailed to somebody already? Whether they've called somebody already? How do they just track that change over time to be able to spend their time with one person long enough for them to close them given that property management has such a long sales cycle? That's part of the advantage of using a system like ours to do your prospecting and data sourcing. We keep it up to date. The data is updated monthly. The phone numbers, you click the lookup button and it does lookup immediately right then. Very, very fresh data which you're not going to be able to find yourself.

Who has time for that anyway? You're going to be managing 200 properties and you're going to be spending time in a big Excel spreadsheet trying to correlate [...]. Absolutely not. I saw as a huge way to be much more effective and to really spend my money where it's going to make the most effect, given that I knew that people have multiple units, and they were units I wanted to manage. I can pursue the market that I want rather than shotgunning a mail campaign or something out in the world and seeing if I got anything I wanted.

Jason: Tell us a little bit about some of the early adopters. What sort of experience have they had? Is there a case study or an example you can share with us?

Ben: I'll start with myself. I was the first case study. If we go back to that origin story of DoorsUp, I asked my broker, "Where do I find these people?" He said, "I have no idea. No one has any idea." We developed this raw prototype of the system. I got this report. It's so embarrassing to even look at now, it’s this ugly Excel spreadsheet, but it was our prototype. It was the name, phone number, and address of every person in my market who owned rental property. How many rentals they owned, the value of their portfolio, and the addresses of all of their rentals. It was ridiculous to me. To me, it felt like magic.

I got straight down and called through that list. After wasting three months getting four or five units, in two months, we were managing about 45 units. I was just bogged down. It was crazy. We grew too fast. I discovered that I didn't want to be a property manager, so I went into software.

Jason: Yeah. A lot of people were like, "Why don't you do it, Jason?" I'm like, "Then I can't help everybody else do well." Then, I'll be competing with everybody. I don't think anybody wants that. You're no longer doing that, but you had a really rapid growth initially. I love creating that problem for clients, by the way. I love when they come to me and they're like, "Man, my biggest problem is adding doors and getting doors." Then I say, "Great. Let's get you to problem number two which is how you deal with the growth. Now, you've got doors coming in and you're in pain because you have so much growth." I love creating that problem.

Well, anything else they should know about this? If not, how can they get in touch? How can they find out more about DoorsUp?

Ben: Yeah. I guess, I'll end with this thought, this is kind of the thesis behind DoorsUp. This is why we got into this space and try to solve this problem. My thesis is, essentially, that property management has a serious marketing problem. I listen to your show a lot and I feel like I didn't steal that idea from you—I sure hope I didn't—but you've taught me a lot about that, but I experienced that myself. People cannot find a sustainable, reliable way, to grow their door count. Profitability aside, that's important. That's very, very important, but top line revenue growth is the thing that we are focusing on helping people to.

We don't have, in our industry, any sort of enabling data or service or company like other industries do. For example, if somebody in property management really wanted to spend all day everyday prospecting, if they wanted to do Grant Cardone 10X, they want to not talk to seven new landlords a week, they want to talk to 75 new landlords a week. How would they do that? They would go to Rotary Club and hope that a landlord was there. They would go to BNI, Business Network International, and hope that a landlord is there. Or they'll take a realtor to lunch and pray that he'll give him a referral. How does an aggressively-minded property management company grow quickly? They just need these leads.

Whereas in real estate sales, real estate sales and other industries, we've got Cole Realty Resource, we've got SmartZip, we've got the REDX. We've got all these prospecting tools. Property management industry just does not have that, which has made it impossible for property managers to pursue this blue ocean, 70% of self-managed landlords. There's no way for them to contact them. They have no visibility into that market.

Just from a very macro perspective, that's what we're trying to provide the industry. To be able to turn the focus from just closing hand razors, people who go on Google and raise their hands and say, "We want your service," to be able to aggressively pursue that market instead of just waiting for leads to come to them. That's what we see. That's my thesis is that there's a problem in property management that they need this data and we can provide it. We're still proving and testing that thesis. But we're very excited to get out there and be able to offer that to people. We've seen some success.

If people want to contact me, there are plenty of ways on our website. You can go ahead and email me. My personal email address is ben.r.atkin@gmail.com. That's probably the easiest way to reach out to me personally. Though, I'm also tuned in on the website if you chat with us. It'll be an actual person who answers that. If you're in Utah and Nevada, go online, signup for a free trial. We’d love to have you start using the system. We do a two-week, 30 lead, free trial. Other than that, just reach out to me. I'd love to chat about it, and jive about property management, and see if we can help this industry grow from the 30% penetration to 40% or 50% or 60%. I see there needs to be some sort of change in order to be able to do that.

Jason: Cool. Ben, where are you based out of?

Ben: I'm in St. George, Utah. Just an hour North of Las Vegas, Nevada.

Jason: Got it. I know where it is. I was born in Utah. Alright. We'll connect, I think that I have a lot of clients are at the point where they're ready to be able to leverage their service like this. I think a lot of property managers are not. I think a lot of them really are just not ready to leverage something like this, unfortunately. If that's the case, reach out to DoorGrow. Then they'll see if you're ready. "You're ready. You have the bandwidth to do these kind of things and grow your business. Let's get you connected to DoorsUp." I look forward to watching what you guys do, seeing the progress, and growth of your company.

Ben: Thanks, it's a pleasure.

Jason: Thanks for coming in this show.

Ben: Hopefully, we'll see you at NARPM. Anybody else, hopefully, we'll see in there. Thanks!

Jason: Alright. Very cool. If you are a property management entrepreneur, and you are wanting to grow your business, and you want to grow without SEO, without pay-per-click, without content marketing, without social media marketing, without uncomfortable videos, without pay-per-lead services, and they're having phenomenal growth, they're easily adding in a year 100 doors to their business, they're adding $100,000 in revenue to their business annually and you want to do that, maybe you're one of these companies that, right now, is losing more doors than you're getting on right now because it's difficult to try to outpace the market when doors are selling off because the market's good with marketing then reach out to DoorGrow. Let's optimize your business, let's get you ready to use a service like this, and some other strategies, and tactics that we have, that can help you grow your business. Check us out at doorgrow.com. We would love to help you out.

We want, like what I say in the intro, we want to impact this industry, and we're excited to find like-minded entrepreneurs like Ben and others that are helping to make this industry great. I think it has massive potential. I believe that property management industry can be as big as the real estate industry; I think it has the potential to really grow here in the US. Let's make that happen, everybody.

Make sure, if you're a property management entrepreneur, you join our Facebook group doorgrowclub.com. Get inside the community. Connect with us. This is a group for property management business owners. Get with your tribe. Connect with us, and we'll probably see you in person at some of these NARPM events because I'm hitting as many as I can lately. Hopefully, I'll be connecting with you guys in person and inside the DoorGrow Club.

Thanks everybody for tuning in to DoorGrow Show. Until next time, to our mutual growth. Bye, everyone.

Download this Episode

Jul 30, 2019

Have no fear, when it comes to social media. Share your opinions and what you know. Not everyone will like what you post, but that’s ok. Personal and professional Social media opportunities let you connect with others, build relationships, and post content to attract new business.

Today, I am talking to Katie Lance, CEO and co-founder of Katie Lance Consulting. She helps real estate agents and brokers use social media to grow their businesses. Also, Katie is the author of #GetSocialSmart and founder of #GetSocialSmart Academy. She was named one of the most 100 influential people in real estate by Inman News and is a frequent contributor to The Huffington Post.

You’ll Learn...

[02:40] Marketing Nerd: Katie didn't go to school for social media because there was no Facebook when she was in college.

[06:40] Social Media Challenge: Audience doesn’t care about property management.

[07:32] Don’t be Vanilla: Be engaging, interesting, unique, and authentic voice for what’s happening in your industry and market.

[10:08] Love vs. Hate: Share your opinions, and attract your tribe through polarity.

[12:20] People don’t buy what you do (property management), but why you do it.

[13:18] Warning: Don’t outsource all your social media, or you’ll lose your voice.

[15:59] Avoid anxiety and conquer fear of social media by creating a system or strategy.

[17:27] Day-in-the-Life of You: Done is better than perfect.

[22:05] Consistency and Batch Creating Content: The more you do it, the more comfortable you get.

[26:21] Repurposing Content: One piece can be posted on multiple platforms.

[27:15] Platform of Choice: Depends on your target audience.

[28:40] Future of Social Media: Instagram TV and video is where it’s at.

[31:54] Personal and Professional Social Media Opportunities: Connect with others, build relationships, and post content to attract new business.

Tweetables

Be you, instead of your business on social media.

Done is better than perfect.

Comment, Connect, and Create Content

Don’t suffer from analysis paralysis.

Resources

Katie Lance Consulting

Katie Lance on Instagram

Katie Lance on Facebook

#GetSocialSmart

#GetSocialSmart Academy

Inman News

The Huffington Post

Simon Sinek

National Association of Residential Property Managers (NARPM)

Instagram TV

TikTok

DGS 88: Managing Tenants More Effectively with Dave Spooner of Innago 0

Transcript

Katie: Hi, Jason. Thanks for having me here today.

Jason: I am glad to have you. Katie, we’re going to be so social today.

Katie: That would be a lot of fun.

Jason: [...] social media and we're on social media right now. We're doing it. Katie, help everybody understand your background. Can I read some of your bio?

Katie: Sure, go ahead.

Jason: It’s really well written. Katie is the CEO and co-founder of Katie Lance Consulting. Katie is a nationally known keynote speaker at conferences and events. For the past 10 years, Katie has been working with real estate agents and brokers to help them get smarter about how to use social media to grow their business. Her specialty is in helping real estate agents and brokers achieve big results using social media without spending a ton of time.

She is also the author of the best-selling book, #GetSocialSmart and the founder of #GetSocialSmart Academy. Katie has been named one of the most 100 influential people in real estate by Inman News and is a frequent contributor to The Huffington Post. She lives in the San Francisco Bay Area with her husband and two beautiful boys.

Katie, welcome to the show. Tell us how did you get into social media? How did this come about for you?

Katie: I’ve always loved social media. I've always been a marketing nerd. I’ve always been one of those people to just really love marketing and didn't necessarily go to school for social media, and probably dating myself, but there was no Facebook when I was in college. I fell in love with social media and probably about 10 or 12 years ago.

I got my first job in real estate. I was hired as a marketing director for a local real estate company and that was really when social media was starting to come to the forefront. I just remember having this epiphany and thinking this is so perfect for real estate. I had seen so many agents and brokers spending so much money on traditional marketing, which, a lot of it still works. I don't necessarily think social media replaces traditional marketing, if that's working for you, but it can be so expensive. And I thought, what a great opportunity.

That's really where I fell in love with it. I worked at that real estate company for a while, then I went to work for In The News for quite some time, ran their social media, and grew their social presence. Then about 2012 I decided, “You know? I'm going to go out on my own,” and got that entrepreneurial bug and haven't looked back since. It's been quite a journey.

Jason: What caused you to take that leap? It's a risky leap. To preface this, I didn't realize I was an entrepreneur. Even though I was the guy that started a band in college, created big events, going door-to-door pre-selling CDs so I could pay for an album at college girls dorms with a guitar and a clipboard, I didn’t realize I was an entrepreneur. I thought I needed a job, but what pushed me over the edge to jump into entrepreneurism was a divorce and needing to take care and wanting to have time with my kids. Out of necessity, I had to do it.

What caused you to take the leap? That's a pretty big leap. People don’t just go, “I've got a job that’s going pretty well. I’m just going to throw it to the wind and go do something on my own.”

Katie: I think there’s a couple of things. I’ve always had an entrepreneurial spirit. Any job I've ever had, I've always treated it as if it were my company. It was always very hard for me to just “work a 9–5 and turn the off button off.” I guess I always had that attitude for anywhere I've ever worked and I had a great job [...]. I've worked there for many years and for a lot of people, you get to a point in your career where you have that itchy feeling, like what's that next thing.

Jason: Something more.

Katie: Yeah, there's something more and quietly started to explore other options. It just became really clear to me that I don't necessarily want to work for anyone else. I want to work for myself and I want to be able to help not just one company but lots of different people, lots of different companies, lots of different organizations. And it was scary. It's a whole another ballgame.

I'm happily married, we have mortgage, we have kids, so it's not necessarily the easiest leap. The hardest part was just making that decision. Then you make the decision and it was pretty much smooth sailing from there. I also had a really supportive husband, which makes a big difference, too.

Jason: I was going to ask about that. If a spouse is not in support as an entrepreneur, there's a lot of friction, right?

Katie: Yes.

Jason: And a lot of times as entrepreneurs, we tend to pair up with people that want safety and certainty. They're our balance and our opposite.

Katie: Yes. Actually, he ended up quitting his corporate job about 2½ years ago, so now we run our company side-by-side and it's been a great journey.

Jason: So you converted him?

Katie: I think I did, yes.

Jason: [...] to a job, right?

Katie: Yes.

Jason: Perfect, love it. Let's get into the topic at hand, which is how people can grow social media. I tend to be upfront and honest. A lot of my listeners have heard me say, probably at different times, that the challenge that property managers face with social media is that their target audience does not care about property management.

They don't care at all and when they ask me, “Should I spend a bunch of time and energy doing social media?” my general response is, “How much time are you spending time following and listening to plumbers? Plumbers want your business. They want your attention. Why aren't you subscribing to their newsletters and following them on social media?” and they're like, “Because I don't care about plumbing.” I’m like, “Your audience don't care about property management.” What should they be doing? I'm excited to get into this.

Katie: I think social media is relevant for obviously a lot of business owners, a lot of entrepreneurs and whether you're in property management or you're a plumber or whatever business you're in, that is the default response. “Well, who really cares? Is this really interesting to a lot of people?”

At the end of the day, one of the ways to get traction on social media is to be that unique voice, that authentic voice of what's happening in your industry, what's happening in the market. People tend to follow you and engage with you, not necessarily for just facts and information that you're spewing out there, but because they connect with who you are and your personality.

It's amazing about the management or real estate, and a lot of it's so done through word-of-mouth. A lot of it is still done through those connections that we make. That's what I think there's a lot of value in social media. It's funny you mentioned plumbers because there's actually a plumber who's killing it on YouTube, because of exactly what you said, because most people don't think like, “Oh, who's going to put out that type of content?” But his content is engaging, it's interesting, it's valuable, but it's also with his voice.

That's the thing that property management. You could talk about renting or whoever and all these different topics when it comes to property management. But you can insert your own opinion, your voice and not be afraid to just be really truly who you are. Some people won’t like it and that’s okay. Those aren’t your people.

Jason: I’m going to rephrase what you just said and sum it up. It's more important on social media to be you than to be your business.

Katie: Absolutely.

Jason: That's really what's going to attract and get people to resonate and connect with you as if you're willing to put it out there and be you, weirdness and all, and that's something. People follow me on social media, no. I'm putting out random stuff all the time about my life and who I am, and I figure that some people are just not gonna like me.

Katie: Yeah, and that’s okay.

Jason: There are definitely people that don’t like me.

Katie: Sometimes, we try to want to be really professional and we don't offend anybody. I'm certainly not saying start offending people on social media. But there's that risk of becoming just really vanilla and really boring. If you think about as an end user, somebody uses Facebook or Instagram, what do you click like on? What do you comment on? What do you share? Typically, it's things that are funny, or poignant, or interesting, or they move you in some emotion, you get angry.

There's nothing wrong with having an opinion. That's where I think in real estate and property management, really for any entrepreneur, that's where the magic is because most people are not putting up that type of content. If they are, they're not doing it on a consistent basis. That's a big thing that can make a huge difference.

Jason: People should have an opinion and share their opinion on Facebook and let their freak flag fly, right?

Katie: Yes, and be comfortable with the fact when you do that, there’s going to be people that watch you and say, I don’t like that guy or girl. You have to be okay with that because with the opposite, which will happen, is that you will start to attract the people who go, “I really like that guy. He's doing a podcast? What other podcasts? I got to catch up on all of his podcast episodes.” That's what happens with video. When you start putting out especially episodic video or episodic podcast content, people start defining you. They’re like, “What else does she put out there?” and you search who attract your tribe. That's what can turn to business down the road. It just takes time just like anything else.

Jason: I’ve always thought this is very in align with what I think and feel, is that if you are not creating polarity, if there's no polarity, then you can’t be attractive. A magnet without polarity is not a magnet anymore. It's not attract anything. Nothing will be pulled towards it. Electricity without polarity doesn't exist anymore if you remove the polarity. There has to be polarity and that means you have to be willing to polarize someone there.

I've probably been a little too polarizing in some instances; let's be honest. But I've noticed that when you are willing to just be you and polarize and put it out there, yes, you're going to have people that don't like you. You’re going to get flack for that, people are not going to attract you, but you now are attracting the right people. You’re attracting people that like you the way that you are. They like the way you communicate, they like the way that you coach, they like the way that you run your business, they like your philosophy.

Just like Simon Sinek said, “People don't buy what you do.” They don't buy what you do. They don’t buy property management, they don’t property management coaching/consulting from me, they don't buy what you do, they don't buy social media, whatever from you. They really buy why we do it. That's really what they're buying into is they believe in Katie, they believe in Jason, they believe in the property manager, they believe in you and they share values. What you do is really an afterthought compared to that. So, they need to create polarity.

This is a great question everybody listening can ask is am I creating polarity? Have I offended anybody in the last month? And have I attracted anybody in the last month? Did anybody say, “Hell yes, I agree to that,” or, “That totally rubs me the wrong way,” but that's you, so thanks for sharing.

Katie: Absolutely.

Jason: We don't want to be vanillas. What’s maybe the next thing that we should take away?

Katie: Like I said, don't be vanilla. I've often said, “Lean into who you are and who you're not.” It goes hand in hand with that idea of not being vanilla. I also think a big part of your social media strategy is not outsourcing it completely. There's this feeling even still in 2019 of, “Oh, my gosh. I don’t have time to do this. It's one more thing. Who can I hire to do it?” It's a little bit of a slippery slope because I do think that there's value in hiring certain people. For example, we have a video editor on our team because my value is being on camera but I don't need to learn video editing, I really don't need it. For one or two, that's fine, but I don't have desire.

Jason: That’s not your dream and goal in life is to edit videos and stare at videos on the screen for hours a day.

Katie: Exactly, it’s not my dream. I’d rather put my eye out, honestly.

Jason: Me neither.

Katie: Similar with podcast. My value is in the content and the education I can bring, not necessarily in can I edit something. I think there's value in bringing at some point, maybe not in the beginning, people on who could help you with either editing, for example video or podcast editing, or copywriting if you enjoy writing, or something as a blogger or graphic designer, but to totally hand out who are personally is really risky and there's lots of businesses out there that are selling this idea. “You're too busy. Let us do it for you.” I would just caution anyone to be just be careful when you do that because you're handing off who you are. It's like having a dinner party with your 10 most important clients, and instead of you being there, you have your assistant run the whole thing.

I just think it's a basic tip, but it's also something that is important to address because time is all we have. It's our most precious asset. I don't think you need to spend all day on social media. I'm in the business of social media and I'm certainly not on social media all day long, but it comes down to having a smart system, and making sure you're inserting yourself and your personality into what you do. I think that's really valuable.

Jason: This makes a lot of sense. I think there's so many parallels to this. There's so many situations in which we would not outsource. I wouldn't outsource to somebody to be the dad of my kids. I'm really single again after two decades, so I wouldn't outsource somebody else to use swiping on dating apps for me. They just don’t know what I’m into.

There's a lot of things we just should not outsource. And yet, being the face of our business, we will a lot of times as business owners, want to just outsource that, like some company can just come in and post a bunch of memes and garbage, and we're suddenly going to get business from it and then we wonder why it's not working.

What about those business owners that are not charismatic, they don't have personality, they're better behind the scenes, they just feel really awkward putting anything out there. How do you deal with that? Some of the listeners avoid social media. Social is like an anxiety-inducing word to them.

Katie: For a lot of people who are anxious or feel a little overwhelmed with social media, I would imagine part of it is because you don't have a system for, and it feels like this thing that's out there, that you have to do, that you don't really know how to do it right, and everybody saying that you have to do it, but you don't really have a plan. It just becomes sort of the snowball. The thing is, anytime you're trying something new, especially with technology, it can feel ridiculously annoying. You feel like, “Oh, my God. What am I? How do I not know how to do this?” and it's just like anything else.

We work with a lot of agents and brokers. I always say, “Imagine when you first got your real estate license. You took the test, you went through the courses, but you didn't really know what you're doing until you had your first client. And then you really learn. And then you learn again and again and again.” Part of it is just getting over and putting yourself out there. Sometimes we're so concerned with who am I, who cares what people think, I don't know, I don't like how I look or how I sound, I don't know how to do it, so I’m not going to do it. I always like to say, “Done is better than perfect.”

Jason: Oh, my gosh. I [...] that, too. I love that.

Katie: I’d love to say I made that up. I did not make that up. I’ve heard it somewhere and probably from you.

Jason: Maybe not. I think I got it from my business coach. I’m sure he got it from somewhere, too.

Katie: You just start today. So if you’re listening to this, start today. Go on Facebook and connect with three or four people at Facebook today. Don’t just like a bunch of stuff, but go on engage with a few people. Wish somebody a happy birthday. Start today. Then you can move on from there.

Part of it is just getting a system together, getting a process together. One quick thing I'll mention real fast for anyone who's feeling a little bit overwhelmed, I would encourage you to think about all the things that you do on a day-to-day basis, all the questions you get asked, all the topics of conversation that come up. Get a notebook, get a pen, and just start brainstorming things that happen a day in the life of you. I would imagine you're going to come up with 10, 20, 30 different topics of things that you could potentially talk about, whether that's through video or on Facebook or whatever it might be. Just go to start. “Just do it,” like Nike says.

Jason: I love the concept of done is better than perfect. I put that because a lot of times we're trying to get clients to launch their websites, we're trying to get them to take action and moving themselves forward on different things, and they just stay analyze really hard about something and they want it to be so perfect. I just iterate over and over again, done is better than perfect because once it's done, it can do its job in making money. You can go back and change it later, you can improve it later, but get something done because until you have something there, until you have the website up, or until you have this launch, or until you've done something, it's nothing to do anything for you.

The other mantra that I'll share with everybody listening, if you're in that state of overwhelm, you’re feeling scared, whatever, just remember that that's how you start everything. One of my favorite mantras is, we all start at level suck. That's where you start in everything. You start at level suck. That is the level you started everything. My first YouTube video was two minutes long and had 30 uhms and and so's in it, and I had to edit them out. The video looked choppy and it was awful. It was so awful. I tried to get perfect lighting, I have my little mic clip thing, an uncomfortable shirt with a collar, and I was trying to be what I thought I needed to be in order to do a video and look good. I'd probably spent hours making a two-minute video. Here's the ironic thing for everybody listening. You think it has to be so perfect? I've made way more money by doing really crappy, shaky, jittery, selfie style videos, walking around outside, than any of those videos were I was uncomfortable behind a desk or in a shirt or whatever in front of a whiteboard.

Don't think it has to be perfect. People will crave reality nowadays because there's so much BS. They’re really craving reality. The other thing I point out to clients, is that they are talking to people all day, every day and it's really the same thing. You just look at a device and pretend you're talking to a person, you just say exactly what you would say and talk the same way. You don't have to think, “What am I going to do with my hands?” What do you do with your hands normally when you talk to people? “How’s my face supposed to like?” How does your face normally look? Just talk. You have the thing like you're talking to a person. So, just start noticing when you're talking to people and pretend they're a camera or a phone and just realize they're not that scary or awkward.

Katie: Absolutely. To your point, it doesn't have to be perfect. What a lot of people don't realize that maybe they forget is the lifetime of a post is pretty short. Let’s say you create a video, you put it on Facebook, that video will disappear in a couple hours. You put it on Twitter, tweet disappears in a matter of seconds. YouTube has a longer shelf life and certain content certainly has a longer shelf life. But generally speaking, we live in a world with so much noise, I often feel like I'm standing on the side of the freeway just watching cars fly by.

If it's not your best performance, it doesn't have to be Oscar-worthy. As you said, just get it out there and especially with video, it's like a muscle. I will say the more you do it, the more comfortable you get. I don't know if I'm ever totally comfortable hearing myself and seeing myself, but what I am comfortable with are the results. That's what you have to think about. When you put yourself out there over the course of time consistently, that's when the magic happens. It's literally like a snowball and the consistency part is a huge part of it. Do you mind if I share a quick tip?

Jason: Go ahead. Give us all the tips you want to. We want some free Katie Lance Consulting right now.

Katie: Perfect. One of the things I always share with our GetSocialSmart Academy members is this idea of batch-creating your content. I love batch creating because for me, if I'm going to sit down, do my hair and makeup, and record one video, I might as well sit down and record four or five. We've been doing that the last couple years and that's made a huge difference. We'll set aside a couple hours once a month where I do the hair, get the camera set up, whatever. To be honest with you, the first 99 episodes were shot on my phone. So, it doesn't have to be anything fancy.

This idea of getting into a system and batch-creating your content, that way you're done, you're locked and loaded. When we do that, then we're able to drip out those episodes once a week for the next month, but it gets you into that rhythm. When you're publishing at the same day and time every single week, people who start to follow you, as we talked about earlier, they start to notice that. It's just like your favorite TV show, you may not watch your favorite TV show Thursday night at 9:00 PM or Monday at 8:00 PM, but you know it's on and you set your DVR. It's the same thing with content. Once you start to put it out there regularly, if you can start doing it consistently, it can make a big difference.

Jason: Absolutely. That's one of the reasons I really like my assistant; made this show finally somewhat consistent. We're getting about two episodes done a week now. Consistency is huge because as soon as you disappear for a week or two, people are wondering if you're gone. You lose the engagement, you lose the momentum, so done is better than perfect, but consistency is better than anything, really, probably.

Katie: People wonder what's the best day. There's no best day. What day is good for you? Just pick a day. I remember when I first started sending out and email newsletters, it’s like, “Well, let's do it on a Saturday. I don't know. That sounds like a good day.” Seven years later, we're still sending our email newsletters out on Saturday, and people are like, “Oh, I love it. Get it every Saturday morning.” It's just consistency. So, pick a day.

Jason: Love it. I love the idea of batching tasks, and you can apply that to so many different things. I just did a post on this on social media about this and I showed my pill case. I hate going and digging through all my supplement bottles every single meal, trying to figure out what I'm supposed to be taking. So, I got this pill case. It’s literally the size of a notebook. It's got every day of the week, four times a day, and I fill it once a week. If I travel I can take it with me. It's done, I can just take these supplements. That's how I'm able to be so sharp and so crazy all day long. No, I’m just kidding.

Batching tasks reduces the decision-making that has to go into and the thought that has to go into it every day. You don't have to sit there, stress out, and “What should I talk about today? Oh, my gosh. I need to do a post. I haven't done it for a couple days,” and thinking about it. I love the idea of batch the tasks and we've got a pile of them waiting. Even with this podcast, we've got several episodes in the can. We're releasing them to iTunes and dripping them out because we want to have a little bit of padding.

There's an advantage to having some things in the can, especially if you want to keep the consistency. What if you want to travel? I'm going to Austin this week to meet with my business coach. Next week, I'm going to Phoenix to talk to the NARPM Chapter in Phoenix. We’ll still be able to release some episodes while I'm gone.

Katie: That's awesome. What you're doing which is so smart is you're repurposing your content. We're streaming this live, it's getting shared on social media, but you're going to put it on YouTube, at some point, you're going to put it on iTunes. That's really where the magic can happen because instead of feeling like you have to post something every single day, why not invest in one great piece of content like this podcast you're creating.

That's what we try to do, too. It's one piece of great content, and then it can get sliced and diced a dozen different ways. You can turn it into an Instagram story or an Instagram post today and a post some two or three weeks, especially when you create content that's somewhat timeless. It's not just relevant on what's happening in the market, but it's going back to sharing things that are informative, that are really helping your audience, that have a voice, have an opinion, and that repurposing, there's a lot of magic in that.

Jason: Let's talk about platform then. How do people pick? Because they're like, “Should I be on Instagram? Should I be doing LinkedIn? Should I be doing Facebook? Should I be on Twitter?” What's your recommendation when people are like, “What platform should I be on?”

Katie: It depends on a couple things. Number one, where your audience is. Right now, typically, Facebook is still the number one platform for a lot of people in property management or real estate or even as an entrepreneur. But I also think that's changing as well. Instagram is growing by leaps and bounds. A lot of people have started to leave Facebook and go over to Instagram, even though Instagram is owned by Facebook, because Instagram is such an aspirational platform, lots of pretty pictures, there's not as many political posts and noise on Instagram right now. I think those are two big ones to watch.

I do think for LinkedIn, though, it's important to at least have your profile updated. Make sure that's up to date. LinkedIn is not as fun as Facebook or Instagram, but if you get googled or your company gets googled, typically, one of the first things that pops up is LinkedIn. Just making sure that's up to date, that's professional social network. Outside of LinkedIn, I do think Facebook and Instagram are two big platforms to connect with people, stay in touch with people, and then also to post relevant content and to repurpose some of the content you're creating.

Jason: What do you think is coming new in social media? I'm sure you're always paying attention. What do you think coming up that's hot, that probably the teenagers are using that we’ll eventually be using?

Katie: Good question. Snapchat was getting a lot of buzz a year or two ago, that a lot of folks in real estate were jumping on that. I think a lot of people realize it's still for the kids.

Jason: I think the Instagram stories and Facebook stories killed it.

Katie: I agree. I think a big opportunity right now is definitely Instagram. Instagram is spending a lot of money and resources for people to stay on their platform. Especially Instagram TV right now is a big opportunity. That launched about a year or two ago. It’s doing so-so and then Instagram made some really big changes pretty recently to Instagram TV.

When you're uploading a video to Instagram TV—if you don't know, you can upload a video up to 10 minutes—when you upload it to Instagram TV, you now share a one minute preview over to your newsfeed on Instagram, which shows up on your page, it shows up in your newsfeed, which is more likely that it shows up in the explore button.

We found that for whatever reason, Instagram wants you to spend more time on Instagram TV. Our posts on Instagram TV are getting a much higher reach, likes, and engagement than just about any of our other posts. As of right now, as of the recording this podcast, that's definitely one to watch. It just reinforces a lot of what we're talking about with video.

Jason: I will have to start doing those. When they started doing it, I was like, “This isn’t getting any attention,” but I have noticed, I have watched a few videos on Instagram, and I've hit that button that says, “Keep watching.”

Katie: Yeah, it definitely keeps you engaged. We used to just beginning a couple of hundred views on our videos and now we’re consistently getting thousands of views on our videos. It's nothing really different that we've done other than just be consistent with putting up that content, sharing it over to our news feed. I think, ultimately, video is worth that. If you’re not creating original video content in your business, you’re missing a really big opportunity.

Facebook even recently just came out over the last couple weeks and said, “Video has one of the highest rates in the Facebook newsfeed, original video content versus content that’s shared from somebody else.” If there was ever a time to get over, “How do I look?” or, “How do I sound?” or, “I have nothing to say,” now's the time to do it.

Jason: Just do it. Nike.

Katie: Just do it, yes.

Jason: I'll just throw this out there because somebody is going to mention it later. If they have teenagers, I think TikTok right now is the thing.

Katie: It is, yes.

Jason: My teenager’s really into this TikTok thing. I don't know if that will somehow eventually translate to business, but let’s see where it gets.

Katie: It might. It's fun to watch. It’s entertaining.

Jason: It’s like the new Vine. It’s ridiculous.

Katie: Exactly.

Jason: Any other tips or takeaways we can squeeze out of Katie Lance before we let you go?

Katie: If you are in real estate in any capacity or an entrepreneur, I really can't emphasize enough. There's two big opportunities with social. The personal side of it, being intentional, taking just 5 or 10 minutes a day to connect with people, wish people happy birthday, don’t just be a drive-by liker, actually be a person, connect. That relationship-building piece is so important. Then, that other piece is putting out new content, which is going to attract new business.

I just would encourage anybody who's listening to really think about it. I love using techniques like time blocking where you're setting aside time, a couple of times a week, maybe it's just 15 minute blocks of time, or a couple times a month, to really get a system together. If you think about the areas of your business you’re most successful in, most likely there's some sort of system or process. Whether or not you're working with us or anybody else, that's my biggest tip. Get the system, get a process together, and don't wait. Don't suffer from analysis paralysis. Just do it.

Jason: All right. Awesome. I love it. So, commenting and connecting, and then content and creation are things we need to build our social network, and we need to create social media. Two different things. Katie, if people are wanting to get a plan, get organized, figure this stuff out, be interesting, and learn social media, how can they get in touch with you?

Katie: The best way is through our website, people can go to katielance.com. We have a free content grid that anyone can sign up for. It's a great planning guide. So, if you're listening to this going, “Okay, I’m stuck when it comes to putting a system together,” you can download that content grid for free right on our website. We have hundreds of free resources on our website, as well. Of course, I'm Katie Lance kon just about every social media platform. You can find me on Instagram or Facebook also.

Jason: Awesome. Cool. And then anybody listening can also connect with me. I’m King Jason Hull on all social media. There we go, we were just very social, sharing ideas about social media. Katie, I really appreciate you coming on the show. Thanks for being here.

Katie: Thank you so much for having me.

Jason: Really cool. Check her out at katielance.com. If you are a property management entrepreneur that wants to add doors and make a difference, as I said in the intro, be sure to reach out, connect with DoorGrow, we would love to help you figure out how to grow your business. If you feel stuck or frustrated, you feel like you're trying to do a bunch of marketing, pay per click, SEO, content marketing, social media marketing, and it's not working for some reason. You may have some blind spots. We can help you organize, sort out those blind spots, and get some clarity on the business, to help you focus on the growth side of your business. We would love to help you do that.

If you want to see a big blind spot, you can start with a very public one, your website. Take our website quiz by going to doorgrow.com/quiz and grade your website. This will give you a letter grade for your website. Most websites fail going through this and this quiz will grade your website as to how effective it is at making your money, at creating conversions, at attracting leads. Go ahead and fill that out and then we'll be in touch with you.

Thanks everybody for tuning in to the DoorGrow Show. Until next time to our mutual growth. Bye, everyone.

Download this Episode

Jul 23, 2019

Are you tired of dorm food and want to avoid the mad rush of finding a place to live off campus before next semester? There’s got to be an easier way for students to rent houses and apartments. It’s a problem that many entrepreneurs have tried to solve.

Today, I am talking to Dave Spooner of Innago. There are few incentives for landlords to digitize their rentals. Landlord demand for a listing platform is low, but there definitely is high demand for better tools to effectively manage and communicate with tenants.

You’ll Learn...

[02:50] Tenant Management Software: Making landlords lives easier with online rental payments, tracking payments, basic accounting, lease signing, and tenant screening.

[04:14] Understanding Innago: Flexible, effective, simple, and intuitive software for landlords and property managers.

[06:05] Learning Curve: Competitors’ software requires expertise and certification.

[07:32] Who wants to waste time adopting ugly software?

[08:58 #1 Priority: Intuitiveness in software; speed is love language.

[10:20] Different portals for different people to be more productive.

[12:16] Find balance, and avoid too fast feature creep.

[13:14] Possible future integration with Zapier and other third-party tools?

[14:22] FAQs: Access permissions and pricing for landlords and tenants.

[17:25] Innago offers unique and unmatched level of support.

Tweetables

Innago software is flexible, effective, simple, and intuitive.

You shouldn't need a certification to use property management software.

Choose features that matter, and get the biggest bang for your buck.

Big believers in early success begets future success.

Resources

Jason Fried of Basecamp

DGS 62: Property Management Accounting with Taylor Hou

DGS 87: Strategies for Growth into Multiple Markets with Bryan Jenkins and Jonathan Cook of AHI Properties 0

Transcript

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

At DoorGrow, we are on a mission to transform property management businesses, and their owners. We want to transform the industry, eliminate the BS, build awareness, change 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 the show.

Today's guest, I'm hanging out here with Dave Spooner of Innago’s. Dave, welcome to the DoorGrow Show.

Dave: Hi Jason, thanks so much for having me.

Jason: It's great to have you. Dave, we always like to get into our guest first, help us understand who Dave is, and how you kind of got into the space that you're in, and give us a little background.

Dave: Yeah, absolutely, I'd be happy to, and thanks for the intro. I graduated from university in 2013. I kind of already had that entrepreneur spirit. Me and a couple other folks got together and we wanted to solve the problem of finding a place to live. We're not the first people to try to solve it, and I'm sure we won't be the last to try to solve it, but we want to make it easier for students to rent houses and apartments off campus. A lot of those markets are still mostly or fully offline, and there's usually a mad rush to try and find a place to live. We recognize those issues and we tried to solve them.

As we were going about doing that, we kind of quickly realized that there's not a lot of incentives for landlords to digitize their portfolio. There's not a lot of incentives for landlords in student housing to really do a whole heck of a lot, but helps the students out because they're already going to fill other properties, which is really high occupancy in student housing.

We kind of pivoted, and listened to the market, and realized that there wasn't a huge demand on the landlord side for this listing platform, but there was a lot of demand for better tools to manage tenants, and better tools to manage and communicate with those tenants, and to manage their businesses. That's kind of how I got my foundation. I worked on that listing platform for a few years, learned a lot about the market, and then myself and the CTO of that company started and founded Innago in 2017, and we've been hard at work trying to make lives easier for landlords ever since.

Jason: How do you make lives easier for landlords?

Dave: Innago is tenant management software, and we call it tenant management software instead of property management software because we really believe that the focus should be on managing tenants, managing those relationships, and managing those personalities. Innago, of course, includes a lot of your classic property management tools like online rental payments, tracking payments, basic accounting, online lease signing, tenant screening, etcetera. But at its heart, it's a communication platform. It's something that makes it easier to interact with and manage those tenants. We believe that having that, having that foundation enables landlords to become better landlords, and property managers become better property managers.

Jason: I haven't heard of the software before, is this something that there's a good amount of property managers already using? Is this geared towards landlords, or is this geared towards property management businesses? Help me and the listeners understand Innago here.

Dave: Yeah, absolutely. We work with both. We work with landlords as small as one unit, and landlords in the thousands of units. The software is really flexible, it’s effective, but it's also simple and intuitive for somebody who just owns some properties on the side, works a normal nine-to-five, and then manages at nights and on weekends, and for a landlord or property manager that's fully dedicated. We work with both property managers and landlords. We predominantly work in the residential space. We do a lot of student housing landlords, given my background, and my partner's background. We also have some commercial landlords as well. It's a really powerful, and flexible tool, and we work with all sorts of different clients.

Jason: Cool, that's exciting. Help people understand, because a lot of the listeners in our audience probably already have a property management software, I mean, probably likely. They're probably already with Buildium, AppFolio, Propertyware, maybe Rent Manager. They're probably with one of these guys. But nobody's ever fully happy with their property management.

Dave: Right, of course.

Jason: So help those listening, how can they see where you fit into the market in relation to these?

Dave: Well, yeah, it's funny you say that. I was actually listening to one of your earlier podcasts with Taylor, and he has the accounting services, the consulting accounting services, and one of the things that he mentioned, they work exclusively with AppFolio users, and kind of what they said is, “We only hire people that have worked at AppFolio, and we will only work with AppFolio at this stage because that's the only thing that we're comfortable with,” because it's this monolithic behemoth that you need expertise to even navigate, right?

Jason: Right.

Dave: That's definitely true for AppFolio, and it's true for a lot of the other software. There's a huge learning curve there. The first time we hire somebody on Innago, we always sit them down, and we jump on LinkedIn, and we do a little exercise, or research the companies. We're not looking for employees of those companies, or even their company page, we’re actually looking for employees at property management companies that their job title, their role is like the AppFolio expert on T, because you need certification to understand how to use it.

That was kind of the initial kernel Innago came out of is, you shouldn't need a certification to use property management software. It should be like picking up Gmail for the first time, or picking up iPhone for the first time. It should be intuitive, and simple, and elegant, and powerful, and flexible to work with a lot of different users in a lot of ways. That's really our difference, in the way that we're approaching the market, putting a lot of time, and thought into the features, and the way that they interact, and the way that the user interacts with those features.

We're really proud of the features that we do have. It is an ongoing product, and we're constantly adding more. I think for a lot of property managers, and landlords on the higher end, they're going to find at this stage that it might not be a perfect fit, but for those folks with small to mid size portfolios, it's got a lot of really great stuff that it will work well for them.

Jason: Yeah, I'm in total agreement. When it comes to software, the number one challenge tends to be adoption, and ease of use is right there. If something is intuitive, that's the biggest challenge, and hurdle.

Dave: Right.

Jason: I don't even like them using software that's ugly.

Dave: Right.

Jason: I just can't bring myself to do it. Maybe it's the designer in me. I don't know, but if I'm going to be living in something, I don't want it to be ugly. That's why I use Apple products because they just…

Dave: Right, absolutely. Clean design.

Jason: I was around my mom just yesterday, and she had a computer and she was like, “I clicked on Chrome, and it's not loading, and nothing's happening coming up,” and I'm like, “I don't know, that's a PC. I've never had that problem on a Mac.” I just don't have that problem. I just think it's funny. I was like, “I don't know, good luck.”

Dave: Yeah absolutely, and a lot of property managers and landlords—many are very tech savvy, there's also many that aren't so tech savvy. It's equally, if not more important, to have something that's not incredibly complex, and incredibly challenging, and opaque, and difficult to enter into.

Jason: I'm incredibly tech savvy, and I probably could’ve figured out my mom's computer thing, but it probably would’ve wasted an hour or two of my time and I don't want to waste time figuring out my software at every step of the turn and teaching my team members how to figure out software at every step of the turn. Intuitiveness in software is my number one priority. A lot of people build their whole set up internally in their business, trying to find one piece of software that can do everything, and it's usually really awful at everything in a lot of instances, instead of finding the easiest, and best, and fastest tools.

Speed is my love language, I think in business, and I want it to be fast, and want it to be simple, and intuitive. I love that that's kind of a foundational goal with your software, because I don't believe that any of the other property management software, that was their foundational goal, ease of use, and to be intuitive. If it was, they've gotten long far away from it.

Dave: Right, yeah, I think you're right.

Jason: Yeah, and some are much worse than others, and some of them, they can do everything. They're like the ultimate Swiss army knife. Like I've joked in the past, you're not going to see a handy man carrying around a multi tool to try and do all this hard jobs.

Dave: Right.

Jason: He's going to have a nice tool box with the best tools. The software’s more intuitive, the software is really easy for people to use, and now you're saying on all parties for like the owners, they want to maybe check reports, is there an owners portal?

Dave: There is.

Jason: Tenants that want to pay rent, and do their stuff, there's tenant portal. And then for the property manager, they can manage and see their portfolio pretty easily, and know what's available, and vacant. Does this have marketing stuff connected to it yet for listing, and the getting the properties out there in the marketplace?

Dave: Yeah, great question. We do not currently have marketing. We plan to roll that out, but as you mentioned, I think one of the problems that's happened with other software packages, the feature creep went too fast. They wanted to get all the features that any landlord could ever ask for out as quickly as possible, and that has not been our approach. We have said let's do this methodically, let's think about ways to integrate this into the way that the rest of the software works. Let's make sure that it's easy to use.

We are constantly adding features but we're not necessarily rolling out everything that everybody wants, all at the same time. Market syndication is what we call it. The marketing piece is definitely on its way, but it'll probably be another three or fours months before we have that out there.

Jason: Yeah, feature creep is a real issue. I'm a big fan of Jason Fried. He's the CEO of Basecamp. I got to hang out with him on a Skype call for 90 minutes. He cut my staffing costs in half overnight, no doubt. I'm a big fan of him. By saying he cut my staffing costs in half, I should say he doubled our productivity. I didn't just fire everybody. We just became that much more productive because he helped me understand how we had so many interruptions, we had so many things that weren't intuitive, and he changed how we communicate as a company.

He has a similar philosophy when he talks about creating their softwares. Basecamp doesn't do a whole lot compared to a lot of other software, it’s pretty limited in its feature set, but it's consistently always at the top of the tools and resources people mention for project management even though I really don't believe Basecamp is a project management tool, I believe it's a communication platform for internal communication, that's how we use it.

Everyone's going to ask for features, you have to really be picky in choosing about what are the features that are really going to matter the most and get the biggest bang for your buck and really make a difference without it becoming overly crazy, too cumbersome, unintuitive, and difficult to do. There's always that balance of managing all of the features.

Do you see that you guys will be doing any sort of Zapier integration so that people can create zaps and start connecting and integrating with third party tools? No software has come out with this yet.

Dave: Yeah. That’s a really good idea. That is not our road map but I love Zapier. We use it for all sorts of other things, whether it's connecting Wordpress to HubSpot or whatever. It’s a really cool platform. That’s an interesting thought. We hadn’t gotten that far. We might still…

Jason: Add it to your list and be the first. I'm waiting to see who is the first property management software the adds Zapier integration because everyone's been asking for it. All these people want it connected to their automation. They want to connect it to their process street processes, or they want to connect it to whatever. I think this would be a really cool thing.

Dave: We’ll let you know when we do.

Jason: I keep throwing that out usually to property management software that I have on my show and I'm waiting to see who's the first to have Zapier integration. Some people call it [zey-pier], but I think [zey-pier] is weird because it creates [zaps], people, so it’s Zapier. You're not [zey-ping] your business.

What else should people know about this software? What are some of the most common questions that a property management business owner might ask that they're concerned about?

Dave: Well, one you hit on was the sub users. Enabling not just the head property manager from accessing the platform, but also giving out who has access to which permissions, who has access to which features. Maybe it's Bob, you want him to handle these categories for these properties, or you want your property owners to log in and be able to handle it themselves.

Jason: There's the ability for vendors to leverage and use the system as well?

Dave: Not vendors, that would be like a maintenance person that you either have on staff or you have on retainer 1099 or whatever. We do not have a vendor portal at this time. That’s a big one and then the other really common question we get is of course the pricing because of the sector that we’re in, that's at the top of our base mind.

Jason: Do you want to tell pricing now? If you're planning on changing, don’t. Tell them to go to your website.

Dave: No, I'd be more than happy to jump into pricing. Now it’s pretty unique, we're 100% free to use for landlords. There’s no monthly fee, yearly fee, setup fee, there’s no contract. There's absolutely no cost. Everything that I've mentioned is included. Instead, when a tenant pays rent online, we charge them $2 for an ACH transaction. We charge them $2.75 for a credit or debit card, and that's it.

Jason: Totally reasonable. I've been saying for at least over a year to people who have listened to some of my older podcast episodes that free property management software will come and there will be the day that somebody's going to offer it, just like people aren't paying for Gmail, people aren't paying for this sort of stuff and it's making money. It manifested, here it is.

Dave: That’s right, we did it. It's 100% free for the landlord. Some landlords see the value in an online payment, they see it so highly to pay actually choose to incur a cost and we allow them to do that if they want to, but for most landlords 90% plus, they're not paying a dime to use Innago.

Jason: Very cool, that's really interesting. This would be fantastic then for startup PM's, startup property managers. A question that my team would care about is for the rental listings, the vacant properties, do you have some way of listing the vacant properties in some web based fashion? If they're putting properties into their system, is there some sort of code that we can embed on a website to show their available rentals?

Dave: Again, there's nothing on the marketing side just yet. Everything is cotntained within Innago but we certainly see the value in that.

Jason: Maybe in the future then. What else should people know about Innago? Anything else you want to throw out there?

Dave: Well, we offer particularly in our sector where you do have some of the lower cost platforms out there or some of the simpler platforms out there I suppose. Oftentimes, they don't offer any sort of support beyond a 48-hour email window. With Innago, we’re a little different, we offer full phone support. We also have embedded videos and help section to ease landlords along in the system as they get started and learn the platform. We’re really big believers in early success begets future success. We want to make sure that we’re hand holding for your first month, two months on the platform, and ensuring that you understand how to use it. You can use it effectively and can leverage it to improve your business. Once you do that, then you're off to the races and in really good shape. We offer a unique level of support that many others can't really match.

Jason: What platform are you using for support?

Dave: We use Freshdesk, and we use HubSpot, and we use Zapier to connect certain things to other things.

Jason: Cool. We use intercom for anyone listening, because property managers need some sort of support desk too. Dave, this sounds really neat. How could somebody demo this if they're curious to check out your software and how should they get in touch?

Dave: Yeah. They can go to innago.com and they can request access to a free account. We’ll get in touch with them shortly after just to make sure they're a good fit, that we're going to solve some problems for them. We don't want them to waste any time fooling around on a platform that is really not going to work for them. If they request access, we’ll shortly be in touch, and we'll get them into the platform, and they can start playing around with it.

Jason: Where does the name Innago come from? I'm a branding guy, I'm always curious. Explain Innago.

Dave: We like to think of it as a strong three-syllable word, that's about the extent of it. It's really kind of like Google or Yahoo, there's not a whole lot behind it.

Jason: Okay. Maybe we’ll have to make up the story sometime together about it.

Dave: Yeah. We’ve thought about it, but we'll take any suggestions.

Jason: When did you guys launch this? How new is this software?

Dave: We launched the company in January of 2017. We had the product out in the market, kind of like an alpha stage really in March of that year. We've been coming along ever since. As far as a product, we're a little over two years now.

Jason: Awesome. How many companies are using this right now?

Dave: We have thousands of landlords on the platform and it's growing every day. I would nail that hard number, but it probably changes by the minute.

Jason: Yeah. It's probably pretty tempting and pretty easy if it's free. I would imagine you guys will have some success and you guys are making enough money you think to stay healthy just through the transactions?

Dave: Yeah. As you know, there's a lot of landlords out there. The majority of them are still self managed or not using any kind of software. There's a lot of tenants that want to pay online. Only about 30% of the market currently pays rent online. That's a huge giant blue ocean that’s ready to be captured.

Jason: Yeah. There's a lot of blue ocean that are self managing. If you really want to super attract property management business owners, if you can figure out a way to help connect these self managers so that they can get that professional managers to take over stuff, and partner, maybe create some partners, I think you’ve got a winning affiliate business going on right there that’s good for your company.

Dave: Absolutely.

Jason: I know there's lots of people listening that would like to get connected to those that are self managing and work with them. Dave, super cool to have you on the show. I wish you lots of success. It would be cool to have you come back maybe in the future after you've come out with even more features if you’ve got something really cool to share. I wish you guys a lot of success with the free software. I've been talking about this for a while. I think it's long overdue. This is really great.

Dave: Awesome. Thanks so much, Jason. I really appreciate it, my pleasure being on the show.

Jason: Yeah, thanks for coming on.

You heard it everybody, free property management software that is intuitive. If they are really intuitive, they're going to have a lot of natural success and growth, and if they're free, they're going to have a lot of growth. If they can make the numbers work which sounds like it would be pretty easy with all the transactions that are going to be occurring, it could be a game changer.

I think other property management software, they're a little bit greedy, and there's too much of that feature creep. I think this will be a competitor. It’d be interesting to watch. Let’s keep our eyes tuned, our eyes peeled and stay tuned to see what they do.

Anyway, this is Jason Hull of the DoorGrow Show. If you are wanting to know if your property management website is leaking money because every website is probably leaking money. If you want to see that it’s leaking money because you don't want it to be leaking deals and leads anymore and you want to make more money and cash from your business, test your website out by going to doorgrow.com/quiz and take our DoorGrow Score Quiz that’s going to grade your website on how effective it is at creating conversions.

Some of the questions are tricky. There's a lot of people taking the test and then make a bunch of changes to their website, some of them are false positive, so be careful if you're going to do that. Do that quiz and then maybe talk to our team and we can help you improve your website piece because I really don't believe that anybody's better at creating websites that make money than DoorGrow for property managers. Alright, we'll talk to all of you guys soon. Until next time, to our mutual growth.

Download this Episode

Jul 16, 2019

If you enjoy unique challenges, daily variety, learning new things, finding opportunities, and experiencing freedom, then you would probably be successful in property management. Entrepreneurs would rather work 80 hours a week for themselves, than for someone else. You don’t have to do it all on your own. Be willing to take some risks, and connect with like-minded people. Let your entrepreneurial spirit fly!

Today, I am talking to Bryan Jenkins and Jonathan Cook of AHI Properties. They share strategies that consistently grow their business and add doors in multiple markets.

You’ll Learn...

[02:00] Keep on Growing: Corporate housing to single-family homes to property management.

[05:25] Real Estate Market Crash: Created shift in income and dealing with investors, despite technology.

[07:20] Love it, or Hate it: Learn something new every day in property management.

[08:05] When’s the right time to grow and expand? Adding doors in multiple markets.

[09:42] Sand Traps: Think outside the box to grow property management business.

[11:15] Educate Clients with Market Knowledge: Direct investors into markets where they can make money and purchase more doors for AHI to manage.

[12:03] Game Changer: Diversifying existing portfolio and dealing with accidental landlords who leave when it’s a good time to sell.

[13:40] Recipe for Success: Gain momentum and referrals by building partnerships and relationships with sister companies, third-party providers, and contractors.

[19:57] Four Ds to Revenue: Deals, Doors per deal, Duration, and Dollars.

[24:30] Focus on Funnel: Multiple sources serve as supply line for incoming clients.

[26:07] Strategies and Approaches: How to expand and operate in multiple markets.

[27:13] False Scarcity: There’s plenty of opportunity to create business and follow up because 70% self-manage single-family residential properties.

[29:10] Remember Me? Make sure to have a Customer Relationship Management (CRM) strategy to keep track of clients and properties.

[36:07] Bryan’s Biggest Piece of Advice: Keep an open mind, don’t be afraid, but focus on multiple funnels and opportunities to develop client relations.

[38:03] Generational Change in Property Management Profession: Think about technology, bring awareness, and open people’s minds.

Tweetables

Let your entrepreneurial spirit fly.

Recipe for Success: Gain momentum and referrals by building partnerships.

Four Ds to Revenue: Deals, Doors per deal, Duration, and Dollars.

Resources

AHI Properties

AHI Properties Email

National Association of Residential Property Managers (NARPM)

MLS

U.S. Department of Housing and Urban Development (HUD)

IMN

Five Star Conference

Roofstock

Deb Newell of Real-Time Leasing

Matthew Whitaker of GKHouses

DGS 75: Bridging the Gap Between Inside and Outside Sales with Jennifer Stoops of Park Avenue Properties

DGS 86: Utilizing Remote Assistants with Gwenn Aspen 0

Transcript

Gentlemen, welcome. I’ve got here hanging out with me Bryan Jenkins and Jonathan Cooks. Which ones which?

Jonathan: I’m Jonathan.

Bryan: And I’m Bryan.

Jason: Hi Jonathan. Hi Bryan. Jonathan, Bryan both of you have some experience in growing your property management business and I’d love to get into your background. Whoever wants to go first, share a little bit about your background, how you got into property management, into the space, and maybe a little bit about why somebody should listen to you today.

Jonathan: Bryan is much more impressive. You go ahead, buddy.

Jason: All right. Let’s go, Bryan. He threw you in.

Bryan: I’ve been a property manager now for 19 years and we started this firm ground-up but tied into a corporate housing company, where we do fully-furnished corporate housing for guests that are relocating. We operate that model in 12 different physical locations in 6 states, servicing 14 markets. With that, we had brick and mortar locations.

I came online in 2000. We started buying residential single family homes to facilitate our corporate housing needs. From there, we actually acquired a property management company here in Birmingham, Alabama back in late 2003. Since that point, we’ve been growing. That’s the only acquisition we’ve really done through the years.

We’ve first acquired that management company. We had 109 properties and that portfolio that we acquired. By that time, we purchased 52 of our own properties and eight classifications for corporate rentals and lease back. With that, we’ve grown over the years to five locations now and it worked in two states with our property management platform. We’re managing just shy of 1100 single family homes now.

I personally came from a military background, 9 years active service, got into real estate. My parents have always been entrepreneurs. I’m part of this operation and really got plugged in. Probably my big cook kick off and the expansion piece of it really took flight after I found NARPM back in 2011. I got plugged in there with the Atlanta chapter. I’m the past Atlanta chapter president. I’m currently the NARPM National Member Services Committee Chair and I just dropped my application for RVP. So, see how that one plays out, but a lot of experience. We’ve got a team. Including myself, we’ve got 23 property managers working on our operation and Jonathan is our business development. I’m going to segue that into him.

Jonathan: I got my real estate license in 2007. I was the youngest realtor in the state of Alabama when I got it. I was 21.

Bryan: Fun facts.

Jonathan. Yeah. Fun facts. But my entire life I have been surrounded with real estate. My step dad owned a real estate company. He was in construction for a long time even before that. My mom’s best friend is a real estate agent in the area that has always owned properties, has her own rental company.

After highschool, it just became my secondary job for the longest time of being her property manager. I don’t want to drive out to my 15 properties or how many she ended up having at that time. “I’ve got this property. I need you to run over there. Get rent. Get this. Make sure you maintain this. Paint these walls. That tenant’s out. That tenant’s in. Call the newspaper.” This is early 2000s. Before I even got my real estate license, I was still trying to do the maintenance piece of it. Then when I got my real estate license, I was doing real estate and had a...

Bryan: Work field tech.

Jonathan: Yeah, like a field tech. I had this halfway working knowledge of what property management was, I thought, supposed to be, but I was a realtor at that point. So, I was like, “Yeah, I’ve got an idea.”

When the real estate market crashed in 2008–2009, there was not the source of income that I was used to. I started dealing with investors with the slight little piece of halfway working knowledge that I’ve built up with my family, like rentals, trying to figure out how the single family rental market works, and start cherry-picking areas because I had access to NLS and I could look up where properties were.

At that time, there was no internet documentation. I couldn’t send documents online and have them signed. There was no electronic signatures at all.

Bryan: It was that long ago.

Jonathan: It really was. I was having to drive offers on HUD homes from Birmingham where I’m at, in an hour-and-a-half away to the closest HUD office which is in Anniston, which is a whole another city in Alabama. It was an hour-and-a-half. I had to drive and had to have ink on page. “Here. This is an offer. Will you take it?” Then you end up, “Nah. Get out of here.”

Jason: So needless to say, things are a little bit more efficient now.

Bryan: A little bit.

Jonathan: My wife actually works for AHI for years before I did. I just started as the Business Development Manager in October of last year after my wife begging me for years. “Would you please go with AHI? You know what we do here.” I’m like, “Yes, it’s property management. I know how to do that.” Oh, I had no idea how to do that. Then I got here and like, “Oh.”

I got plugged into NARPM. Started learning all the extra pieces, ins and outs that I didn’t even know that I didn’t know here at AHI. I learn on a daily basis from Bryan and from everyone out here in the office and it has just become, “I get it now.” There’s always going to be stuff that I’m not going to know.

Bryan: That’s the challenge. That’s the beauty of property management. I always say, you love it or you hate it, there is no really gray area in between. As long as you’re learning something everyday and solving issues, that’s what keeps me coming back daily. It’s kind of us.

Jason: Like I said in the intro, the people that like this like the unique challenges, the daily variety, they like the opportunities, and ultimately if you’re an entrepreneur, you like freedom. And you’d rather be working 80 hours for yourself than 30 for somebody else.

Bryan: That’s right.

Jason: We’re crazy like that. Let’s get into how you guys have grown. You’ve mentioned there was an acquisition, there’s a couple of little things that you’ve done, but let’s get into how are you adding the bulk of the doors into your business. I guess the conversation topic at hand is supposed to be about multiple markets. How do you manage doing multiple locations and when do you feel it’s the right time to go into a second location for most managers that are listening?

Bryan: I’m going to say that, based on what I said earlier in our history, is we’re probably a little more unique than a company that’s trying to open a market from scratch in an outside area. Our growth strategy is actually to come alongside our corporate housing company, utilize the brick and mortar they already have. Then we just come in with client, we come in with systems, and hire local talent. With that, we’re ready to go operational, handling back office out of our main hub here in Birmingham. That allows us greater freedom and greater flexibility and movement with our client base.

Our most recent acquisition was Oklahoma City and we opened in December of 2017. We went out there basically with a client that took us out there with 24 properties to get us started. Hired a single property manager and now we’re managing 158 properties on the ground there. Some other clients have become along the way and have been clients we’re working with in multiple markets as well.

Jason: Let’s give some of the listeners some tips or some strategies here for growing their property management company. We’ve got two kinds of sand traps that people fall into. The first one’s maybe the solopreneur stuck at 50 or 60 units. What would you recommend to somebody that have 50 or 60 units if they’re wanting to add doors and build up a portfolio?

Bryan: Let your entrepreneurial spirit fly, first and foremost. I would say, be willing to take some risk. You have to be able to do that. What I see in property management is, I see people that are stuck in the box. What I mean by that is they’re happy signing accidental landlords on a daily basis and dealing with the one-off homeowner that by default is the landlord.

Jonthan: They called you because they’ve seen your side.

Bryan: Right. Jonathan just talked to one earlier today and the expectations are totally off scale. They have no investment mindset whatsoever and they’ve got a strong emotional attachment to the property.

Jonathan: And in my opinion, if you start taking in those kinds of clients, it’s going to keep you at that rate because they’re going to require way more attention. They’re going to need hand holding for every little thing. They don’t have that entrepreneurial mindset.

Jason: If they’re only going to stay a year, that means every year, you have to get a new one to replace them. Plus another one if you want to grow and add something new. If you build your business on accidental landlords, it can be pretty difficult unless you’re magically able to convince them to switch to buy-and-hold.

Jonthan: Generally, you’re not directing them into the markets that they can make money, which will in turn allow them to purchase more doors for you to manage. That’s one of the things I like to help our investors there is identify markets. I think that’s super important for any property manager no matter where you are. Knowing your markets, knowing them really, really well like the back of your hand, and being able to educate owners and investors from all over.

Bryan: Yeah, whether investors gain experience whatever. Jason, I would say that the big game changer for us was really about 3½ years ago, maybe even 4 years ago. Looking at the diversification of our existing portfolio and then realizing we had a heavy concentration of accidental landlords, and hearing the same information being repeated back to say, “You know what? A lot of the property managers I know, their managed inventory were shrinking and consistently shrinking year after year as the sales market started to gain momentum.” And that’s what happens to your accidental landlords to say they jump ship when it’s a good time to sell.

Jonathan: And get my money back out.

Bryan: That’s right. Some of those we did over the years, as long as we’ve been at it, we’ve had investors that have actually started off as accidental landlords and then they’ve converted to buy-and-hold and then they’ve had another property, and another property. They’ve educated themselves and they’ve become real estate investors.

In my opinion, they’ve done it the right way. They’re learning as they go the right way for them, I guess. They’re educating, taking a step, they’re not taking too much time to take the step because otherwise, you’d miss the opportunity. What we focused on was, we want to understand not only what is going on in our local market, but we want to get a broader national picture and see what markets are hot markets, why are they hot markets, what types of return on investment are investors realizing particularly after we looked at that focus on the time period after 2010. After bottoms have been hit and you’re starting to get some upward momentum again with property values and such.

We started attending outside events such as IMN or Five Star, started to align ourselves with some funds, some small REITs, and property owners that have portfolios that weren’t necessarily internalizing their management operations. They were small enough, they needed a professional partner to partnership with, to make their operations run as efficiently as possible, and focus on key metrics. That’s where we started focusing our education piece and then started signing those clients. Really, that’s been a wonderful piece.

From that, we’ve added another piece to our business which we have an internal insurance agency which we opened up last year that focuses on the investment product. They can insure in 50 states. If they’re buying property in one of our existing markets or even a couple of them, that’s the beauty of having multiple markets. They focus on investment in three- or four-year markets but then they’re buying elsewhere. The insurance piece will pick up their properties wherever they have them in the country. That’s been a really powerful piece for us and that has come online especially we opened it last year but we’re really been gaining momentum in the last six months with that piece.

Jason: This is a third party tool, or resource, or vendor that you guys have signed on with?

Bryan: No. This is a sister company. It’s Birmingham Insurance Group and their carriers are third party. They use national carriers that are backed by Lloyds of London and a few others.

Jonathan: It’s downstairs.

Bryan: Yeah, just downstairs in our office building. They are truly a sister company and my partner is a shared owner in that entity. It’s been a nice value add for us both ways. They’re referring people into us, we’re referring people out to them, handling the renter side of it. The big thing is the master policies with the insurance. That does make it nice and easy for investors, again, no matter where their stuff is, to add or take away property as they need to from online portal systems. It works pretty well.

My partner and spoke on a couple of podcast, investment network podcast and got invited out to the West Coast to speak to some folks and from there, that opened the door to three or four buyer networks, basically. They were focused on Alabama already and then Oklahoma City. Then aligning ourselves with turnkey providers and partnering with some local contractors to be able to facilitate that piece ourselves. That’s been the growth cycle.

Back to that spread your entrepreneur wings, I think that somebody that really get stuck in a box and only want to do property management per se may handcuff themselves a little bit. I think you can’t be the master of all things, I understand that, but understanding what industry you’re in and how you can be most effective and partner with people. For example, I had a phone call with a real estate agent here locally that I’ve known for 15 years and all of the sudden, April 1, he just called me up today just to say, “Hey, April 1. I partnered with a rehabber, I partnered with a guy from a hedge fund, and we’ve got a couple of funds going. I’ve got some inventory to rehab and I hear you guys have some investor clients…” there’s partnerships all over the place.

At the end of the day, I think it all comes down to the relationship piece. Getting in front of people and just building those relationships. Maybe they’ll do it. The one sit down at the bar and have an hour a bit, maybe it’s the third one or the fourth one, just consistently following up. I found that a lot of these guys, if they’re shopping you and shopping your competition, what happens is they’re not really ready to pull the trigger that day. But if you stick with the follow-up, just stay in front of them, stay consistent, and know your metrics, then a lot of these guys will circle back to you and they’ll give you an opportunity. That’s been our recipe for success for the last three years.

Jason: All right. You threw out a lot of things really quickly. I need a recap and I have notes here. For those that are watching, let’s cover some of these. First, you said, make sure you identify the good markets with the best investments. Get really familiar with your market even nationally taking a look at which markets are hot. Most managers are working in the market they’re in, but the advantage of looking nationally would be to understand maybe how their market fits in, play with the national scene to see if their market could be savvy to market investors outside of your geographic area. That sound about right?

Jonathan: We’ve recently had a lot of out-of-state, out-of-market investors coming in because they’ve heard nationally in Birmingham. They come in and some of that information sometimes is going to be a little bit old but it’s taking them in and being willing to, and having the knowledge to help them understand the differences. Birmingham is big. How do we separate that into areas of, “Let me explain this area, then this area, then this area,” and then compare it to whatever markets that are used.

Bryan: There are macro versus micro views. I think that gives you common ground to speak to the investor. If their coming out of the Indianapolis market, then all of a sudden they’re looking at Alabama. It gives you some common ground to start with.

Jason: That first one ultimately what’s really helpful is to have context to give them, these out of state investors, to see how your market fits in with the national scene. I think that is wise. Know your own markets, know the little neighborhoods in your market, but also see how you can fit into the macro view of the nation and beyond.

The second thing you mentioned is to shift away from accidental landlords, just recognizing that. I talk about this concept called the 4Ds to revenue. The first D is deals. The second D is the number of doors per deal. A lot of times people just lump those together and they think a door is a door. The third D is duration. That’s how long you can keep them on. There’s a massive difference between a one year accidental and the 10-year buy-and-hold. Ten times difference in revenue return. Then, the last D is dollars, making sure you get fees in place. A lot of people don’t focus on each of these things individually. They’re just like, “I just need to get doors on.” It’s just about the doors. There’s a such a big difference between those. So I think that’s wise to shift away from accidental landlords.

The third thing you’ve mentioned is identify partnership opportunities. There’s a lot of different ideas here for partnerships. You had mentioned partnering with an insurance product or an insurance company, bringing in a value add and partnering with them, getting on investment network podcast, then connecting to buyer’s networks, turnkey providers for partnerships. Then you’ve mentioned follow-up over and over and over again.

Bryan: That’s right. One other thing I’ll add to that would be your preferred vendor partnerships. One we allude to all the time is we work with Roofstock, which I don’t know if you had an opportunity to speak with those guys in the past.

Jason: I haven’t.

Bryan: Great product especially if you’re buying anywhere coast-to-coast but as roofstock.com—shameless plug there—be sure to check that out.

Jonathan: It’s not for us.

Bryan: No, it’s not for us, but what they do is they come online, they certify their property management partner and the same thing with the wealth networks. Once they’ve certified you as a vendor and a partner in that capacity, then you’re a trusted resource. It makes the closing of the transaction that much easier.

Jonathan: One of the things that I really like about Roofstock is if you are able to direct your own internal investors, if you don’t have enough time to go through an actual buyer’s agency with an investor that does want to potentially grow more doors and you’re busy being a property manager, you don’t have time to walk down every single property with them, you can direct them to Roofstock and say, “Hey, grab your properties from Roofstock. Bring them to us.” That helps take that portion off of it, so they’re buying properties that you want to manage.

They’re buying properties that are already set-up. They’re already getting vetted out. They have an idea of what they’re going to get. They’re not coming to you with some uninformed number of “I saw a house and I have no information about it so maybe can we put [...] in there?” No, this house has [...]. This is how much I’m paying for. This is the ledger. This is what is already making for rent. This is what it should make for rent. Whatever.

Bryan: It allows you to control that potential client so you keep them inside your little circle if you will, to ensure that they’re going to be coming back to you. Just based on people we referred to them over the last couple of years, the relationships are really tight. They take really good care of them and they do come back. They asked the property managers to perform to certain levels and the properties, as we mentioned, they’re vetted out in advance. A lot of the due diligence piece done, we still always encourage our clients to do their own due diligence but a lot of that is done on the front end for them. It’s a nice value add.

Jason: That’s a great tip. Property managers listening should go get connected, if they can, to Roofstock so that they can have that vendor partnership. They can be listed as a preferred or recommended vendor. Are there other channels or how would somebody identify their channels that they should be looking at to become a certified partnership, or a preferred vendor as a property management company?

Jonathan: Local REIT, REIs, and stuff like that. Any sort of investor networking. Most cities will have a local chapter and sometimes it’s going to be wholesalers. That’s fine. You need wholesalers if you are trying to bring in homeowners that are going to be growing their business and growing their doors which in turn is growing yours. You’re going to have to have some product to give them. It’s not bad to have a few wholesalers that you know and you know the product that they have and you can stir. Maybe you get an extra commission off of that, who knows, but you’re least adding to your own business by adding to theirs.

Bryan: I think my biggest tip in this arena right here would be, I view everything as a funnel. You’ve got to have multiple sources pouring into the funnel that’s going to push out to you on the end. I guess the tip to it all is develop the multiple networks and the multi approach to just having a supply line for incoming clients.

We all know about the renter side; that’s pretty easy. What I think has been underdeveloped over the years in the property management arena has been the client-based side of it and trying to attract the clients back in instead of being strictly out of necessity, such as the case with an accidental landlord.

There’s so many factors to focus on but ultimately, we are big on having probably no less than 10 different sources pouring into our funnel and then we give them points. So, there’s always a trickle effect and then you’re maintaining those relationships along the way.

In our operation, with five locations I’ve got five different property manager brokers that are actually running the operations. We actually have an education piece each month which we push out all of our brokers. We have a mastermind call group each month that we work through problematic areas within the individual operations corporately and then on the local market level. All these things help us stay consistent in our team approach.

You had Jen Stoops on recently, right? With Park Avenue? We love Jen. We did a show with Jen and Deb Newell after the Five Star event in Memphis, March, I think it was. We were talking about Jen’s approach with John in Park Avenue. He’s always been that hub approach. They have their back-end office piece and then they spoke out and she explained it to us. That’s been fascinating to me because we have brick and mortar in each location and a lot of it depends on what your state requires.

Again, there’s a couple of different strategies on how you do those operations and how you expand out and operate multiple markets, but both of them work and both companies are successful at it. Again, I just think don’t put all your eggs in one basket. My grandpa used to tell me that a long time ago and just growing up with entrepreneur parents I [...] that, exampled out to me on a daily basis. That’s probably the biggest approach. Don’t be fearful and don’t put all your eggs in one basket. Just be mindful of the relationships.

Jason: Yeah. I love this because I feel like the stuff that you’re doing is foundational to growth. This is what the property management industry needs right now. We’ve got 70% self-managing in single family residential. There’s plenty of opportunity. There isn’t scarcity in this industry, yet. Yet, there’s this false scarcity that’s been perpetuator-created. I think it’s just so refreshing that you didn’t mention, yet, it’s all about SEO, it’s all about doing pay-per-click ads, it’s all about social media marketing, it’s all about content marketing. You’re actually going out and tapping into that 70% and you’re creating business. You’re walking out the door, the business is there and you’re getting the business while everybody else is fighting over the coldest, crappiest, worst leads that fall off your table.

Bryan: I’m going out also to say everything you just addressed is important, too. I’ll let you be going on in the background but the resources have been beaten to death over the last several years.

Jonathan: We get those too. We get plenty of those and you have to call.

Bryan: That’s right.

Jonathan: You have to. You have to still call them.

Jason: And follow up, and follow up, and follow up.

Jonathan: You have to.

Bryan: The funniest thing and I know you can probably relate to this but we see it all the time. Any property management firm operator, or property manager just listening, they have seen it on multiple occasions. You’ll get there’s tire kickers that come to you, they’re checking out your services, your rates, your reputation and all these stuff. Then they’ll say, “Okay, I’ll call you when I’m ready.” You follow-up with them and then eventually they come back 12, 15 months later, “Okay, I’m ready to go. You remember my property?” We looked at thousands of properties since then.

Jonathan: “Remember, you saw it? You saw it.”

Jason: Yeah.

Bryan: We do make it apprise, “Hey, save that information. There’s a good chance he comes back around.” That’s just experience of it all, but again, those are going to be your accidental landlords, your one off homeowners that—not being negative—aren’t really investors. They’re just investors by necessity only.

Jonathan: Or they just want to know what their property potentially can list for.

Jason: That’s why it’s important to have a CRM and to keep track. I’ve talked to hundreds of property managers and it’s so funny because I always hear, “You remember me?” and sometimes—I’m honest—I’m like, “No, I don’t. But I have really good notes here from when we talked and I can refer to that,” and that’s enough.

Bryan: It is. We’ve seen you around at events and such, and everybody’s intertwined in our industry, at least to the NARPM scene and a couple of other organizations we belong to. At the end of the day, it is about the relationships. I always said, the thing I love about NARPM—not to turn into a NARPM commercial—I always felt like the analogy that I would beat my head against the door jamb every single day and it was quite painful. I got tired of learning from my own mistakes. The opportunity came up to learn from other people’s mistakes, so that made it much more appetizing. I enjoyed it.

Jason: Let other people bang their heads and you can watch.

Jonathan: They already have. They’ve already banged their head on whatever problem you’re about to have. They’ve already done it. Here’s an answer for you already. It’s easy.

Jason: We see that a lot inside of our Facebook community as well, the DoorGrow Club. It’s a resource, everybody’s super helpful, you can just ask a question, and you get at least several really solid answers. You don’t have to be alone as an entrepreneur. I think as entrepreneurs, there’s this myth that’s created in our minds that we’re alone. It does feel like that a lot of times because our teams are a little bit different than us. There are people that want to see the uncertainty or they’re crazy freedom people. Most of the people, I think, in the world are not entrepreneur personality type, so we feel like we’re aliens sometimes on a foreign planet. But if you can get around other people through organizations like NARPM or through the DoorGrow Club and connect with other people, you start to recognize that there’s nothing wrong with you and you’re normal.

Bryan: And you’re not alone.

Jason: And you’re not alone. There’s plenty of people willing to help. I think as entrepreneurs, we are contribution-focused people. We get momentum by helping other people. That’s why we do what we do. I think everyone’s always so surprised if they’ve been disconnected from other people like them, other entrepreneurs at how helpful entrepreneurs will be. They’re so helpful, so giving. I think really, a rising tide raises all ships. This industry really needs more collaboration. We’re not at the point where there’s any sort of real scarcity, or competition really is fierce. There’s so much business available and there’s lots of room for growth. I think the industry is going to start to see that here in the next several years.

Jonathan: I think before I came to AHI, one of the things that I learned on day one was before being at this company, I did have that mindset of, “I can’t, I don’t want to share any of this stuff, I got to do all this by myself.” Once I’ve been at AHI, one of our biggest competitors, we refer to them all the time. We refer people to them constantly because they might handle this better than we will in this instance. The competition is such friendly competition in this industry.

Bryan: Are you talking about Matthew?

Jonathan: I am talking about Matthew. It’s so collaborative. We’re having him in an event in a month.

Bryan: You know Matthew Whitaker, right? Matthew Whitaker with GK? GKHouses?

Jason: Maybe.

Jonathan: He’s got good notes on him.

Bryan: Anyway, Matthew’s a contrast to my vision and what we’ve done with growth. He’s been growing through acquisition.

Jason: Very different strategy.

Bryan: Yeah. Homevestors, franchise holder, and then converted, internalized to PM operations after 2007–2008 and then went to work. Basically, he’s growing from Birmingham to Nashville, Chattanooga, Little Rock, Arkansas, then Denver and Fort Collins, Colorado. He’s done it through acquisitions. He’s a sharp mind. He’s cutting-edge guy, but we got along famously and have been friends for years. We’re actually hosting a PM summit coming up in a month, in June.

First thing that we put on in the State of Alabama—NARPM doesn’t have a chapter in the entire State—we’re trying to do a kick-off event and get some property managers in, geographically from Huntsville all the way down Montgomery, and just have a nice panel discussion. I’ve got some professional managers coming over from the Atlanta chapter, Matthew and myself. It would be a great event and we’re looking forward to it. I think it’s going to lead to bigger and better things.

My big piece, I think you [...] upon it, is just make our industry better and raise the bar for crying out loud. If nothing else, what that does for operators that are raising their bars, those that refuse to do it, there’s such a difference between the two companies. It’s easy to select the [...] that’s doing it bigger, doing it better and more efficient, and giving more value back to our clients and customers. That’s our focus.

Jonathan: One of the things that I see with these smaller realtors that are doing property management individuals is we all know similar stuff. It will be those stories where it’s like, “Oh, I had this client that was doing this and I knew they shouldn’t have done it. We just let him and it was an issue.” Okay, well, that’s not education piece. Inform your client instead of just sitting there and holding it. That’s the thing that I see. They’re afraid to lose that business so they’re afraid to step on those toes to educate their clients.

Bryan: Yeah. I’ll make it a point to empower my team members. When you empower a property manager, you always see analogy of the guardrail system. Our procedures are guardrails and if they stay within the guardrails, they can have their own little flavor. That empowers them to make certain decisions and do things that are instantaneous and beneficial to everybody involved instead of having to go through red tape.

Jason: Yeah. Let’s wrap this up. If people want to connect with you, find a little bit more info, or they’re curious about what you’re doing for growth, how can they get in touch with you? Any final words to those who are struggling with growth right now who are looking to grow their property management business?

Bryan: My final thoughts going back and recapping this thing is just keep an open mind, don’t be afraid but focus on multiple funnels, if you will. Look at multiple opportunities for you to develop client relations. I think our strategy ended up originating from the need for self-preservation. Is not that we are in danger. We just saw that the market was going to change and has changed and will change again. We want to be better prepared for that and allow ourselves better diversity in what we’re doing.

If they want to reach us, we actually do a podcast ourselves. We have an email set up for that podcast@ahiproperties.com and that ties directly to both of us. We just love to answer any questions. I’m always open and available by email and phone. I’ll be happy to connect and just give my two cents worth. Again, I always like to give back to the industry. It has been good to me and I like to give back.

Jonathan: I second everything Bryan said. He’s got it.

Jason: All right. Perfect. Bryan, Jonathan, grateful to have both of you here on the DoorGrow Show. Appreciate what you guys are doing.

Bryan: Thanks for having us.

Jonathan: It’s a pleasure.

Jason: It’s a good message for everybody to diversify your interest and how you’re bringing in business. It’s exactly what I coach clients to do, so I love that you’re reinforcing what I teach which is a welcome, refreshing unexpected thing. I appreciate you guys being here on the show.

Bryan: We appreciate you having us. We thank you very much. I just want to actually thank you for what you’re doing for the industry because I think it’s a wonderful thing.

Jonathan: Yes. It makes everything better.

Bryan: Yup.

Jason: Oh, thanks. Everyone says that and I’m going to ask you, what am I doing for the industry?

Bryan: Here’s the deal. I’m an old dog but you can teach me new tricks. There’s a generational change in the property management profession and I think as the level professionalism comes up, we see our younger generation of property managers coming in behind. I don’t want to say transitioning of the guard but it is a change of mindset from what was old. Think about the technology piece and the systems pieces that have kicked in, stuff that’s happened since 2012 is crazy. We were server-based.

Actually, what Jonathan was alluding to early on with the ink on paper scenarios. I think that’s the biggest piece. It’s bringing awareness and just opening people’s minds such as myself. The new line of thought process and focusing on efficiencies and systems and the benefits of what’s out there and available to us. I think that’s a huge help to entrepreneurs everywhere.

Jonathan: When you spread this message out to everyone through the internet and it becomes national and worldwide that people can get this information, when you’re going to partner with another property manager in a different area, at least we can start from a place where we can both springboard off of, we were able to send people to you and just, “Listen to this. That’s the information you need,” as opposed to us having to go, “We’re going to have to teach you all this stuff.”

Bryan: It’s fun to do to educate, but it is an education piece for your in-bound clients. You’re using all of that to really set them up for success with the organization. The reason we got into our podcast, specifically, was the first one my partner and I were on was a guest on one of the investment wealth networks and we actually signed 52 houses off that one episode, of clients coming in from out-of-state. That prove the value of it and then the education piece.

If you’re like me, if you travel, I listen to podcasts all the time and come outside my own little world. It just really open that up. People are listening on a more regular basis and it’s definitely an education piece. It’s on demand for you. That’s the beauty of it.

Jason: Great. It’s been great connecting with you guys. Love what you’re doing. Again, I appreciate you being here on the DoorGrow Show and I will let you guys go now.

Bryan: All right.

Jonathan: Thank you so much.

Bryan: Thank you.

Jason: All right. You heard it from those two gentlemen. The strategy for growth, really, you need a diversified approach and there’s so much available potential business out there. I really feel like the industry has so much potential for growth. I think it’s a really exciting time for property management. There are tons and tons of people that are self managing, they’re frustrated and they’re not searching on Google according to Google Trends.

Anyway, reach out to us at DoorGrow. If you’re struggling with any of these challenges, you feel like, “Hey, I’m ready to be coached. I’m coachable. I’m open. I’m ready to grow my company. I’m ready to make some painful difficult changes in my business,” then, I might be able to help you. Reach out to DoorGrow. You can check us out at doorgrow.com and make sure you join our Facebook community so you don’t end up getting stuck on random questions. You can ask questions in there; doorgrowclub.com. Until next time, everybody, to our mutual growth. Bye, everyone.

Download this Episode

Jul 9, 2019

Today, I am talking to Gwenn Aspen of Anequim, which offers remote assistant, Rent Manager call center, and Rent Manager software consulting services. Also, Gwenn and her husband, Jeremy, own the Wistar Group, a property management company.

You’ll Learn...

[04:40] How helping a friend, helped property management companies hire employees.

[05:20] Currently, 150 employees in Mexico work remotely for property management companies in the United States and Canada.

[06:25] Connections and Relationships: Life is all about taking care of and looking out for those you know and love.

[06:50] Internal References and Cultural Differences: Holding each other accountable results in low turnover/high retention.

[08:20] Managers Managing Remotely: If you manage someone who works remotely, get to know them as a human being.

[10:51] Webcam: Teams founded on trust and transparency should be seen and heard.

[14:50] For better or worse, Anequim and Wistar Group are unique and original company names that could be patented to prevent being sued.

[16:45] Finding a Good Fit: Anequim helps potential clients identify things that they don’t like to do and give them to someone who does.

[20:51] Time vs. Energy: Avoid burnout by identifying what fills or drains your energy.

[22:20] Onboarding Training: Includes four ways to not die in property management.

[26:12] Vetting Team Members: Extensive process of selecting candidates for clients.

[29:47] Working in Mexico: No background checks possible or databases available.

[34:09] Progress, not Perfection: Help property managers move forward and feel confident in making a commitment.

[38:21] Anequim Structure: Assistants, solution agents, and others handle 1,200 units.

[42:36] Every business needs systems: Planning, process, documentation, and communication.

Tweetables

Power of the Webcam with Virtual Teams: Just be there, and be seen.

Time and Attention: A manager’s most important resources; use them wisely.

Word to the Wise: Keep your clothes on when training employees.

Our job is to make sure people are happy with their candidates.

Resources

Anequim

Gwenn Aspen on Facebook

Gwenn Aspen’s Email

Wistar Group

DGS 76: Outsourcing Rules for Small, Medium and Large Companies with Todd Breen of VirtuallyinCredible

First, Break All the Rules: What the World's Greatest Managers Do Differently

Zoom

Myers–Briggs Type Indicator

Fair Housing Act

Americans with Disabilities Act

Culture Index

Traction by Gino Wickman

Management Time: Who's Got the Monkey?

DGS 85: Landlord Protection Insurance with David Holt of Surevestor 0

Transcript

Today's guest, I'm hanging out with the fabulous Gwenn Aspen of Anequim. Gwenn, welcome to the show.

Gwenn: Oh my gosh, thank you so much for having me. I'm so excited to be here.

Jason: I'm excited to have you. It's really fun hanging out with you in the green room and you were showing me your nerd glasses.

Gwenn: That I carry around with me everywhere I go because there's always a need. They’re literally nerd glasses, you guys. They're from Hobby Lobby, I got them for an event I had to go to because we were revenge of the nerds and I bring them everywhere because that's how nerdy I really am. But we can have fun too, we can be fun nerds. Right, Jason?

Jason: Yes. Maybe. It's probably possible. A lot of people think I wear all these weird, different glasses especially the orange ones. People notice I wear this orange glasses and they always come up to me and they think I'm trying to be so cool. Their like, "Why are you wearing this glasses? Are you trying to be Bono?" Which is funny because Bono wears them to block blue light, right? He's not wearing them just to be cool but he is cool. Way cooler than me. Then I go into this diatribe of why I wear them and how they block blue light and how it helps set my biorhythm patterns, helps me get good sleep, and then they’re just sorry they asked.

Gwenn: Well, that's what’s in your nerd shows Jason.

Jason: And then they realized they are nerd glasses, so they realize I'm a nerd.

Gwenn: Yes, because they bring out your inner nerd when you wear them and people ask about them.

Jason: Yeah. So, I got some less orange ones. This are my nerd glasses. This make me look a little bit smarter.

Gwenn: I think they look good. I like them a lot.

Jason: They're a little yellow to them but I don't have the tape. I have to get the tape and maybe add the tape at some point just to look more nerdy. Alright Gwenn, let's get into this. Give us a little bit background, so you run this company doing remote assistance from Mexico and you said they're not virtual assistance because they're not robots, right?

Gwenn: Right. No. They're not.

Jason: You manage Rent Manager, the property management back office. You manage Rent Manager's call center, so you have a call center for Rent Manager people.

Gwenn: We do.

Jason: Then you also have Wistar Group which is a property management company in Omaha, Nebraska.

Gwenn: Yes. That's all true. My husband and I started Wistar Group back in 2006 so we've been doing this for a long time. In 2008, a friend of his called him from Mexico because he lived in Mexico before I knew him for five years doing something totally different, transportation and logistics. The friend called and she said, "You think the economy is bad in the United States? Well, you should come down to Mexico. Things are really bad down here and I lost my job. Is there any way I could work for you in some capacity from home?" Because it wasn't only about the economy, but it was pretty dangerous at that time and my husband is the most loyal person you'll ever meet, for better or worse. That's right when VoIP phones came out so we sent one down to her, we figured how to make it work and she started answering the calls for Wistar Group—at that time, it was called Certified Property Management. She's taking the calls and it works awesome. We love it. She loves it. It's great.

Then we just started, as we grew, hiring all her friends for all the other jobs that we had. We just operated like that because it works for us for many years and then in 2016, our friends from Boutique Property Management in Denver, we were hanging out with them and they're like, "Hey, this Mexico thing is working out great for you guys. Can you hook us up with people from Mexico?" I was like, "Sure." Then I got them some employees from Mexico and they loved it. My husband and I were like, "Maybe we can help more property managers with this," and so it grown like wildfire since then and now we have almost 150 employees in Mexico working for property management companies across the U.S. and Canada. It's just a win-win for everyone and it's just so exciting and I love my job so much.

Jason: Okay, great. This sounds very similar to [inaudible 00:05: 37] who we had in the show except they do the thing in the Philippines. It sounds like a very similar sort of etymology or story behind how you got into this and it really was filling your own need and starting by helping a friend and it grew into helping all these different property managers. That's the interesting thing I've heard from those that have Mexican staff is that they hire one and all of a sudden, all their family and friends start becoming team members too.

Gwenn: Yeah.

Jason: That must be a culturally different thing, I think with Mexico versus the Philippines. I think they are both very family-oriented, but I think there's something about Mexico that they're like, "Hey, hire my brother." Or, "Hire this family member," and they're connecting people.

Gwenn: Oh my gosh. Yeah, the connections that they have, don't we all love that? Isn't that what life is all about? Is connections and taking care of the people that you love, that you know. It's just yet another thing to love about all the people I know in Mexico, is just how much they care for one another and have each other's back and then also hold each other accountable. That's the other things are that we grow a lot through internal references from one employee to another. If someone has a problem and they were the one who referred them, man. They hear it from the other employee. I mean there are that many cultural differences, but that's been a fun one. It really ends up keeping the turnover really low because they are happy, our employees work from home, and they love it, that's a huge advantage. They have this great connection with each other and we have Christmas parties. We're going to have a summer picnic with everybody. It's added a lot of richness to my life, just getting to know the employees as well.

Jason: I was going to bring that up. A while back, I read a book called First, Break All the Rules. I believed it's pulled up by the Gallup Organizations that does the pulling. They did a whole bunch of surveying companies trying to figure out what makes a really good team and what creates retention with the team. One of the number one indicators of retention whether somebody was going to stay in the company was whether they have a friend in the business or somebody they are connected to personally on the team. So, that makes a lot of sense. It increases retention, significantly.

Gwenn: I would say that's our job. If we’re going to hire someone remotely, if we’re the managers of this person, it's imperative that you get to know them as a human being to get that retention and to get that buy-in and to get them on your same mission going in the same direction. I feel like I know you much better right now just because we are in a Zoom Conference and that doing what with cam...

Jason: Now, we're totally homies because we are in Zoom.

Gwenn: Yeah, now we’re homies and we have the nerd glasses together, I mean. Those little things add to the relationship so if you make a point, I only communicate with people from Mexico using webcam because we have this amazing connection then and we feel like we know each other better. If you use a webcam, I swear it makes all the difference and getting buy-in from a remote employee.

Jason: I absolutely agree. I've done a lot of remote hiring in the past and there's a huge difference, but it got to a point where eventually, I have a policy in our company called the Webcam Policy and everyone is required to have a webcam to be on the team and to communicate and show up and turn on the camera when we do meetings because it ended up being, at one point I remember showing up having team meetings and there's 5-10 people without their webcams on and there's just me putting on the show.

Gwenn: I love that. I don't have an official policy, but not that you said it, I'm adding it. But I also have another employee from a totally different industry, he did a lot in banking and he was told to never have his webcam on. It was such a cultural dissonance when he came on the team because we were like, "Put your camera on. I can't see you. I don't know what you're doing. I need to see you." It was hard for him. It's good if you're somebody who requires webcams and state it at the beginning because some people, it takes them a while to get used to it.

Jason: Yeah. It is a part of my onboarding process that they have to review the webcam policy and read it. Do you want me to tell you some of it here?

Gwenn: Yeah. I think it's so important because whether you do remote employees from Mexico, whether you have someone in the Midwest, you know a lot of people hire people from rural Nebraska to work for their company because it's a lot less expensive.

Jason: Alright. I'm going to share an internal secret here.

Gwenn: Understanding the power of a webcam is crucial for the relationship working in my opinion.

Jason: Alright. Here's our webcam policy for those listening. We are a team founded on the values of trust and transparency. It is important in a virtual team to be able to see one another on our virtual meetings since we often can't meet directly in person. As a team, we don't care about your hair, makeup, clothes, etc.during internal meetings. Just be there. Not having a webcam during internal meetings can feel like talking with someone behind a reflective window. It causes humans to try to assume and guess too much because they lack nonverbal cues we have evolved to rely on. Why address this? And then in bullets: to promote an environment of trust and transparency, to improve the efficiency of company communications and shorten meetings by effectively communicating with the full spectrum of verbal facial expressions and nonverbal cues, to reduce multitasking, right? Because they [...], they're like, "Oh yeah. I'm listening."

Gwenn: Right. Totally.

Jason: To reduce the anxiety of those speaking on camera, and then having the expectation. It is expected that all team members will join OpenPotion, that's our corporation, virtual meetings on video in order to fully engage in team and one-on-one meetings, this promotes collaboration on multiple levels and it allows each individual to feel heard as they see and receive nonverbal cues from their peers. This also increases productivity and reduces anxiety as ideas are better understood when they're coupled with facial expressions, gestures, and other forms of nonverbal communication. When meeting with clients, we appreciate you doing your best to make yourself and your background presentable, but that is not required. We just want you fully present and visible. Then I have a quote and it says, "The most important thing in communication is hearing what isn't said," Peter Drucker.

Gwenn: Oh, I love it. I love it although I would push back on the not caring what you look like because I've had people show up, not very often, but I had a guy and he looked like he'd just been to the club, and just rolled out of bed, and I was like, "Man." Also, you have to know your audience. We have a screenshot and keystroke that we record of everyone that's working for us while they're working not when they're not. We had one guy who was at a webcam conference and he had his hat sideways and my assistant was like, "Is that okay?" If you live in California that might be okay, but if you're with an older team in Omaha and you have your cap on sideways, it just might not work. I was like, "No. They're in California. It's totally fine." She was like, "Oh, okay." You have got to know your audience, better know your audience.

Jason: I think it all boils down to what the entrepreneur wants though too. Before the call, I'd ask you what your Myers-Briggs Type was and you're an ENTJ, so you've got that J in the end.

Gwenn: So, I’m Judgy? That means I'm judgy, right?

Jason: Yeah. You're judgy which means you're a planner. You want things done a certain way. This details matter to you. I'm a P so I'm all over the place. I'm a bit more open-minded and I love taking you Js and cracking you open a little bit to expose you to some things you weren't exposed to before.

Gwenn: I need people like you in my life too because I can't be too in the box. It's so nice to have that fresh [...].

Jason: J from the box for sure. Ps have no box and Js look at us like we're crazy. Some of the Ps that are perceiving, that's what the P stands for, they will take in things from all different sources, all different ideas, and to most Js, that's being so open-minded, their brain is falling out. It's how Js kind of view us sometimes but we need each other. All these other different types. I definitely need Js on my team to run my email, handle my calendar, do all the planning stuff that is not fun for me. You do this virtual team thing, how does somebody start with you if they come to you and they're like, "Hey, Anequim." First, where did that name came from? What does this name mean?

Gwenn: I'm going to give you the real answer. We used to be a certified property management and then [...] wanted to sue us because they were like, "We have a certified property manager distinction," or whatever.

Jason: Designation.

Gwenn: Designation. We were like, “Well, we wanted to rebrand anyway,” because we started from nothing and took any piece of garbage that had a roof on it and then as time went on we became more sophisticated, and wanted to take out nicer properties, but in the local market, we were the low end. We already were going to rebrand, but we didn't want to get sued or threatened of a lawsuit again, so we were like, "We have to have something that's totally unique." Well, it's very hard you guys. It's so hard to find something completely unique. My husband's a pilot for fun and so he loves this airplane called Anequim and it means mako shark in Portuguese, anyway that was like a word we could use that was unique. We got Anequim and then Wistar Group. Wistar is my middle name and they were unique enough that my best friend who is a patent attorney approved them. For better or worse we're Anequim and Wistar Group.

Jason: There you go. Alright. Portuguese mako shark.

Gwenn: It's also an airplane.

Jason: Which has nothing to do with Mexico whatsoever. They don't even speak Spanish.

Gwenn: But I'm not going to get sued for it, so you know.

Jason: No, it's perfect. It's a unique and original name which is helpful in branding, right? Okay, cool. Now, how does somebody get started with you guys. Somebody comes to you and say, "Hey, I’ve got a problem." How do you know that you can help them? Because I'm sure there are clients that you don't take on and there are clients that aren’t a good fit.

Gwenn: There are. In fact, there were two clients yesterday that called me and I was like, "You know what? I think you guys just need to wait for a minute." And that is my thing. We don't sell. We try to make a relationship because if I sell you and then it doesn't work for you, then it creates a lot of heartache and drama for me because I want the person in Mexico to be happy and I want the person in the United States to be happy. What happened yesterday was, this one guy was buying another company, and they already had two employees there, but he hadn't really worked with them yet. I was like, "Hmm." He was going to be managing 400 properties. I felt like his people count was good enough for 400 properties, so I said, "Just take on these two new people. Measure processes and procedures together, make sure it works, and then when you get a handle on them then call me." He was like, "Okay. That's a better idea. That's what I'm going to do."

If you call me and it's not going to work for you, I might tell you to do a few things first. Then the other guy called me and I thought again that his head count was already too high. I thought you could make more efficiencies in his software because a lot of people only use 5% of the software that they have purchased. If you have five really expensive employees and 400 units, I kind of think you should work on being more efficient first with your software and then call me.

Jason: Yeah, right.

Gwenn: Unless, you’re going to transition things—but these were obviously, longer conversations, I'm giving you the shortened versions—so if someone calls me and they're like, "No. I need somebody. I'm working my butt off and I need some relief." Then we'll talk about a job description first because I need to find the right person for this role. I need to know what kind of tasks you want. For instance, if you want someone to be doing a lot of cold calling then that's going to be a different person than someone's who's going to be helping you associate the right invoices with the right property and the right owner, right?

We have to make sure we have a good job description. Also, your training is going to be better, it’s going to be a smoother onboarding process if you are really clear about what your needs are. Now, a lot of people will call me and they are just overwhelmed and they'll just be like, "I need a personal assistant." A lot of the times I push back on the personal assistant and I say, "Why do you need a personal assistant?" And they'll be like, "I just hate taking the phone calls. " I say, "Okay. Well, let's find someone to take your phone calls." Really, if you want a personal assistant because you are overwhelmed, think about the things that you hate doing that don't bring you joy, that don't fill you up, and let's give those to someone who's a better fit for those roles, that loves doing those things.

Usually, it starts with a conversation about what the pain point is and what people really need, who they already have in their team, and what software they are using. We come up with a plan that would actually help them get what they want. That's kind of my goal. It maybe me, it may not be me, but my goal because I come from the property management world is just to prevent burnout from whoever's calling me. Whatever that looks like.

Jason: Yeah, so you're helping them a little bit “KonMari” their time, right?

Gwenn: Yes.

Jason: And you we're talking about that before.

Gwenn: Oh my gosh. Well, I love that. Maybe I should use that, but you have so many things that you have to do. Some people are coaches and that's really important to them, their property managers, and their families. Your time and attention are two of your most important resources and everyone on your team needs you to be using those wisely if you’re the one steering the boat.

Jason: Yeah. I'm a big fan or proponent of energy management over time management...

Gwenn: Yes.

Jason: ...and really identifying what energies you as an entrepreneur versus what drains you because we really afford doing the things that energizes us, we have an endless amount of energy. Like our life and our businesses fills us but if we are doing things that drain us, burnout sets in and it's inevitable, it becomes really difficult. I think it's really important for people to pay attention to their time and what really is giving them momentum. I tell property managers all the time, “Anything that's been sitting on your to-do list for more than a few weeks, you're probably not the person that should be doing it. Let's be honest.”

Gwenn: Right. Absolutely. There are people like, you and I we are just talking about how our personalities are different. Find someone who you like working with. Who you enjoy spending time with because it isn't actually an employee essentially just living far away that compliments you and can do the things that you struggle doing. Our role is to help people do that and we also train them on the first day so I have very high anxiety. I take care of things that make me anxious. I always go over the four ways people can die in property management on the first day, carbon monoxide poisoning, natural gas explosion, fire, and a technician being mistaken as an intruder and getting shot, and the importance of asking permission to enter.

Those are four things we go over, which is really funny because when we turn over the training to the client, my assistant will always be like, "So, what did you learn in training?" And they're like, "How not to die in property management." The clients are like, "What?" I mean, I told them that we were going to talk about that with the agents but people forget and they're caught off guard.

Jason: Four ways to die.

Gwenn: Four ways to die, but those are really, really important and it really does happen. And our industry, there's been a number of deaths that we're all aware of, and so it's really important whether you're going to hire someone remotely or not to really discuss what bad things can happen, and how to make sure they don't happen in on-boarding training.

The other thing we cover is Fair Housing and American Disabilities Act. That really should be trained every year if that's not on people's schedules for training. Domestically, I don't do this with the remotes, but domestically at our property management company, the other one is sexual harassment prevention training. We have a 70-year-old sales guy and then we have a 21-year-old front office lady. When you have multi-generational employees especially what they think is appropriate is totally different. It's important to discuss that because people aren't trying to be jerks, and they're not trying to be bad people, and they're not trying to offend anyone, it's just that what was totally appropriate in 1950 to talk about in the workplace is different. Also, on the 21-year-old side. I mean, 21-year-old sometimes think everyone's their best friend and they’re hanging out at the bar and it's not true. Having that conversation at the beginning of a relationship with any employee is important.

Jason: Okay. Fair Housing and Disabilities Act, sexual harassment training, and four ways to die in property management.

Gwenn: Yeah. If you're going to be using webcam, here's another thing. I did have a client who thought that it's totally appropriate to train his new employee without any clothes on, so a word to the wise, keep your clothes on if you are going to be training somebody. People, sometimes just don't know, they just don't know. I'm sure it was hot, it was summer, maybe went out to the pool and came back. It was really not okay. It's another thing to keep in mind.

Jason: Policies improve overtime. You know there's something interesting if my webcam policies say, "Don't be naked." It doesn't say that yet. We haven't had that come up yet, but if it does happen, we'll definitely have that in.

Gwenn: Yeah.

Jason: Yeah.

Gwenn: I mean, I had no idea that's going to be an issue but...

Jason: Right. You never know until it happens. I think that's how all of the property management contracts evolved over time. Like, "Oh, this one's a weird new situation. Let's avoid that in the future and write that into our contract."

Gwenn: Right.

Jason: Okay. Somebody comes to you, you start them with some of these things, how are you vetting these Mexican employees, these team members? What are some of the things you go through to ensure that you're getting a good match, you're finding somebody who's really a good fit for a position? Help those that are listening feel safer using Anequim to find them a team member.

Gwenn: Sure. The first thing is that they have to fill out an application and upload a video of themselves speaking in English about their hobbies. You find out a lot about people when they think it's appropriate in a video to say about their hobbies and how good their English level is. It also demonstrates that they have some technological ability because they have to upload a video.

Jason: Right.

Gwenn: We get rid of a lot of applicants right there. If they make it through those two steps, then we have them take a personality test. We use the Culture Index, and the Culture Index indicates whether people have detail orientation or not. Generally speaking, unless I'm hiring for marketing position or outside sales or something, we are going to need detail orientation. We look for that. There are few personality types that we just don't hire at all and we also have a logic-emotional continuum. Anyone who's really low on logic also not pass to the next level.

After that if the make it there then they do an initial interview and it's a pretty tough interview. Ensures they have the qualifications and the seriousness that we are looking for. Generally, the pool of candidates that we are looking for have worked previously for a large corporation. So, in the towns where we primarily source our candidates, they work for Nissan or GE or Hewlett-Packard or TATA Consulting, and there's some really big names where they've already one through a lot of the training that you wouldn't need to train a brand new person on. But they've already been through it so they know how to talk on the phone, they know how to deal with conflict in a professional manner, and they know how to write an email. We do benefit from all that corporate training many of our folks have already been through.

Jason: Okay.

Gwenn: If they make it through the interview then we are going to start calling their references and just make sure those show up well. After that, our clients, if they've made it through all the interviews, we’ve decided this person is worth this amount of money. We have a paying scale based on education level, work experience and we know what kind of job they would fit into then we match them with our clients we have who are looking. The clients get to look at three different candidates, and see if this is a cultural fit for them and if this is someone that's going to work on their team, and that they're going to feel comfortable with on a day to day basis. We always do the interviews in threes. Hopefully, we do our job well enough on the first three know exactly who we want, but if you want to do another round, our job is to make sure people are happy with their candidates.

The one negative about working in Mexico—and this is going to be with a lot of the country that you would source from—background checks, it's not the same, there's no government database and even if there was it probably won't be accurate in the way that you and I would expect, so there's no background check policy or way to even do that if you wanted to. We rely a lot on internal references and those networks or people want to give us their best friend and then they internally hold them accountable as well.

Jason: Yeah.

Gwenn: We haven't had any issues with it, but I would suggest with anyone working remotely, you manage your privileges and your software. Rent Manager allows me to obscure social security numbers, credit card numbers, and we have a policy that nobody working from home has access to those, and you have to be in the office if you are going to be taking credit cards or looking at social security numbers. If you have good tight privileges, you don't really have much to worry about by hiring someone remote, and it's just a good policy anyway.

Jason: Yeah. Alright. That is kind of the match making process.

Gwen: Mmm-hmm.

Jason: Then once they pick a candidate, what's the transition like this on the onboarding sort of process and how far does Anequim gets involved? Because I know some property managers are not probably used to having a virtual team member, they are probably going to make some mistakes, they might just say, "Hey, this virtual stuff doesn't work. I don't get it." How do you ensure that the transition is going to be healthy?

Gwenn: First of all, we try to get a good plan on before we even get to that place. We have documents on ideal first two weeks of training and talk to them about what that process looks like, talk to them about technology, what kind of phones do you use. We recommend that you listen to calls if you're going to have someone who's the face of your company, and you're not going to be able to overhear them when you walk in the office. Here's a form on monitoring calls and here's the portal so you can see their screenshot and their keystrokes. We try to do all of that before the commitment takes place.

Talk about what that looks like, so that when the commitment like, "Yes. I want to move forward," happens they've seen in their minds, "I kind of have an idea what this looks like." We don't want for either the client or the agent to get to a place where it's the first day and they just look at each other in webcam and go, "Okay, what do I do now?" We try to avoid that situation as much as possible, which is why we’re not trying to hard sell anyone. We want someone to be committed to the process and feel somewhat confident.

Obviously, you're going to be a little bit nervous if you've never done this before, but that's why we are here to hold your hand, and give you that documentation and talk you through it so that you feel more confident before it actually happens. But then, on the handover meeting you're going to get all of them setup on their computers. You're going to get them to know everybody on your office, taking the laptop around and you're going to say, "Tell us something that people don't know about you." Or, "What are you grateful for today?" You know, a little icebreaker and then you'll get into the tasks.

The great thing about working with Mexico is that they're on your time zone. Do you have to be perfect? Do you have to have the perfect documentation? No. Because like any other employee that you hire, you can just say, "Okay. I'm going to show you how to do this." They know it should be written down but it's not, "But you're going to help me write it down because I never had time to do this before. Here's the software where were writing it down. Here's how you're going to get a screenshot using Snagit. I'm going to video record myself going through this process and then make it a pretty process for me and then when it's done and it's all pretty, then you're going to do it." That's possible. Some people are further along in their processes and procedures than others, but by no means you have to have things perfect to move forward to the remote assistance.

Jason: Yeah. The Myers-Briggs people with Js a lot of times get really caught up to being perfect before they move forward. They're like, " I have to have every process documented before I could grow my business."

Gwenn: No, that's not the real world. I would say progress not perfection, right? I mean, you have to move forward. I'm reading this great book called the Billionaire Coach or the Trillionaire Coach, I think is what’s it called. It's really good. It's on my audible right now. But the guy is like, "Okay. Once you have things down, you have to go, and you have to go fast." I think that sometimes the people who are really into perfection lose sight of go, go fast, so it's always that balancing act. If you're not good at processes and procedures then hire someone to help you do that and just show them on in a video and say, " Okay, for the next three hours you're going to write this down. Okay? Then I'll check in on you in three hours and see how you're doing."

Jason: Yeah.

Gwenn: That's totally okay.

Jason: I like that. Progress over perfection, so what I teach clients is, "Done is better than perfect." It's very similar.

Gwenn: It is.

Jason: Done is better than perfect. Get it done, you can always redo it later. You can make it better the second time around but having something is better than not having it. The other thing that I'll throw out there, sometimes is that perfect businesses are out of business. So, don't try to make everything so perfect before you move forward. It's the businesses that fail, that make mistakes, that rapidly prototype, that try stuff out and see what doesn't work, they're the ones that move forward faster.

Gwenn: And when you have that hard day where things really did fall apart then just go back to the values. Like, "Okay, it fell apart, but I'm suring it up as a value, as a person with values. So, what does that look like?" If you have your values strong and you’re connected to them then when you mess up, if you just go back to that, you'll be fine.

Jason: Right.

Gwenn: That's how I look at it at least.

Jason: That's the foundation.

Gwenn: Yeah.

Jason: A really strong why and set of values for the business. That's what creates culture in a company. Well, cool. What are some of the questions that property managers ask you that I haven't asked yet? Some of the frequently asked questions, concerns, considerations.

Gwenn: The main thing is the role. People are just like, "Okay, everyone's doing VA and I know I should be doing it because I'm just supposed to be more profitable than I am right now, but where the heck do I get started?" Usually, when people ask that, I just tell them because we've been doing this since 2008, how our company is organized because I do feel like we do remote labor as high of a level as you could. You might structure it slightly differently but just to give people an idea because the thing is in people's minds and eyes, they remember virtual assistance. They think, "I need my processes to be perfect. This is someone who can only do route activities, can't think outside the box." All of that is not true. These people from Mexico, can be, if we hire for it, highly educated. We even have some professors on the team. We have some attorneys on the team. Highly-educated people who most certainly are capable of thinking outside the box. Guadalajara, where we source a lot of the people, it's the tech capital of Mexico. When I go to the Christmas Party in Guadalajara, people are speaking Spanish, English, French, Portuguese. It's like an international gathering, like any European city that you'll be at or anything like that.

Here's how we're structured. We have 1200 units that we manage. We have three customer service people residing in Mexico who take all the front line calls. We actually call them Solutions Agent instead of Customer Service Agents because they're job is to provide solutions. They don't just read from a script, but they can also talk to tenants about their statement and what it means, what's this maintenance service issue, maintenance charge is for, and help people break a lease, give them information about breaking a lease, changing roommates, tell them if they could have a puppy or not. Actually solve problems that give solutions. They also take all the maintenances services issue and troubleshoot.

The great thing is that you don't have a PhoneTree when you call into our office. You just get a person which is a really good customer service. Most property management that I call have a PhoneTree and then you still can't get a hold of everybody. Thinking about what the experiences of an owner calling your main line, and what that feels like, maybe important in many of the markets that people are in.

Once someone takes their phone call, any elevated issues will go to the assistant property manager. Let's just take a simple thing, it's not even elevated but like a service issue. We’ll go from customer service agent, we'll take everything from the service issue then it goes to what we call the virgin list, the assistant property manager review that—and we have three of those, by the way, one for each property manager has an assistant who's a true assistant—and they look at all the service issues that come in and decide whether our internal maintenance team can handle it or if it needs to go into a vendor.

If it needs to go to a vendor then they're in charge of putting a budget on it, and based on the contract, whatever the owner wants, and then signing it to a vendor and then following up on that. If it goes to our internal team, then another woman in Mexico who's the Maintenance Dispatcher decide whose list it goes on out of the 15 maintenance people that we have. Her job is to manage those guys' schedules and make sure they're busy. Make sure they have work and make sure that they're going to a place that makes sense.

Then other people that we have is accounting. We have two people in accounting and collections. They don’t just do accounting but they're also are like, "Why is this maintenance guy going to store three times in a day?" He's like actually analyzing the invoices and saying, "This price doesn't make any sense." We have two people there. We have Applications Underwriter who does the applications in Mexico as well and a marketing person in Mexico. I feel like I'm forgetting somebody. I think that's it.

Jason: Anything on the sales BDM side?

Gwenn: No. My market, we get a lot of business just coming in the door so we don't have a BDM. We have some sales people that are on a commission basis but we don't have an official BDM role. We actually decided not to get one this year which is weird because sales always pay for itself, but when we look at the numbers in our market, it didn't make sense to get someone at that price point. Instead we’re buying a company in another market and growing that way, but that deal's not totally done yet.

Jason: Right.

Gwenn: Those are the people that we have in Mexico. Internally, we have a front office lady, a leasing agent, operations manager, a maintenance manager, and right now, we only have two property managers. And then my husband runs the company and puts his finger in everything. That's pretty lean for 1200 units, it's pretty a lean shop.

Jason: Yeah, that's really lean. Then you have a pretty decent process documentation, I would imagine as well.

Gwenn: We use SweetProcess, where we house our processes and procedures and we’re kind of obsessed with it. We use EOS so we’re using the traction book. We've been doing that for 2 ½ years now and love it. That's how we stay organized and set our goals and priorities and make sure that we don't get lost in the day to day task and know where we’re going on a daily basis.

Jason: Yeah. I think every business, eventually, as they evolve, they need a planning system which you had mentioned EOS. Every business also needs a process system, some system for documenting process and leveraging these processes. We use Process Tree internally, which works out really well.

Gwenn: And I like Process Tree, but it's more expensive than SweetProcess. It depends on what your needs are, but I would recommend looking at both and determining what's better for your organization. But yeah, I like both those systems a lot.

Jason: Every business needs some sort of communication system in the business as well. As a team, we use Basecamp as our communication platform to communicate internally, and then you need a client supporting communication system. A lot of people are using Help Scout or Intercom, or one of these knowledge based support systems. There's probably other systems. I'm forgetting off the top of my head, but business really need all these different systems in place. Once you have these systems in place, it facilitates and enables your team to really do well and communicate and understand where the company is headed and get in alignment with your vision and your goals. It's a big deal.

Gwenn: Yes. There's a lot to take on, but again, people don't have to be perfect.

Jason: Yeah.

Gwenn: Because when you say that it's like, "Oh my god, that's so overwhelming." But it doesn't have to.

Jason: One thing at a time. Yeah.

Gwenn: One thing at a time, Yeah.

Jason: Cool. Cool.

Gwenn: That's why I like EOS though because it takes that overwhelming. The, "Oh my god we have 10 million things we have to do this year," and it forces you to say, "Okay. How much energy do we really have and what are the priorities out of my list of million things that I'm going to do in these three months?" It actually helps you get more of that done than you would if you just look at the long list.

Jason: Yeah. It has an etymology that's very similar to a lot of business planning systems and most every business planning system has annual objectives, quarterly objectives, monthly, and these things break down and the idea is, "How do you eat an elephant? One bite at a time."

Gwenn: Right.

Jason: It’s like these elephants, you break them down in a 90 day, 30 days, and then even weekly commitments as a team. But a lot of business don't have any sort of planning system in place, so they're hitting zero objectives because they really don't really have any, and there's no clarity around it. They’re just winging it and the entrepreneur's, they're crazy. Entrepreneurs come into the room and says changes every week, "Hey, guys. I got this great idea." And they lob a grenade in the middle of the room, pull the pin and lob this grenade and walk out. They're excited and pumped out and the team are like, "What are we going to do with this thing?" Having those systems in place can be really helpful especially if you have virtual team members because then it makes a lot of difference for everybody to be on the same page.

Gwenn: People, historically, have thought like, "Oh, were going to do all these planning and then we'll tell them later what we planned." But I recommend having the virtual team members in on all of those meetings.

Jason: Yeah.

Gwenn: Here's one tip that has really helped us. We have the three customer service agents. Every morning at 10 o'clock they meet with the Operations Manager and just say, "Oh, this person is out of the office today. They have a dentist appointment at 2:00 PM and it's whoever's birthday. Our swing thought for the day is people can hear you smile. In the call monitoring, I've noticed that there's not been so much smiling on there, so let's keep that in mind for today. Today's contest for online reviews, we’re still giving $50 certificates to anyone who gets an online review." Whatever you have going on and just touching base for 10 minutes a day makes all the difference for someone whose remote. When you have your weekly EOS meeting, include them and what you're talking about. If they feel included in the process and in your mission, people don't leave. We've had the same employees at Wistar Group for six, eight, I think, is it nine years. I think we have two employees who've been with us for nine years.

Jason: Yeah.

Gwenn: That's the key to getting the virtual or the remote members totally immersed in your culture.

Jason: Yeah. They need to be a part of it, ironically, right?

Gwenn: Absolutely.

Jason: Yeah. I'm a big proponent of making sure that your team members are involved in outcomes instead of being micromanaged. Give them outcomes and let them innovate and you'll be surprised with what they can come up with. It might not be the way you would do it, it might be better. A lot of times, as entrepreneurs, we think we have it all figured out. We need to tell our team members, "Here are the steps. Do this exactly this way."

When it comes to goal setting, goals are outcomes. Assign an outcome to somebody, let them own it, and I think you'll be surprised at the results they can create. Getting your team all involved in it, some of those meetings have been really eye opening for me because I had my set of ideas. I thought this is how the whole world looks and then I went around and asked my team members, "Here's this outcome. What ideas you guys have that can do it?" My graphic designer has a totally different idea than I would have. My head of fulfillment has totally different ideas than I would have. They bring this perspective and all these ideas were really good. I'm like, "Yes. We should do that, maybe not that, that one's great." I think you don't want to be the emperor with no clothes running a company. That's how you do that, is by allowing your team members to have a voice and be involved in the process.

Gwenn: I love that. Actually, we teach a version of that on the first day of training. Its form this article that you can get on the internet called Who's Got the Monkey.

Jason: Okay.

Gwen: It's the number one reprinted article from the Harvard Business Review of all time. I only came across it out of massive failure years ago. Where I took my team members out to lunch and I thought they would tell me how much they love their job and they were like, "No! We don't love it. You guys never listen to us." I was like, "What?" They're like, "Yeah. We don't even bring up ideas to you anymore because you are never going to listen to them anyway." I was like, "Oh my god. This is terrible."

I found the article on the internet and we came and have a change management process. We asked our team members to own their ideas. The first steps are people come to meeting and say, "Hey, not all ideas are good ideas, but here's my idea." That allows people to save face and be vulnerable and say what they're afraid to say in the meeting. Then they have to bring everything to the meeting—the subsequent meetings—to move the idea forward...

Jason: Yeah.

Gwenn: ...so that the decision maker can just say yay or nay. Sometimes, there's a little homework on the decision maker’s part, but we try to make it as minimal as possible. I take it from sale, in sales people are always eternally optimistic and they think everything's going to close. My way of determining if it's going to actually close or not is, "Is your name on the prospect’s calendar for another meeting? If it's not, then your deal is dead." Just black and white.

Jason: Yeah.

Gwenn: If it's not there, you can revive it, but you better get a meeting out there. Same thing with ideas, "If your name in this meeting is not on anyone else's calendar, your idea’s dead." Just know that because when people feel badly about their job, when they get vulnerable, they say it and their manager is like, "Oh, that's a great idea," and then they wait three months and nothing happens to it, that really hurts morale. Giving them the honest, "Hey, it’s not moving forward if there's not a meeting"

Jason: Yeah.

Gwenn: And having them own that helps give them agency over their idea.

Jason: Yeah, I love it. Cool. Let's wrap this up, Gwenn. I think this has been really helpful. I think we talked about some really cool ideas. I think, hopefully, some listeners are a little bit more open to having some team members that are not sitting in their physical office. How can people get in touch with you if they are interested in learning more?

Gwenn: Well, I'm on Facebook. If you want to send me a message at Gwenn W. Aspen, I'd love to meet you there. Additionally, we have a website anequim.net and you can fill out a form, we'll get right back to you there, or you can email me at gaspen@anequim.net. But we love to help people, and like I said, if you just want to bounce ideas off whether this is a good idea or not, we can talk about your specific situation.

Jason: Awesome. Gwenn, thank you so much for coming into this show.

Gwenn: Thank you, Jason. It's been so fun. I really appreciate you having me.

Jason: Alright. We'll let you go now. Alright. Bye, Gwenn.

Gwenn: Bye.

Jason: So, there you have it. Check them out at anequim.net. For those that are listening for the first time or checking us out, we really appreciate you subscribing. If you’re listening on YouTube or watching on YouTube or listening on iTunes, we would appreciate—if you are on iTunes—you give us your feedback. We would love to hear your real and raw feedback. Again, give us a review on there. It will be really helpful especially if you liked the show. We would love that, that gets us excited. Then make sure you get inside our community which is doorgrowclub.com. This is a Facebook group where you get to hang out with other property management entrepreneurs, all the Door Grow Hackers, connect with us, and see future episodes. We livestream these episodes into that group so you won't miss a beat. Check us out there at doorgrowclub.com. If you are interested in growing your business then reach out to us doorgrow.com. We would love to help you and see if we can help you grow your business. Until next time everybody, to our mutual growth.

Download this Episode

Jul 2, 2019

In the United States, millions of residential properties are owned and rented out by individual landlords, not professional property managers. Why not protect yourself from painful experiences with tenants, have peace of mind, and leave it to the professionals?

Today, I am talking to Dave Holt of SureVestor, which provides Scheer Landlord Protection. This insurance plan financially protects landlords and property managers from tenant-related risks. SureVestor is at the forefront of leading a trend that can significantly help grow the industry.

You’ll Learn...

[01:45] Passion for Property Management: Dave joined NARPM nearly 30 years ago and has gone through its entire chain of command.

[02:51] Reasons why Scheer Landlord Protection was brought to America:

Significant growth impact on property management industry in Australia
Way to make, but not lose money
Opportunity to turn self-managed landlords into professional property managers

[05:22] Is the United States ready for similar level of growth? Whether companies grow exponentially, or at their own pace, insurance can help them get there.

[07:06] Can't control what happens in people's lives; when bad things happen to good tenants, property managers experience frustration and stress.

[08:05] Who’s to blame? Things happen that create a financial burden; Scheer Landlord Protection covers income loss for landlords and property managers.

[09:32] Malicious Damage by Tenants: Insurance covers holes in walls, cabinets ripped off walls, sand poured down drains, etc.

[09:47] Blanket of Coverage: Indirect and direct benefits create safety for all parties.

[13:45] Property manager requirement helps insurance company mitigate risk.

[16:33] Competition: Focusing on criteria of quantity over quality. Most property managers don’t have an insurance license; be compliant and legal to protect industry.

[22:40] Tiered Pricing: Clients know the cost to be protected.

[24:58] FAQs: How do I market this to my owners? How can I implement it? Follow SureVestor’s steps to success.

Tweetables

Scheer Landlord Protection: Grow exponentially, or at your own pace.

When bad things happen to good tenants, property managers get stressed out.

For most landlords, rental property is their most expensive investment.

Scheer Landlord Protection: Covers malicious damage, eviction costs, and loss of rent.

Resources

SureVestor

Dave Holt’s Email

Dave Holt’s Phone Number: 612-465-0421

SureVestor’s Blog

National Association of Residential Property Managers (NARPM)

U.S. Department of Housing and Urban Development (HUD)

DGS 84: Roof App with Tyler Hayes and Joao Ritter 0

Transcript

I have a guest today named Dave Holt. Dave is here talking with me about landlord protection insurance from SureVestor. Dave, welcome to the show.

Dave: Thanks, Jason. I appreciate it.

Jason: I just got to see you at CALNARPM in your British soldier outfit that you had there. I want to connect with you a little bit here. Give us a little bit about background on how you got into this industry and into this space.

Dave: Yeah, you bet. I've been in property management, that's really my industry. I've been in the business for over 30 years. I started managing for HUD back in the mid-80s, got introduced to property management in single-family homes, and started my fee management company in the late ‘80s. That's where I ran into a fledgling organization that was just starting out called NARPM. I got involved with NARPM early on. I actually started in 1990. I've been a member ever since and gone through the whole chain of command there.

Property management is my passion. Throughout that whole process, I've met with thousands of property managers throughout the years. Like you, Jason, always looking to see how we can improve the industry and came across an opportunity. We're actually teaching over Australia. Both my partners, Kevin Knight and Todd Breen, had taught over there.

We came across a product that was over Australia and had been there for 25 years. We're wondering, "Why isn't that here in the US?" Actually, long story short, joint ventured with the creator of the product from Australia, Terri Scheer, it still sells under her name over there, Terri Scheer insurance. She has since sold her business over there. Now, has joined forces with us to bring the product here to the US.

Jason: Awesome. My understanding of that is that this product has significant impact on the growth of industry as a whole in Australia.

Dave: Yeah, that's very true, that's one of the reasons why we wanted to bring it here, it's not just something, "Hey, here's something that we can make money doing," that really wasn't the crux of what we bought it here for, and you hit it on the head.

What we look at in our industry here in the US, it's 15 times the size of Australia. When you look at the number of properties that are owned here by individual landlords, it's over 15 million single-family homes that are actually owned and rented out, a small fraction of those is handled professionally by us professional property managers. If we have an opportunity to bring a product here that can help drawing those self-managed landlords to us as professional property managers, that's what we're looking to do.

Over in Australia, that actually happened. About 15%, increased in the business for professional property managers because the beauty of this product is that it's only available for landlords that are professionally managed and we did that intentionally, we did that over in Australia as well. Those self-managed landlords have to come to us as professionals in order to get this product. Hence, we're looking to be increasing the number of properties that are managed by us, professionals.

Jason: Now, I have heard stats thrown around like the property management industry in Australia grew about 25% in a single decade. I don't know if that's accurate, but that sounds pretty incredible. I also have heard that they have about 80% of single-family residential is professionally managed.

Dave: That's right.

Jason: Here in the US, according to the [...] report, we're at about 30%. If the industry here could grow in a decade to maybe about 25%, that would mean that we would pretty much double in size. I don't think there are enough management companies in the US right now that can handle that level of growth. That would mean we either need to double the amount of companies that exist now—that's a lot—or each company would need to double in size. I think that would be incredibly painful for most business owners.

Dave: Maybe, maybe not. Obviously, your DoorGrow hackers are looking to be growing that's why they're part of your endeavor. It's not that they have to grow exponentially, but they can grow at their own pace. Certainly, it's something that, if they can use the insurance to help them get there, that's what we're all about, and looking to help them do. Yes, we saw it happen over Australia, we don't see why we can't replicate that here.

Jason: Let's break this down, and help people understand. Maybe we start from the point of, how do you sell this product, but let's first talk clearly of what is it. What is SureVestor? What is this insurance product? Then I would love to get into basically talking about what's in it for the homeowner? How do you sell this to them? We get into those two things, and then I think the light bulbs will start to go on, and they can start to see how this can be a facilitator of growth here in the US.

Dave: You bet. It's probably better to start from my experience as a property manager. Obviously, we're all property managers. Really, the frustrations that we've experienced, as property managers over the years, is when bad things happen to our good tenants is really the situation. It's very stressful. We know that we do a professional job of screening our tenants and getting the best quality tenants for our landlords, but we can't control what happens in people's lives, whether it's a job loss, a divorce, a death in the family—things that can happen in someone's lives that create a situation of financial burden. Now, all of a sudden, if they're renting a property, they may be more inclined to skip or stay there, and not pay the rent, and now, we have to evict them as professionals. It's very painful.

For a lot of us in the single-family space, those owners owned one property. If something bad happens to their tenants, and now all of a sudden they're out of three months of rent because of it, that's a lot of their income. A lot of them say, "You know what, this isn't for me." They decide to sell or worst, they blame us as the property manager because we're the ones who screen the tenants, and they say, "It's your fault that this happened. I'm going to somebody else." In either case, we've lost the business.

If we had a product, which we do now, through SureVestor and sure landlord protection insurance, that covers the loss of rent for those type of things; a tenant skips, they have to be evicted, they are victims of violence—we've had that happen as well—or there's a death of a sole tenant, or murder, or suicide. I've experienced all of those over the 30 plus years of business. That rent then is not paid, and our landlord is out of money. Us, as property managers, most of us are charging our management fee based on the rents collected, and if that rent isn't collected, we're not getting paid either. This insurance covers all that. It covers it for the landlord. It covers it for the property managers as well.

Then, there are some additional benefits. Malicious damage caused by the tenants, that's something that we've experienced as well. They punched holes in the walls, ripped cabinets off the walls, they pour sand on the drains, things that are malicious, there's coverage for that. There's coverage for theft and damage due to theft. There's the eviction fees and legal offense if the tenant brings it to trial. There's the covering of the sheriff cost if you have to get a writ and go through that whole process. We even have lockbox coverage for a digital lockbox. For property managers who are now doing self-showings, many times, they get some pushback from their landlord clients about doing that because of, "Well, what happens if." Now, there's some coverage for that as well and then, rekeying of the locks after those covered events happen.

It's a way where we can, with the insurance, make that landlord whole and also make us whole as property managers. One other thing too, a lot of us as property managers are guaranteeing our tenants for some period of time. If something does happen to that tenant and they breach the lease, we will re-lease the property for nothing, for no charge, for our landlord. Now, when you have insurance that covers the loss of rent, the malicious damage, the eviction cost, and those types of things, you now have the security deposit available to cover your re-leasing fees among other things.

Jason: There could be divorce, job loss, death of a family, violence, malicious damage, malicious damage theft. Then things like, eviction fees, legal fees, writ fees, lockbox coverage, rekeying after theft. It really creates this safety for all parties involved.

Dave: Absolutely. When you think about it, for most of our landlord clients, their rental property is the most expensive investment they have. They get dwelling coverage because that's all they know. They get dwelling coverage to cover the catastrophe-type of damage, the fires, and things that can happen to the property. The things that happen more frequently are the things that we're covering—the loss of rent because a tenant skips, they maliciously damage the property and the other things that we went through. Why wouldn’t they get coverage to give them that peace of mind, so when those things happen to their tenant, now, they're protected as well?

It gives them an overall blanket of coverage, that gives them that peace of mind so now, they can rent their property with confidence, and hopefully, stay with us as property managers longer because they don't have to have that fear of, "What if?" Because now they're going to have coverage for that. Hopefully, draw in more landlord clients that might have that fear. Some of them decide, they just want to sell to begin with because they go, "You know what? I can't afford a loss. I can't afford one of those situations that happen, and now I'm out of rent, and I've got a mortgage to pay." It's a way where we can keep new owners and a way where we can attract new owners as well to us.

Jason: Yeah. Creating this blanket of coverage sounds really significant and important. If it's not there, then even having a rental property investment can be a risk. Maybe it's a risk that a lot of property owners are either ignoring or aren't aware of if they're actually involved in real estate investing. There's a lot of self-managing homeowners that are like, "Oh, it's easy. I just need a tenant." Famous last words. Then they start running into problems, but even for property management business owners, you don't want to be the fall guy or gal for those problems when they happen, you want your business to be healthy.

Since this is so important, to have this blanket of coverage, as you call it, and it has such an impact in Australia, is this something that only property managers have access to, why don't people just go and get these policies directly and self-manage, how's this driving people towards property managers?

Dave: We have purposely set it up where individual landlords have to go through a professional property manager to get this coverage. If a landlord goes on to our page and looks at the, "For landlords," it actually, guides them through the process and says, "Do you have a professional property manager?" If they don't, we actually find one for them. One of our property managers at SureVestor and we refer them to them and get them new business that way, as well.

Jason: The requirement of them to have a property manager probably also helps the insurance company mitigate their own risk.

Dave: You got it. Absolutely. Over in Australia, it's been around for 25 plus years. Now, it's open to individual landlords over there now because it's a more mature product. Starting out, our underwriters wanted to kind of mimic the initial process that Australia took, which was making it available only for landlords that were professionally managed, that's something that really resonated with us, not just because of the underwriting of it, but more so, to help bring in the self-managed landlords to us, as professionals, and help us grow our businesses.

Jason: Alright. I'm going to give you an opportunity to throw stones at the competition a little bit. The competition is anything that people might perceive as something similar or reason not to use something like SureVestor. Are there competitors that just go direct or don't have that sort of stipulation that you have to use a property manager, and have some sort of insurance-like product?

Dave: Yeah. I'm not aware of it. There are some startups that are happening now. Obviously, when something’s out in the cosmos, we're not the only ones thinking about it, there are certainly other companies out there that are starting, I know a couple of them. I'm not necessarily sure that they're going direct to the landlord or not, one might be, but that's just because my thinking would be, "They don't see the risk."

But we know our business, and we’re property managers-first, and so we want to be helping our colleagues grow. One of the ways to do it is to make it only available for landlords that are professionally managed. We know that we do things professionally. A lot of self-managed landlords, they don't follow the same criteria. Some of them do, but a lot of them just do the, "You look good," the feel test. Say, "Oh, yeah. He seemed like a really nice person. Go ahead and rent my property." Then they find out it's not so safe after all. We decided not to do that. We wanted to have it available just for the landlords that are professionally managed.

I can't comment on any competition that's doing it, why they do that, other than, they just want to try to get as many as they can, they're focused on the numbers. That's not our intent. Our intent first is to provide a great product to our property management colleagues that can help them retain landlord clients, and help them bring out new ones.

Jason: Right. I would imagine that since you've got these different parties involved, you've got property manager, you've got renter, you've got homeowner, and then anybody else could get into the mix in any of the drama that ensues with all of these—this really reduces the risk for all parties. I imagine there's products out there that look similar on the surface, but somebody's getting the short end of the stick, I think that would be dangerous. Regardless of who that is, it's going to end up as a problem for everybody. It makes sense that you guys are doing it right, focusing on making sure that this, really is, the best option for everybody involved and that a professional manager is involved in this process.

That's exactly right. We have vetted this thing over three-and-a-half years. It started from the foundation and make sure that we had everything in place to make sure that our industry is covered, and we're providing the best quality to our landlord clients. That takes a lot of work getting that together that's why we have the world-renowned, Terri Scheer, started this. This whole thing. I mean, every single company has mimicked what she's doing, if there are any copycats around because she was the first. We have Lloyd's of London as our underwriters. The first and the largest insuring entity syndicates in the world covering this type of thing. It gives us more security and backing for our landlord clients and our property managers.

The thing that property managers, when they're looking out what other competition there is out there, they've got to be really careful when people are saying, "Hey, you can monetize this, you can make money as a new revenue stream," and so forth. Most property managers are not licensed in insurance. In insurance, similar to our property management industry, is very heavily regulated. If you're doing things that look and sound like insurance, for example, you have certain programs whether it's guarantees or other types of protection programs that you're making money off of, that can be construed as selling insurance. If you don't have a license that can be an issue.

Everything that we're putting together is legal. The ways that we're making this available for landlord clients, and for property managers, and even starting to create processes where they can benefit better from it, that's what we're all about—to make sure we're protecting our industry.

Jason: Yeah. This is a common thing. A lot of property managers, especially the more entrepreneurial ones, get really creative, and they're thinking, "Man, I got this great idea for this new gimmick or this new thing. I can sell this guarantee, this warranty, this protection." It's almost like insurance. It works almost like insurance. There are some significant red flags that they could be putting themselves into some serious legal liability.

Dave: That's exactly right.

Jason: They're basically, doing insurance without a license. You need to be careful. You guys help them do it the right way. Now, you had mentioned, they're doing it to generate revenue. Now with your service, property managers can make some money too, right, they're not just lowering risk?

Dave: When we're saying making money, the benefits are more indirect than direct. For example, as I mentioned, when the rent isn't paid, the management isn't getting their management fee. When the insurance is covering the rent, now the rent is paid because of the insurance, the property manager collects their management fee. Yes, that's a direct benefit, that's income to them.

Most of the property managers have some sort of guarantee for the tenants, as I mentioned. When something bad happens, and they have to re-lease the property, that's a lot of out of pocket for them. Now, when the insurance is covering that loss of rent, that deposit doesn't have to go those things which it typically, does. Now, you have that deposit available to pay the re-leasing fee that the tenant would otherwise owe you as a property manager. You're making money indirectly through that.

Here's another idea, Jason, that a lot of property managers, including myself, we'd gone to tiered pricing. What tiered pricing is that you have different levels of pricing for your landlord clients. Usually, your first tier is leasing-only, your middle tier is your traditional management, so it's an a la carte, you're paying for whatever service you get, your management fees, your lease fees, your inspection, your evictions—all that stuff is an additional cost. Then you have your top tier and the top tier is an all-inclusive or mostly inclusive, type of tier. You can charge more for that tier.

What property managers are doing is they're paying for the insurance in their top tier, and so it makes that top tier more valuable in the eyes of, obviously, of the landlord client. That landlord goes, "Well, I mean, I can pay this amount and know what all of my costs are. I can get the insurance to cover in the event of a bad thing happening to my tenant." That's a more predictable result for an investor. They know that cost, they know that they have the protection, and that gives them that peace of mind. That's a process that a lot of property managers are going to. In the top tier, even though you can't upcharge the insurance, you can charge higher to be including all of your charges, all of your fees, into one.

Jason: Got it. They fold it into that. Makes sense. In that situation then it becomes an additional value add that allows them to sell their services at a higher price point.

Dave: You bet. The insurance help do that and they make more money, you bet.

Jason: There you go. Alright, awesome.

Dave: Lastly, we are in the process of creating a way where we can legally compensate the property managers. It's something that they're not prepared at this point, to go through in detail, but I would welcome property managers to contact me. I'm more than happy to go through that process with them.

Jason: Cool. Okay, great. What are some of the most common questions that you're getting from people that are maybe skeptical or concerned? What are some of the initial questions that property managers might ask about this?

Dave: The first is, “How do I market this to my owners? What do I do?” Obviously, we got two parts of that: we have our current owners, and then we have new owners. What we have done is put together the steps to help them with their current owners, for one, and help them bring in new owners. As property managers ourselves, we know we're very busy. We have a hard time implementing things because we are very busy. We get sucked into the day-to-day grind of property management. It's probably what's happening right now. It's the last day of the month. Most property managers are out there doing their move out inspections, move-ins, and doing all that kind of stuff, they're busy.

Trying to implement a new thing is always a challenge. We know that because we're property managers too. We've created those steps to help them do it. We've done it for them. We have all the email templates that they send to their current clients, for example. We have the schedule all laid out so that they can just send them out. We have what's called an opt-in, opt-out form. The beauty of that is it gives them a tool—a risk management tool—to use where they can send that out in the email. Just like here, "I'm opting in," and this is for the owner, their landlord client. "I'm opting into this coverage, and this is what I want." It's directing to the property manager, or it's saying, "No. I'm not interested at this time."

Now, the property manager has a form. Six months later, when their tenant has to be evicted, and they've opted out with that coverage, if that landlord is coming to the property manager complaining about it, they can say, "We did our duty of care. We told you about this insurance. You opted out of it, don't blame me." We have that.

We also have the disclosures and opt-ins that they use in their management agreement. Personally, even if my BDM, my Business Development Manager, who's talking to brand-new owners hasn't mentioned anything about the insurance, they see it in my management agreement. It's already laid out, and we have that addendum of it available for them and their management agreements. That's part of it.

The next part is the whole part of bringing on and using it as a point of difference for their new clients. We have scripts that they can use to help in that initial conversation. Again, we have the information that they can use in their property management agreement both—if they're just doing regular pricing, and if they're doing tiered pricing—so we have both. Then we have the marketing information that they can embed, and put on their website with video clips and so forth. We've done all of that for them, so they don't have to recreate it.

Our last step is on all implementation. We walk them through the steps of implementing it all. It's really quite simple. A lot of the marketing too, we have what we call a WDIFY, we-do-it-for-you process, and we can even help them do a lot of that marketing as well.

Many of your DoorGrow hackers may recall Darren Hunter and Deniz Yusuf because they were at your event just last year. They have put together, since they know this insurance intimately, both of them being from Australia, they have helped put together a whole orientation for BDMs on how to be better at utilizing, not just the insurance, but utilizing tools to help draw new accounts to them. We have that on our site, on our blog site. It's a whole 45 minutes of them going through with their best practices and how to utilize the insurance as that point of difference to draw in new business for them.

Jason: Cool.

Dave: There are just a lot of tools that we have to make it simple for the property managers because again, we know it's challenging for them to get things implemented.

Jason: The number one challenge in any new software, or any new system, or any new tool, is adoption. It sounds like you guys really helped lubricate that process, make it smooth, and make it easy. That's one of the biggest challenges, or complaints when people get into some new system or some new tool or service is, they just don't have the level of support that they need. That's one of the biggest challenges.

It sounds like you guys really put a lot of energy and effort into making sure that they have what they need in order to succeed. I mean, the first challenge, making sure they've got the right vehicle, it sounds like—with the backing of Lloyd’s as an underwriter and everything—this is like the premier vehicle for this. Then the next question that a business owner would have is, "Well, can I do it? Is this possible?" It sounds like you've got the support, the tools, and the resources that they need.

The last concern that people might have is what about external factors? What about the market? Could this go away? Could the government impact us? These sort of things. Are there any potential challenges there? It sounds like you guys have dealt with this stuff to make sure everything's compliant and legal.

Dave: There's really no concern there. We just expect that to become more commonplace like it has been over in Australia. For those in your group that aren't familiar with Australia, we consider it almost advanced in property management. I say that because they are even more heavily regulated than we are, it just draws to making them more professional, and so they've got to do things to protect themselves and protect their owners. They're always thinking of new ways. Hence, why this insurance started 25 years ago or so.

In a government, in a country that is very highly regulated, it's done nothing but expand. Over here, I don't see it going away. I see it expanding. I see it becoming more commonplace, especially as we're seeing after the global financial crisis, more and more, not just individual investors, but huge hedge funds coming in and buying real estate. Rental property, compared to homeownership, is increasing. As that continues to be the trend, more and more investors and landlords, in general, are going to want to protect themselves, and protect their investment because as I mentioned, it's the most expensive investment that a lot of them have, they want that peace of mind, they want more consistency, and predictability.

When you have an insurance product like this, that they can get for as little as $1 a day, I mean, come on, it's a no brainer. We really think that this will become more commonplace. It's already in the insurance industry that's very highly regulated. The things that we go through as far as auditing and making sure that everything's done right is a continual process. We have vetted this to make sure that it is done right and protecting our landlords and protecting our property management colleagues.

Jason: Love it. Most of the vendors that we handed out awards to for our DoorGrow Awards for 2018 were because they were the best in class, they were the leaders in a competitive space, that they'd gotten the most attention inside of our DoorGrow Club Facebook Group, they consistently were seen as a leader. We gave SureVestor an award, and it was for this reason because I do see this could be a game changer for the industry. We gave SureVestor, for 2018, the Game Changer Award, was what we called that award.

I think, really, SureVestor's at the forefront leading a trend and a movement that I think is going to be happening here in the US, that I think can significantly help the industry, and help grow it, and help lower the risk of investors, and help bring people to the property management space. Property managers lower risk and SureVestor helps lower risk, I think combined, it really can give the property management a much better name here in the US, where people, having managed their biggest asset or investment ever—or whatever you want to call it—that they might ever be dealing with, and keep that risk low.

Dave, great to have you on the show. I appreciate you coming on and sharing this. How can people get in touch with SureVestor? What's the next step for people that are listening or watching this later that are interested in finding it out more?

Dave: You bet. Thank you. They can go to our website, real simple, surevestor.com. They can contact me as well, daveholt@surevestor.com or they can call me 612-465-0421. Happy to walk them through, happy to guide them through the process, and answer any questions they have. We're just looking to provide a great product to our industry. We really appreciate what you're doing as well, Jason. We think DoorGrow is really on the number. We're happy to support it anyway we can.

Jason: Awesome. I appreciate it. Always fun for me to connect with other vendors and other people in the space that have a similar vision and mission for the industry, of helping it grow. Let's change it together. I appreciate you coming on, Dave. Thank you so much. I will let you go.

Dave: Alright. Thanks again.

Jason: That was surevestor.com. They don't pay me anything. I just think it's exciting. People probably wonder sometimes. Anyway, check them out.

If you are not inside of our Facebook group, you're probably missing out on the best tools and the vendors. You're probably missing out on some great fee ideas. You're probably also not super connected to DoorGrow. We would love to help facilitate the growth in your business. I would love to be your coach. I would love to be your consultant to help you do what I've helped lots and lots of clients do which is, add easily, 100 extra doors to your business.

If that sounds interesting to you, make sure you reach out to us at doorgrow.com and get inside our community, our Facebook group, community connected to this. Become a DoorGrow hacker. That is by going to doorgrowclub.com and you can join us there. Until next time, everybody, to our mutual growth. Bye, everyone.

You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. 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 at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn, and start DoorGrow hacking your business and your life.

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Jun 25, 2019

Love ‘em or hate ‘em, most of us have lived with roommates at some point. You probably split expenses and chores, including rent and taking out the trash.

Today, I am talking to Tyler Hayes and Joáo Ritter of Roof, which helps roommates resolve problems to live peacefully together and landlords easily collect rent and connect with tenants.

You’ll Learn...

[01:48] How a college hobby project created a company: A group of friends who love to design and build things, like apps, got together to foster productive communities.

[02:21] It’s good to have friends with different skill sets to make a product even better.

[03:17] Roof: A company all about people who share and make a place feel like home and landlords who make space available to those tenants.

[03:55] Property vs. Tenant Management: Does your landlord treat you like a human being or asset? Problem-solving by landlords improves relationships with their tenants.

[04:45] Pairing up to build an app: Eager to work on meaningful, real-world projects and continue to invest in them.

[06:00] What is Roof, and what does it do?

Landlord: Gets paid, makes sure home operates as expected, and creates positive renting experience for tenants.
Roommates: Share reminders, shopping items, expenses, and anything else they want to exchange while living together.

[07:28] Target Audience: Landlords handling a small portfolio of college housing; who know all their tenants by name and care about communicating with them.

[08:13] Landlords recognize that renting experiences and services they provide for tenants reflect back on them and their reputation.

[08:39] Societal trend toward people moving in together for the sake of economic efficiency; people try to live together, share spaces, and live more cheaply.

[09:26] Recipe for Disaster: Relying on one to communicate to entire household.

[10:00] Roof app revolves around sharing space between people who all share responsibility for that space.

[10:54] Common Challenges: Roof helps solve communication issues and responsibilities masked as reminders for people sharing space.

[18:09] People love interacting and inspiring one another to take risks, make the move, offer encouragement and support - Roof’s team is part of conversation/common goal.

[22:57] Plans to integrate with property management software that lacks Roof’s roommate functionality/communication platform? Too cost prohibitive for small investors.

[27:53] Future Feature: How Roof decides which features to focus on or throw away.

Tweetables

Does your landlord treat you like a human being or asset?

Roof revolves around sharing space between people who share responsibility for that space.

There's always going to be bugs, tweaks, changes—that's just the nature of software.

Resources

Roof ($20 of transaction fees for free, use code: 3875 DoorGrow)

Myers & Briggs Personality Types

Slack

BiggerPockets

PayLease

DGS 83: Streamlining Property Management with Hemlane 0

Transcript

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

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

Joáo: That’s me, yup.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Joao: Rent.

Tyler: ...rent, yeah.

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

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

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

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

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

Joao: Totally.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jason: Meanwhile, I need a kitchen.

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

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

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

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

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

Jason: The code one more time.

Joáo: Code is 3875 DoorGrow.

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

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

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

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

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

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

Download this Episode

Jun 18, 2019

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

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

You’ll Learn...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tweetables

Property management is challenging; something new happens every day.

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

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

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

Resources

Hemlane

Dana Dunford’s Email

Dana Dunford on LinkedIn

Hemlane on Software Advice

Industrial Calf Dressing - California Rodeo Salinas

Russell Brunson’s Value Ladder

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

Transcript

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dana: That sounds good, yup.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Download this Episode

Jun 11, 2019

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

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

You’ll Learn...

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

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

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

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

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

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

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

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

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

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

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

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

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

Tweetables

Fourth Industrial Revolution: Applying AI to property management problems.

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

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

Resources

AppFolio

AppFolio Acquires Advanced Artificial Intelligence Technology Provider

AppFolio Property Manager PLUS

John Burns Real Estate Consulting

Zapier

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

Transcript

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

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

Nat: Yup.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nat: Yeah.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com.

Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time! Take what you learn and start DoorGrow hacking your business and your life.

Download this Episode

Jun 4, 2019

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

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

You’ll Learn...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tweetables

Success comes with your willingness to change.

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

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

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

Resources

Melissa Prandi

PRANDI Property Management

NARPM

Tony Robbins: DiSC Personality Test

Basecamp

Voxer

Bluefishing: The Art of Making Things Happen by Steve Sims

EMDR Therapy

DGS 80: Automating Your Business with Process Street with Vinay Patankar 0

Transcript

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

And today, I have a very special guest, Melissa Prandi. Melissa, welcome to the DoorGrow Show.

Melissa: Thank you. I’m happy to be here.

Jason: Melissa, you are practically synonymous with NARPM, you helped found NARPM, you have everybody in NARPM knows you, and you have been involved in property management for how many years now?

Melissa: Thirty-seven years. March 27.

Jason: Thirty-seven years which is almost my entire life, right?

Melissa: You have to say that, yup.

Jason: Which is amazing. You have tons of experience, you are this phenomenal character and charismatic person. Everybody’s been telling me I have to get Melissa on the show. I’m really excited for you to be here. Maybe the place to start would be to why don’t you share with everybody your story? How did you get started in property management all that time ago? What crazy idea popped in your head to make you decide that [...]

Melissa: There’s a lot of crazy [...]. I have to say I started in my company March 27, 1982 as a receptionist. I came in, all of my friends have gone off to college, I said, “I’m not going to afford to go to college. I’m going to work three jobs.” So, I came in, that was one of my three jobs, I was a receptionist at a property management company. I worked there 5½ years. This is great because women love this part of the story. When I went out on maternity leave on a Wednesday at five o’clock, I went grocery shopping Thursday and Friday morning I went into labor. If you know where I live, I’m in Marin County just north of San Francisco and I had to cross the Golden Gate bridge. I got to the hospital at 10 minutes to eight in the morning, I [...] 10 minutes to nine in the morning, said, “Okay, give me my [...] I have things to do with backup,” went home the same day.

Jason: What?

Melissa: Yeah. I had this new baby boy, Matt, many people know Matt, and Monday morning the owners of my company called and said, “We’re going to sell this company. If you don’t buy it, you’re going to be out of the job.” I didn’t take too long. I said, “Oh, you know. Hmm, I have a new baby. Hmm,” and I’m going to have two new babies.

Sure enough, I made arrangements. I went to my dad and said, “Dad, I want to buy this company.” He goes, “Really?” and I said, “Yeah, I want to buy it.” He said, “All right,” and I said, “Well, I need a loan.” He goes, All right, I’ll give you $3000.” But the [...] you can’t do is go to a bank and get a loan, so I had to get very creative with this brand new baby and a brand new company. That was 37 years go.

Jason: That was quite the adventure. When an entrepreneur personality type is given a challenge like this, you had a clear outcome, clear objective, you were going to get that company and you had all of this pressure. Entrepreneurs in those moments, like we, light up and something magical starts to happen, right? And it work out for you.

Melissa: I guess so. [...] I’m still sitting here and [...] NARPM, still doing property management.

Jason: Great. Maybe share a little backstory on how did NARPM come to be? How this this come about?

Melissa: It’s an interesting story. I wasn’t one of the original 100 that were in the charter of NARPM. A handful of people got together and they were actually exchanging software challenges. [...] own a software company at the time which is no longer, and they started talking about their best practices. They all kicked in money to start NARPM. I’m 25 years in NARPM, so you can imagine that’s pretty much a part of my life.

Jason: Quite a while. Our topic today is building your business and team. At your business, Brandi Property Management, I would imagine that you have a pretty awesome team after all this time. A lot of people this is a big challenge. I’ve talked about this on the show before but there’s these two sand traps I’ve noticed in property management.

The first sand trap in growth is around 50 or 60 units. This is the solopreneur sand trap. That’s about as many doors as they can handle on their own and they get stuck. Sometimes, they back themselves into a financial corner, they don’t have enough revenue to hire their first person, they’re managing as much as they can handle, they’re losing doors as fast as they’re getting on, and they’re stuck.

For those listening, if you’re stuck in that, talk to me. We can help you get past that. If you break past that 100 door barrier, I found that by default they end up in the next sand trap, which is the 200–400 door category. This is where it’s the team sand trap. This is where they’re not building a team, they’re trying to create culture, they’re trying to systemize processes, they’re trying to wrap their head around what they should be doing, and as they approach maybe 400–500 units it gets really painful because everybody’s asking them for everything and they start to realize they are the number one bottleneck in the entire business, that everything they got them there they have to give up.

I’m excited to talk with you because you’ve dealt with this stuff and you’ve seen this. Maybe you could share your perspective of what does it really take to build a business and how does the team really play into that from your perspective.

Melissa: You touched on little bit of my message is getting out of the way. I’m not the tech generation, the paperless generation. I still use paper. I still like to print and read. It doesn’t work in today’s market for everybody. I would say the number one thing as you grow is to get out of the way. Get out of the way and hire people that have different skill sets.

In our company, we always do personality tests. Tony Robbins offers it for free.

Jason: The DISC?

Melissa: Yeah, the DISC test. It’s free on his website. We do that, find the personality styles. For example, in a bookkeeper, you want someone who is very good, very high, and procedural. You want to make sure you find that in any of your staff mates. In our chain we have a big diversity, age, and skills. You can’t remember everybody have personality when you want to be like me. I never met a stranger and I’m a visionary. I’m the person who’s up with the ideas, tell us the way I wanted results and then gets out of the way.

Jason: I love it. I’m a big proponent of using the DISC as well. In fact, Tony Robbins recently switched his DISC assessment, if you’ve noticed, from the inner metrics, which I actually used to have a connection where I would get the full three-part inner metrics, which is even better than the Tony Robbins one which gives you the first two portions. But then, it started getting watered down and smaller. They just recently switched DISC providers and it changed, but I find it’s better than what it was even though it’s not as pretty. You can do that free DISC assessment.

You’ve got people on you team that are high C’s, they love compliance, they are rigid, they’re probably not the best friendly communicators, you’ve got high I’s that are great communicators and really great maybe with people, maybe high S’s that are great with customer service, maybe DC’s which are like unicorns that are really great at operations, maybe high DI’s which are great at sales and closing. Understanding that gives you a lot of power in being able to understand people.

Melissa: [...] when you get ready to hire, looking at that needs assessments. Looking that what diversity is in your team, but I want to go back to something you test on again because this is where [...] out, which is change.

Success comes with your willingness to change. That’s what basically you’re talking about as you’re training your team and also speaking to the property managers, as you said, they reach out to you. They have to be willing to change and I’m willing to change. That’s why I take a lot of classes even after all these years. I get into classes and I think of these aha moments that’s like, “Oh, I used to do that.” I cannot just go back sometimes and do things I used to do, but I also wanted to say, “Oh, we can’t do that.” “Why not?” “Well, we tried that.” Don’t have this theory of ‘that’s the way we’ve always done it,’ because that [...] stuck.

Jason: Right. Any of us who have been in business long enough, we’ve probably forgotten more than we’ve learned. There’s so much and it’s great to get those reminders. You have mentioned early on that they need to get out of the way. How does somebody consciously do that? A lot of times when we’re in the way, we can’t see it. It’s almost like telling somebody, “Look at the back of your head.” It’s how they feel. You’re saying, “Get out of the way,” and they’re like, “I don’t even know how I’m in the way. How do I do that?” How do you help [...]

Melissa: I’m sitting upstairs in a private suite away from my entire staff. My son, Matt, and let me just tell you I started the way I got the business when Matt was born, right? My son used to say, “Mom, nobody grows up and wants to be a property manager. Matt just celebrated his 11th year in property management and he’s our [...] Business Development Manager.

Jason: Over a decade.

Melissa: Yeah. But he didn’t. He went to college. He didn’t think, “Well, that’s what I want to be when I grow up. Nor did I. I don’t [...] thought you’re going to be servicing property managers.” But Matt sits in my original office. Therefore there’s a different skill set and, guess what, I’m not in the way. I’m down there and there’s something like walking by the office to go fix it as it get me out of the way.

Jason: You’ve physically have gotten yourself out of the way so you’re not hearing the auditory things that you would normally trigger a response and cause you to go into fix-it mode as an entrepreneur because we hear problems, we’re wired. We want to fix it. We also see a problem, we’re like, “I can make money solving that problem.” That’s how we think.

Melissa: And I tell you, I still go down, I’ll sit there and they want to see. Remember, I’m the face of the company. I’m the visionary. So, I [...] in the morning, I start down there, good morning to everybody, “Good morning, Frank. Good morning, Christine.” I go through my good mornings, I say hello to everybody there, and that’s [...]. I find out if there’s anything they need, me but I [...] work for the first couple of hours at home. What difference does it make? It allows me to actually stay home.

Let me tell you that my role, I was a property manager as I said when I started in the business. Got my license and my broker’s license, went to California State, got into real estate, and then I helped grow the company. And I’m very good at it. I really think if you want to grow your business, you have to be in community. You can’t be in community and be in the office operations and running everything. You can’t do everything.

I have gone out of the way by not being physically in an office downstairs where everybody can come to me. Now, I have a really good team. Christine Goodin who has her RMP with NARPM and her MPM. That’s a Residential Property Manager. MPM is a Master Property Manager. She came to work for me 18 years ago and she didn’t even know what property management was. And she’s now the Vice-President of Operations.

So, you hire right, you bring them to educational courses. Don’t stand in their way growing, either. That’s another really key factor. Don’t let them get stagnant. I say, “How do you keep somebody happy for 18 years? Give them new challenges.” You give them new roles. Let them grow right along with you.

Jason: Yeah, if you find somebody that has a growth mindset. Not everybody wants to grow. There are certain personality types that love growth, they love learning. On DISC they would have a high theoretical score typically, for example, on the Tony Robbins DISC profile that we have mentioned. But if they love learning, they have a growth mindset, and that’s a priority in their life is personal development, then you got a feedback. You feed them that and you have a team member that, just like fine wine, accrues value over time.

Melissa: [...] I want to go back, though, because it’s not without mistakes when you hire someone that doesn’t like the business. I think oftentimes with property managers and our groups and our friends come to me and they ask questions.

I think some of the hardest thing we had was letting go. We hire someone that doesn’t fit in the team, doesn’t fit in our culture, and we hang on. I think [...] over the years. It took me a while to get there. But I can tell you that if you’re mostly have a 30-day, a 60-day, maybe a 90-day introductory period, if it’s not working in that first month, it doesn’t usually change.

So, if I [...] in the States because I’m nice and I’m a fixer, then I hang on. [...] wait too long. Again, if you’re going through and adding to your team, you need to really make sure that you’re checking in. I want to give you a tip because I’m talking about that. I love to share.

Jason: Yeah.

Melissa: In the first 90 days of a new team member come in to work at Prandi Property Management, we do what’s called EOD, an end of the day report. They actually write down things they learned, the challenges they found that day, and just some sharing. At the end of that, they rate their day a one, a two, or a three—there could be 2.5—based on what they feel their workload, three being, “I can’t handle any more and I’m full.”

I have a new employee coming on and she’s been with me, let’s say, 20 days, and she gave me a 1–1½, we’re not giving her enough work. If you’re going to bring somebody new onto your team, again I don’t have to check on them, I don’t have to call on her, I don’t have to sit with her, somebody else is handling all the training, but as the owner, the CEO, and the visionary, I need to know how I’m doing with the team’s giving her information and what she needs from me to make her the best Prandi team member.

Jason: You mentioned a couple of things that I think are really important to point out. One, you mentioned that by not just having your office separate or segregated but also being able to work from home and working from home. I run a virtual team and a virtual company. Nobody can touch me and I’ve always had that advantage that there is a physical disconnect. I will probably go on saying that if my assistant could walk in every 10 minutes and say, “Hey, what should I be doing now?” I would go nuts, right? Having that, that’s another option for those that are listening, there is a trend with some people that they’re moving towards more virtual teams and digital offices and that can also create that disconnect.

Melissa: I want to ask you a question so I can also [...] and teach the audience. How do you communicate best with the person since you are virtual, and we all love the virtual part of it, how are you best communicating with your team member that’s even your assistant? What’s the best way you all communicate?

Jason: Our main modes of communication, we use Basecamp as a communication platform. What that allows us to do is to post messages, to think about things, to get clarity and put it, and then we allow team members to respond to those, rather than throwing it all out real-time in a meeting where everybody has to react, because I find the responses are big-time wasters and it’s not as helpful. We usually post memos or post a to-do and then people that are need to be looped in will be looped in and can comment on that. That keeps things really quiet and makes people think. It creates a very calm workplace. That’s our foundational mode of communication.

For quicker communication, we use the app Voxer and that is a walkie-talkie app. I don’t like typing and texting all the time. It takes too long. I’m quick. I want to send a voice message so I hold down a button on the app and I say, “Hey, Adam. Can you check on this client? They have mentioned this and do this and blah-blah-blah.” And then he’ll take care of it. The cool thing about Voxer is if you’re really impatient as an entrepreneur, if you listen to the messages, if you’re in the chat with somebody, the messages are real time. But if you’re not, it works like voice messages, like voicemail. And you can play them at high speed so you can speed up if they’re already done talking and the recording’s there, then you can play it at high speed. So, I’m listening to chipmunks all day long, telling me what needs to happen.

There’s a lot of communication even through Voxer or a situation like that that I just need the details, so I can just listen really quickly and we can consume information cognitively and auditory-wise much faster than we can speak it. We can usually do it at almost twice the pace very easily.

Melissa: It brings another point of communication. A good team member and a good team lead [...]. People need to know you’re supporting them. That’s what I [...]. But I was thinking about it, we did a lot of team-building last year. We hired [...] consultants to come in, and one thing I’ve learned about myself was delivery of email. Don’t stand [...] similar. Send [...] information and what the fact is, what the need is, send it to me in a delivery form.

If you have team members and that you’re on a call today and the podcast, I think it’s really important to know your style, what you want. They also said that I was sending the exact [...] that said, “Well, I send it after the company email and no one responds,” and they said, “Send me a few of those.” The guy came back and said, “You’re not asking for anything. You’re sending information but you’re not asking.” “Okay, I need this back but [...]” It’s not that we do a campaign to get you. This is where’s the call-to-action. [...] entrepreneur and you’re on the show today and you want to learn. Ask somebody from the outside to come in and analyze your style and your teams and they’ll help give you tools. I’ve done that. I’m always learning.

Jason: One of the hacks that I learned when I worked at Hewlett-Packard is that we were told to have certain subject lines if we were sending emails. If we needed some sort of response, you always had to say, “ACTION REQ’D:” at the beginning of the subject line in all caps. So, we would do ACTION REQ’D: if there’s an action required, or FYI was for your information only, you don’t need to do anything on it. So, there was kind of this code with subject lines.

Now, I’m beyond email. I don’t even look at my email. If anybody emails me, I’m not going to probably see it. My assistant handles all of that for me because I don’t like email. I don’t want to communicate through email. So, I set up a system in which somebody else can go with that and she just tells me the four or five emails I need to deal with and the other 100 or 200 I get a day are [...] somebody else.

Melissa: She’s a very good communicator and she is very responsive. If she doesn’t get a response, she page me again, making sure and not [...] very positive way. She’s patient, when I’m really busy, I’ll be a couple of days [...] she’s right back checking in with me. You’ve got someone watching your back and helping you grow, I’m sure.

Jason: Oh yeah. It’s a huge help and that’s the thing is with hiring, I think one of the big constraints of those with entrepreneurs is this myth that if I have somebody else do it, it won’t be done as well. It’s such an egotistical thing that people need to get over. This belief that nobody will be as good as me. As long as somebody believes that, it’s true. They make it true and they create a situation which they’ll never be able to offload things.

But I can speak with total confidence that every single person on my team is better at what they do than myself. They’re all better at what they do. India, way better at email than me. I don’t want to deal with email. I’m short with emails, I don’t pay attention, I miss things. Email’s not my thing.

Melissa: [...] going back to the strength of the team and knowing your strength as the owner/CEO of your company and knowing my strength. You put me in a room with 200 people, you put me in a room with 1000 people, I try to meet every one of them. I know that my strength in the world growing my business, is to be the face of the business, to be in the field.

I was in a class this morning. I’ve been taking classes at the local university on hiring teams and developing teams. Yesterday, I took a great workshop at Dominican University from a [...] a little bit about,job descriptions, position statements, and what’s the end results. They really teach us to have things in place and what our expectation is.

So I’m always taking courses to try and figure out how can I be better at things. I’m never going to be the techie person that knows how to set everything up. I hand it to my son. I don’t have to be, right? He’s 31 years old. I can hand it to Matt and say, “Matt, I don’t understand this. My phone is doing something. Here, can you just fix it?” I can hand it to Christine and she’s going to help me. So just not trying to waste time, I [...] come at me. And don’t forget, part of [...] today is also life balance. Being able to turn it off, take care of ourselves because we have a good team.

Jason: I think the more that an entrepreneur focuses on self-care, the more they have to give to their team and the lower the pressure noises. One of things I’ve noticed with entrepreneurs is that when our pressure noise gets high—it can be high in property management or in any business, but we deal with a lot as business owners—all of the worst attributes you share about business owners come out. People could perceive us as controlling or angry or frustrated because we get into this preloaded state where we’re in a stress response.

If you lower the pressure noise for an entrepreneur, our genius comes out. Our best attributes come out. The visionary comes out. We’re able to see the future. We’re able to make decisions about things. If an entrepreneur does not have the team that they are in love with right now, then they’re not the person yet that should be running it. That’s the sad truth. They haven’t become that person yet, that can have a team, that instead of them having feeling like they are trying to control, it’s instead a team that they’re able to just inspire.

Whenever we fail to inspire, we always control and we get into that stressful place where we’re trying to manipulate and get our team to do stuff and we’re trying to force KPIs down their throat or trying to push them to do things because we feel like, “Why can’t me team just do what I need them to do?” We shift into a calm space of, “What does my team need from me in order to be as successful as possible so they can keep helping me the way that they’ve been helping me?” and that’s a much more comfortable place to be. It’s a calm, quiet workplace.

Melissa: I actually have never been accused of… I don’t yell, I’m a very calm-natured person, I deal with and respect boundaries, so I’m very good about how would that person feel if they were in my seat, how are they want to be treated.

I do that a lot. I know their personal. Something’s going on. You want to know if something’s going on, it’s not always about business. Those people that have lives [...] out the door. So, I’m really in-tune with that. I called someone in yesterday and said, “Look, I can tell something’s going on. You just not coming work with that bright smile. What can I do to help?” So, even though I’m not downstairs, still sense the energy and pay really good attention. I try to make sure they know that I really care and I do care.

The other thing is really working with an outside business consultant. Don’t get stuck. Have somebody come in and help build your team by doing team building. We had a lot of fun doing team building last year at the end of the year in October. Last year in October, we went out and went off site, we prepared everything so we can all leave, and we had one person [...] kind of helped out while we work on all day. We worked on what I think the success in my company is very strongly if we’re not communicating with each other, and we’re not respecting, getting along, and taking our own blinders off from our busy property management day, then the outside world is getting that same message.

So, if I’m not really happy doing my job as a property manager and I’m not having a good day because my team members not [...] and the other team members not doing something, that equals out to the public and that’s when one of those one-star reviews come in.

You can ask the team to let them know they’re supportive with each other, give them the tools, working with that, and let them get to know each other and [...] each other, that goes out to customer service.

Jason: There’s this great book by a gentleman. I believe his name is Steve Sims and the book’s called Bluefishing. He basically talks about how his whole goal with his team members or even with clients that he wants to work with is they have to pass the chug test. It’s like, “Would I want to have a beer with this person?” and it’s just a simple gut check to say, “Do I like this person? Do I enjoy being around this person? Does this person makes me feel safe? Do I feel comfortable?” because if anybody on your team doesn’t make you feel comfortable and you’re always worried about them or you’re concerned about them or there’s some sort of weird disconnect in rapport between the two of you, they’re adding to you pressure and noise. I think that it is important to like your team, to actually like them.

Melissa: [...] company. Sometimes when there’s one person who’s not [...] team, they go and they grab other people.

Jason: Oh yeah, they’re a cancer.

Melissa: You have to be really careful with that. But I really [...] week after our last retreat work and that was they wanted. For somebody [...] it’s not the most positive [...], so we started a Positively Prandi board. We got that big board [...] coffee and our tea is, and people are [...], “Congratulations on your three-year anniversary.” We write riddles. [...] while the sun is shining now, how happy we are today.

And that doesn’t cost money. It’s just a little more positivity and always share a five-star review. We always celebrate a good review, and if it’s not [...] we could get there. That’s another [...] about growing your business is really you have to work on your teams, inside the walls of your team before you can really start wanting to grow and double or triple in size.

Jason: You have mentioned early on that you make sure you have this morning connection with your team. My team’s virtual and we’ve done the same thing. I felt like it’s absolutely critical that you get FaceTime with your entire team.

Those that have virtual teams that are listening, or virtual team members, one of the things that we do at DoorGrow is we do a morning huddle. It’s 15 minutes, we set it at a weird hour so that people know that time matters. We set it at a weird time, like it’s not at a half-hour mark or hour mark and people have to show up for that.

It’s 15 minutes, we just share stats openly in the company, here’s how much revenue we’ve made so far this month, here’s how many people on our Facebook group, all that different stats that matter, and then we do ‘caught being awesome,’ when we say, “Anybody catch anybody being awesome in the last day?”

Sometimes it’s a little awkward if it’s a small huddle and not everybody showed up and people are like [...]. But I always comes up with somebody that we can point out or highlight somebody.

Melissa: [...] for us at Prandi Property Management, I have a weekly team meeting. I get copies of the notes so I can look at what’s going on with the teams, and the at the very bottom it says, “Did you write a thank you note to them?” because still old-fashioned handwritten thank you notes go a long way.

We have Prandi custom beautiful notes cards, it works in all industries, and who did you thank today? It’s similar to what you’re saying because a team, I like that. I want to go back and say that, “Who did you catch being awesome today?” That’s kind of we’re doing to Positively Prandi board, but in this case, acknowledging their credibility at the end of it, the weekly team meeting notes [...] really good [...] everybody’s formats is the same, so we’re looking at the same numbers, same things, and when it says, “Oh, that’s so nice,” they wrote the gardener a thank you note. They wrote the plumber a thank you note. They wrote [...] a thank you note for the inconvenience. We get a bunch of $5 Starbucks cards, we [...] and say, “Have a cup of coffee on us. Cheers to you.” Just saying thank you is really nice.

Jason: I love it. In our huddle, at the very end we just go around and ask each person, “Are you stuck on anything? Really simple, is there anything you’re stuck on?” and there’s always somebody that’s stuck. When we didn’t used to do that and we would just have a weekly meeting or just throughout the day, it makes me wonder what were they doing when they were stuck all of these previous times because there’s always somebody stuck on something. “Oh yeah, this client had this question. I didn’t know how to deal with this, or this.” We can tackle those things really quickly and if it’s something that takes a lot of time, we’ll just say, “All right. Let’s schedule a meeting for that.” But we just tackle that in our huddle so everybody feels unstuck, which is also helpful.

Melissa: It’s not just stuck. I myself have made mistakes in this business, that we have aha moments as well. I can say, “Well, is there anything you want to share that you have an aha moment that you might teach us how to do our job better?” [...] offers I do like I’ll start an example. I’ll say, “Matt, my son, now is the Business Development Manager, who is out there in the field. Sometimes we get three, four, five, six clients a day,” who knows how many are coming. They’re coming fast and furious because we’ve been there a long time. He’ll say, “Hey, can you take care of this duplex? The co-owner’s called in and they really wanted a response today, but I got so many things on my plate. Can you handle that?” which is okay because I know how to do it. Only, he gave it to me at 10 in the morning and I didn’t make that connection with that client until two in the afternoon and it was too late. He had already hired someone.

I can use that as my team example as my aha moment. What I should have done the moment he gave it to me, I should have stopped, I should have looked at what is it important, not checking my Facebook, my email and everything else. I should have made that a priority. Because I didn’t, he signed up with another management company. I want to share that as the owner because what will happen next time is I’ll make it a priority.

I try to [...] those aha moments and life lessons. What can we do, how can we have done it differently, and we had different results, because we can all [...].

Jason: We do a weekly team meeting. In our weekly team meeting, we share wins from the previous week, personal or business. That gives the team members opportunity each Monday to share, “What were your wins for last week?” so that we can point her out.

As entrepreneurs, a lot of us are economically driven, so if we take a DISC profile and turn on all the insight, we’ll see that we have a pretty high economic score typically. The mistake we make is that we assume everybody else likes money as much as us. Look at that economic score in your team members, those that are listening, if the economic score is high, bonuses work great for them. If the economic score is low, they want recognition.

Most of my team members, that’s all of my team members with the exception of people that are involved in sales, usually their economic score is low, which means they want recognition. So, creating opportunities in these meetings where they get to show what they’ve done the previous week, where they get to show that they’ve had wins and we look through our objectives for the week, and they get to say, “Yes, I got these all done,” this is an opportunity for them to feel recognized by the whole team. I find that that increases motivation and accountability, significantly.

Melissa: And I think it’s interesting because you and I didn’t rehearse this and we didn’t talk about what was most important, but there’s a lot of similarities in what we’re doing as entrepreneurs, owners, and visionaries. I think that’s really important for the audience to hear that some of these things that we’re talking about are simple, and it can be done by anybody.

Jason: What I’ve noticed in business and life is I’m just a student and a fan of what works. That’s just what I get excited about. And really, every system, all the different coaches and mentors I’ve worked with, they so many similarities because truth and/or reality is what works and everything gravitates towards that.

You’ve been in business for 37 years. You’re going to have figured out a lot of things that don’t work. What that leaves less on the table is a lot of knowledge about what works. I think also I’m very willing to fail. I’ve had lots and lots of failures. I think DoorGrow’s been built on thousands of failures and that’s how we learned. I think that goes also to my team because I’ve had so many failures. I think also I’m very conscious of the fact that my team needs to be allowed to screw up and fail. They need to feel safe failing. If they don’t feel safe failing, then they’ll never be able to learn.

Melissa: Or they could hide it. We don’t want them to hide it.

Jason: Exactly. They become hiders. They start hiding stuff from you the first time they screw something up and they feel reprimanded or shamed or put down, they’re going to hide that from you forever. They’re going to hide everything in the future and then having team of hiders is absolutely catastrophic to the growth of the company.

Melissa: That’s true. I think that always attending workshops and now we have things online, you talk about being able to teach people like you’re doing right now, that is great. I think just because you have 10 in the business or 20 years or in my case, you never stop learning.

And I think it’s really important for people to use their resources. I love to read. People can share books. They can go on your website and your Facebook page, and share a good book, and share stuff they’re learning. I find that people soak it up. I love to speak and teach. I love to walk in a room and share my knowledge. There’s not one person I’ve ever said, “No, I absolutely will not share that with you.” I usually, “No problem. You want that form, let me send it to you.”

You’re going to laugh, I taught a class in Palm Springs. I’m not paperless and I’m proud of it, because I’m not and people love it. They’re going to be people that still touch things like I do. Let’s give them [...] and eventually that does change. My son doesn’t print [...] anything, but I do. So, we have to have a diversity and we have to be able to give people the tools they need to be the best whatever the way it is in the year 2019 or the way we used to do it.

When I first got in business, the screen was literally the size of a small [...]. We didn’t have cell phones. Technology is good. I think I’ve been able to travel, I’ve been able to leave my business. Now, I check my email but I schedule my time. I’m going to the beach because I’m sitting on a beach in Hawaii. I’ll check my information but I don’t check it like I do when I’m sitting on my desk working.

Time management it important. I allow myself a lot of time because even last week, I was running hard. I was struggling early in the morning, facing the company, lots of meetings, going to Rotary, going to community events, starting the morning with my classes over at the university or whatever I’m doing, and I finish at nine o’clock at night. So, I just take it to Matt because I was going the State of the City Dinner with the Chamber of Commerce. By Thursday last week, I hit a wall and I was tired.

So you have to find the balance. Everybody, not just the entrepreneur or owner, of how you’re doing with your whole life balance because you have to keep yourself well in order to be a good leader.

Jason: Absolutely. My recently added for our C hackers, a health secrets training, simply because I found that health is the number one thing that impacts the productivity. An excuse that we get from entrepreneurs a lot was, “Oh, I just don’t have time.” They have almost doubled the amount of time if they’re taking care of themselves properly. Their brain is just that much more effective.

Melissa: If you go to yoga for an hour, you’re not on your phone, you’re not on your email.

Jason: You’re right. You’re disconnected.

Melissa: You [...] can read the phone in your car. You just take your phone if you’re going out in an easy hike, if you’re going distance in that thing, but to be able to go and listen to music, too, on [...], people say sound and meditation. If you can do music meditation and it works really well.

I just spent some time with a good friend in [...] and we had so much fun playing our playlist and singing the songs, and then how did we remember the words to this song? But your mind is doing so much. What music does is it kind of steals your heart and soul. If you ever are going through something, get yourself to music and let the music take you to a different [...] and property management. That happens a lot.

I always tell my staff, “Get out from your desk, move or walk around the block, change your environment. Grab your iPhone, put on a song and walk around the block singing the words. It changes your whole intake of how you’re going to treat the next customer or the next co-worker.

Jason: I love it. Let’s connect this to science and here is why that stuff is so effective. I’m a huge audiophile, I love music, I had a band in college, I bought [...] songs. I love music, but when you play instruments, when you play music—there’s videos on this—your entire brain lights up. Both sides of the brain are like fireworks when you’re playing an instrument or really engaged in music.

When you connect your right and left hemispheres in your brain, when those sides of your brain are both firing, it significantly lower stress. In fact, I went and did EMDR therapy on the recommendation of my business coach, for a year. EMDR therapy is an eye movement therapy. The idea behind it is they use it to eliminate PTSD in soldiers and stuff like this.

As entrepreneurs, my coach is saying, “You have some PTSD, Jason. Let’s be honest. You guys deal with a lot of stress. You’ve got some of this. Go get an EMDR therapy and talk about you assistant, they quit or talk about this, get this stuff taken cared of.

What is cool is that EMDR therapy is based on the idea that there is bilateral stimulation, so stimulating both sides of the brain back and forth while tuned in to an idea that causes stress or PTSD or some sort of issue. I’m not making light, by the way, of those who have legit PTSD, but the stress that we have as entrepreneurs, it will tone that down and it kills that. It helps you see it with a fresh perspective and helps correct and eliminate that emotional stress response.

Here’s what’s magical about walking. Walking is bilateral stimulation. Exercising increases the stress response in the body. It just does. That’s part of exercise. But walking oxygenates the body but does not increase the stress response. It actually lowers it because it’s causing bilateral stimulation. Left, right, your body keeps moving, and each step causes bilateral stimulation. So, if you have anxiety, if you have a stressful call or whatever, going for a walk until that goes down is really magical and amazing.

So I go for a walk in the evenings if I had a stressful day. I start my day usually a lot of times with a walk, making sure that I walk around. It help digestion, it seriously helps cognitive function by getting your brain to lower its stress response. It’s like a serious hack and walking sounds so simple.

Music more than any other thing can directly impact emotions. That’s why in movies, they’ll manipulate your emotions using the score of the movie because it makes you feel what’s going on. So, if you want to change your feeling, you can use music because different songs can help you lean into sorrow if you need to feel that sorrow, music can help you lean into positivity or shift out of...

Melissa: Brings back memories. But [...], somebody having a bad day because in property management we done have all positive days. And sometimes, especially because where we are now in Northern California, we had a lot of rain. [...] when we were getting ready to set up, it’s not really our friend.

Property management, rain, leaks, putting people up at hotels, you’ve got a lot coming at you and nobody wants to be displaced, especially if it’s the holiday season, we have bad weather and it rains then. So, I [...] “Okay, what have you done for a time out? What are you doing? Because you need to go have a time out. Just go.”

We do fun Fridays, ice cream socials, aloha Fridays because we are actually [...] together in an office [...] downstairs, so we do see each other everyday. I may not but the staff works together [...] and works in an office. Having seen this which Christine’s been really good about it.

Matt, last Friday [...] his dog is a new rescue. She’s adorable. Her name’s Mia and she’s a very [...]. She’s a very good dog and he said, “Hey, do you mind if I bring her out in the open? I don’t have any appointments.” People actually brought some really [...] good, fun Friday and made them feel really good by having a dog there. Who knew?

Jason: Almost like one of those service animals.

Melissa: Yeah. I was waiting for his to say, “Mom, I can bring the dog to work because this is a service animal.” I said it was okay.

Jason: Yeah. I love the idea. Walk and talk is my own personal therapy. If I have something I need to talk through, I talk to somebody about it while I’m walking. I’ll just walk around. It’s magic.

These are all really cool ideas. Melissa, it sounds like you have a phenomenal team. You’ve got a wealth of knowledge. For those that are listening, that maybe are struggling to achieve their growth, they’re really stuck in a rut, they’re having a difficult time maybe with their team, they’re just having trouble seeing over the weeds, so to speak, what sort of advice would you give them, maybe a first step to take, some step towards all the [...]

Melissa: I would say don’t be afraid to [...]. Pick up the phone and call another property manager. Call you, check-in with you. People forget the touch of the voice, too, and someone knowing. Most people have been through the same thing. When you [...] the NARPM family or you or your users together share one thing that’s going on, it’s amazing when I see the post that goes on in your Facebook page and the solutions people are willing to offer.

But sometimes picking up the phone and saying, “Look, I’m having a really hard time with this. I have a client doing it.” I’ll tell you to fire them. But if you have [...] a really hard time, then maybe you just need to [...] another professional. NARPM has over 5000 members.

Don’t think you’re going to take the world on your own. If you’re going to grow, you have to be willing to change, to be willing to have a mentor, somebody you can lean on. You got to use the research that you’re offering as a national vendor and the research that you’re offering, we have to use those resources so that we can actually learn to grow because you’re going to give us tips from the outside of property management looking in at what we’re doing. You’re already doing that just sharing with me. So, if you’re willing to make the change and to reach out for growth ideas and ask how to implement because I’ve already done it. I’m willing to share. Why reinvent the wheel?

Jason: I love it. You mentioned be willing to change, find mentors, reach out and get a mentor, reach out to other property managers. I think the crux of all these things, kind of energetically that you’re talking about here, underneath all of this, I think a property manager or anyone listening to the show, they need to recognize that the power being able to do these things come from vulnerability.

It takes a certain amount of vulnerability as an entrepreneur to say, “I have a problem and I need support.” Whether you are reaching out to a mentor, it takes humility or vulnerability in order to be willing to go out and learn more like you’ve talked about. I think sometimes we want to put on this facade or we think we need to be the one that we’re always okay. I think it’s okay to not be okay. I think there’s power in that and I think there’s connection in that if we’re willing to be vulnerable, because I don’t have all good days.

I have sent messages to my business coach or my mentors and saying, “Hey, I’m really struggling. This is hard for me dealing with this.” Sometimes, it’s all we need is just to be able to tell somebody that and acknowledge and be vulnerable, but I think when we’re vulnerable with others.

Those that are inside the DoorGrow Club Facebook group, I encourage you to be willing. Lots of people have been willing to share vulnerably like, “Hey, I’m dealing with the situation. I’m in over my head,” or, “I don’t know what to do with this,” or, “I’m stressed out and it’s been a really a rough day. What do you guys do or recommend?” or, “Could somebody talk to me on the phone today?” I think there are so many people that because the way we get momentum as entrepreneurs, the way we get fulfilled, is by giving it to others.

Melissa: Helping others. That’s right. I was national president of NARPM. My team was sharing a vision and I’m still sharing a vision. Our visions can open up a lot of doors and windows for a lot [...].

Jason: There’s nothing that’s been more powerful for me when I’m having a rough time in business or as an entrepreneur or in life than to reach out and be able to help or support a client or help somebody else. I look for those opportunities when I’m stressed [...] somebody an opportunity to support you because you’re helping them by being vulnerable and allowing them to do that.

Melissa: That works with our staff, our team members, to reach out and say, “Okay, I’m actually having a really hard time. I’m overwhelmed, I’m tired, I’m going to take [...] refill my bucket up. [...] keep that to your team. They’re only human, they understand.

Jason: Absolutely. That’s the entire team’s job. My team’s job is to lower my pressure and noise. That is their whole purpose for having a job. But they can’t do that unless I’m honest.

Melissa: Yeah and it’s working well.

Jason: Yeah, it does. It works really well. The bigger my team gets, the bigger my company gets, the easier my life gets. I know that sounds backwards for a lot of people, especially those in the 200–400 doors sand trap because as they’re approaching the 400–500 units, their life gets crazy and hectic and it’s probably because they’ve built the team the wrong way. They built the system in which it’s transactional leadership and they’re throwing tasks at people. Everyone has to come to them for feedback instead of giving them objectives and trusting them. It’s something that takes work to shift out of.

Melissa: It goes back to where we started [...]. The key to success [...]

Jason: Full circle. Get out of the way. Sometimes we can’t see it. As entrepreneurs, I think no matter how evolved we are or how effective we are or how much coaching we’ve had, we always have our own blind spots and we always need that outside perspective. I need it all the time and your team can provide some of that if you ask them for honest feedback. I ask my team all the time like, “Hey, I’m thinking of sending this email out to all our clients,” and my writer, Adam, who’s very diplomatic, will say, “Let we reword that for you.”

Melissa: That’s a good point. [...] I do that, too. If I’m about to send an email, or I end up firing a client or put them on a ‘this isn’t working,’ someone else on your team to say, “How does it sound as if you’re just receiving it?” That’s it. That’s a good point, too. Rely on that for that.

Jason: This has been an awesome conversation. I’m sure we could talk for hours. It’s just really fun to connect with you. I appreciate you coming on the show. What takeaway do you want to leave people with and how can they get in touch with you if you like them to do that?

Melissa: I would say to rely on the vendors yourself. You light up when we started the very beginning of our just getting ready for the podcast. When you started getting ready to do this, to share with your listeners, you light up.

I think we need to rely on our resource with you and what you can bring to us property managers. I think that the other takeaway would be to be really in-tune with ourselves to know when we’ve had enough to take that break, and then to really take a hard look and maybe today or tomorrow, go down and really be grateful, and come within gratitude to thank the people we work with everyday. Together, I would say we can make a difference. So, keep that attitude and really respect for your team, the clients, the people you work around.

Jason: Love it. How can people find out more about Melissa Prandi or get in touch?

Melissa: My email probably is best. I am an emailer. It’s melissa@prandiprop.com. I’m great with [...] resources, I’ve written two books, and I love to share ideas. Let’s just keep going. Let’s keep growing and making our industry bigger, better, and more respected as we all become better at property management.

Jason: Absolutely. I fully believe in the philosophy of the I mindset that the industry’s number one challenge right now is not your competition. It’s awareness. The industry’s second number one challenge is just perception of the industry as a whole. By helping your local competitors level up, you’re helping yourself. You’re helping the whole industry.

Melissa: Raising the bar up to what one’s expecting the quality of what we’re providing out there, people on rental property.

Jason: Absolutely and good property management can change the world. You guys get to have such a massive ripple effect. You’re impacting hundreds of thousands of tenants, homeowners and their families, and that ripple effect keeps going and that’s big.

Melissa: I’ve seen how much that actually NARPM complement people, how much we give back into our community because we do that every year at charity. We’re giving back in more ways than just that.

Jason: Absolutely. The ripple effect is big and I’m grateful that really awesome property managers like yourself allow me the opportunity to be part of that. That’s inspiring and exciting for me.

All right, Melissa. It’s been great having you on the show and we’ll have to have you back soon.

Melissa: Absolutely. See you in NAPA, the [...] NARPM conference [...].

Jason: We’ll see you in NAPA. All right.

Melissa: See you soon. Thank you.

Jason: Okay. Bye-bye.

All right that was a phenomenal interview. Really fun to talk about that stuff, all things I’m very passionate about and Melissa is obviously very passionate about as well. If this episode was interesting or useful to you, please give us a feedback in iTunes if you’re listening there. We would love if you like and subscribe to our channel on YouTube. That would be awesome if you’re watching us there. If you’re seeing this on Facebook, then share it. We appreciate you.

Make sure you get inside of our awesome community for property management entrepreneurs, which is the DoorGrow Club. You can get to that by going to doorgrowclub.com. By joining, we’re going to give you some free takeaways including The Fee Bible, a list of good vendors you should be using, that are the best in the industry, that get the best feedback in our group, and we’re going to give you some other free gifts if you provide your email when you sign up for that group. Make sure you get inside the DoorGrow Club Facebook group.

At some point, you may want to reach out to our team and talk to us or myself about growing your business. If you’re feeling stagnant or stuck, or you feel like you could use some additional support, that’s where we do at DoorGrow. Until next time, everybody, to our mutual growth. Bye everyone.

Download this Episode

May 28, 2019

Delegating work, tracking progress, and managing issues often leads to frustration. So, businesses buy workflow software with all the bells and whistles; only to realize that it’s too cumbersome and confusing.

Today, I am talking with Vinay Patankar of Process Street. After experiencing similar pain with software, he decided to create his own simple way to manage recurring workflows for teams.

You’ll Learn...

[02:40] Why isn't there software that can do these tasks while I sleep?

[04:57] Philosophy behind process development and problem with most products - the people who built and designed them.

[05:45] First-generation Software: The experience on paper is not necessarily the best experience on a computer.

[06:15] Can my grandmother figure this out? Create easy and intuitive software that anyone can use without any kind of context or previous knowledge.

[08:05] Process Street is not just a process documentation platform, but a superpower checklist for accountability.

[11:17] Rules around Tasks: Customize checklist based on variables or conditions.

[12:27] Create automations to do fast integrations with other systems.

[15:50] Document processes to do it right, the first time; but not slow you down.

[17:23] Process breaks down and people start doing it their way, but don’t document or update their processes.

[19:50] Track Changes: Capturing every change made to a process on the backend. [21:22] Process Street gets processes done faster and more accurately.

[24:20] Everything becomes better; creates momentum, saves time, improves efficiency.

[25:35] Process Street’s Support Channels: General, sales, and engineering.

[26:47] Catch-22: Struggling to manage team, keep things organized, maintain culture, document processes, and systemize business to grow and move forward.

[28:24] Pre-made Process Templates: Tenant move in and move out, tenant screening, property inspection, and landlords.

[29:09] What's your process? Share, copy, paste, and optimize processes.

[30:25] Process Street down the road: Future features to include role-based assignments, task permissions, and mobile app.

Tweetables

User experience and ease should always be at the top of the list with software.

Once you’ve got that checklist, you can superpower it.

What's your process? Share, copy, paste, and optimize processes.

Resources

DoorGrowClub Facebook Group

DGS 79: Engage Investors and Add More Doors with INVESTimate with Don Ganguly of HomeUnion 0

Transcript

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

Today's very special guest, super excited about, head of a really cool software platform, Vinay Patankar. Welcome to the show. He is here representing Process Street.

Vinay: Thank you, Jason. I'm excited to be here. Hey, everyone.

Jason: Vinay, give everybody a little bit of background. How did Process Street come about? Let's start with you. What's your background in all of these?

Vinay: Sure. My background is I've done a few things. I'm from Australia originally. I kind of worked in tech, worked in finance, work as a recruiter, started a couple of companies, and ended up on running a company that was a marketing agency. We're doing lead generation for consumer finance. Basically, driving leads for credit cards for Citigroup, and insurance for Geico and things like that. We basically had a very repetitive process where we were launching new campaigns on different ad networks. I'm running a lot of different tests, so maybe we're watching 20 or 30 different tests every day. At this point in time, we're working a lot with the new ad networks where maybe they hadn't released their API yet or essentially there wasn't much automation possible. A lot of that was being done manually.

I had a team in India that was helping managing one of those campaigns. I basically had a lot of issues tracking all of that–delegating work, tracking that it was done, making sure that it was done correctly, getting visibility over the progress of all these tasks, which meant that I was staying up until 6:00 o'clock in the morning sometimes kind of working with my team in India and I got really frustrated. I was like, "Why isn't there a software that can just do these for me while I sleep?" That was the original pain that I was feeling.

I knew that there were workflow products in the enterprise. I'd work with tools like Microsoft SharePoint, SAP Workflow, [...], and these very multi-million-dollar expensive products. I knew that they existed, and I understood, "Oh, yeah." You define a workflow then it's in a very controlled set of tracks. People just kind of follow it and execute it. This is how a lot of the really big businesses that have to manage thousands or tens of thousands of people like manage their processes. I'm like, "Why isn't there a tool that does this that is as easy to use as Gmail." That was kind of the original spark. I just wanted it for my own team to use. We built it as an internal tool, initially, and got my own company on it. Then, started showing it to people and it was like, "It's so cool." We kind of eventually spun that as a product and that was the beginning. Essentially, just scratching my own itch.

Jason: You still have the agency stuff?

Vinay: No. That's long gone.

Jason: Okay. Great. Originally, this was built to fill a real need in a real-world situation and a real-world scenario which a lot of times the challenge with software is that it's not. It's built on some theory or idea by some nerd. When it comes to practical reality, it's got too many clicks. It's not super user-friendly. It becomes really cumbersome and confusing, but it does everything. It's got all these features and bells and whistles.

In developing this, what's the philosophy behind the process and how do you balance that?

Vinay: For sure. Awesome question. The kind of thing that you just said is exactly the problem with most of the incumbent products in our space. The products I've mentioned before like SharePoint and SAP Workflow and this and that, that's the exact problem. They were designed by business process analysts, by Six Sigma specialists, that come from the process engineering department in IBM or something. I've gone to business school, I've done MBAs, have a very specialized understanding of how business processes were supposed to work, understand how design a flow diagrams, and essentially, took what they learned in the university and put it on a computer. It's like took what they've drawn in a piece of paper and put it on a computer. It's interesting. That's actually how a lot of first-generation software was built. It’s like, "Let's take this thing we do offline and let's put it on a computer."

The experience that you get on the paper is not necessarily the best experience that you have on a computer. You actually see that in a lot of products. The first-generation products were designed that way. My approach to it was user centric or basically, user first. The idea was we're not selling to people who have degrees and business information systems. We're selling to people that run property management companies or people that run a local restaurant, some of them runs a hotel, some of them runs a HR team or sales team or something. It's not necessarily people that have their specialize process department or enterprise.

Our approach was what is going to be the easiest piece of software that we can make that people who have no education, no understanding, don't know what the processes is, don't know what the workflow is, never done any of that before in their life, or ever read anything about it, that they're going to be able to intuitively understand, pickup, and just use without requiring any kind of context or previous knowledge. That's the approach that we've been taking which is really this, "Can my grandmother figure this out?" kind of approach.

Jason: Yeah. I think when it comes to anything complicated maybe for an eight-year-old or for grandma to do it, then there's resistance no matter who is doing it. If you're a high-functioning, quick-thinking, entrepreneur or you have a team member that English is the second language and they're overseas, regardless, it lubricates the process to have that ease. User experience and ease should always be at the top of the list with software. It's my number one qualifier for looking software, "Will my team actually use it? Will it be easy for them? How quick they adapt it?" Because adaption for software is one of the biggest challenges getting a team to actually use it.

Vinay: Absolutely, yeah.

Jason: Maybe you could explain what Process Street is for those that are listening because it's not just a process documentation platform which is great and awesome. There are platforms that are just for process documentation that are out there. When some people use their Google Drive to document processes, they put them all in documents and they've got screenshots and just texts. It's beyond that. It's got this benefit of being a checklist where there's accountability, there's a record, and there's history of the people actually using the process. It also is this workflow tool that can be directly integrated with your external tools through Zapier, third party systems. It can capture data instead of just be something that somebody refers to and looks at. It really does a lot of things. How would you describe Process Street to those that are just not familiar with it?

Vinay: Yeah. It's tricky. We're almost in a new category here. The easiest way I explain it to normal people that don't know anything about processes or workflow or stuff like that. It's that we’re a superpower checklist. You have a checklist. This is something that needs to get done. Some of that, we have a checklist we want to follow. In property management, you have a checklist for every time a tenant moves in or a tenant moves out. We have a checklist every time we sign up a new landlord. Essentially, these are all the things we have to do, and we want to make sure that we remember to do, or someone on our team remembers to do every time a tenant moves in, a tenant moves out. "Make sure you do a background check. Make sure you get the contract signed. Make sure they get the keys. Make sure that you inspect the property." And this and that, right?

It sounds simple. It's a simple way of explaining it. But then once, you have that checklist and you can build a checklist really fast–as fast as you can, just typing out a list of stuff in excel, or doc, or whatever. But then once you’ve got that checklist, you can superpower it. This is where the superpower is coming. You can have each of those steps and you can say, "Make sure the tenants get their keys." Inside that, you can have instructions. You can have, "This is where the keys are located. The keys are numbered this way." Once you've given them the key, go into here, fill-up this form, and make sure you got the tenant to sign in this book that they've received the keys and take photo of the book or something.

Again, in each of these tasks, I can add in instructions on how to do the tasks. As you've mentioned before, you can add in form fields to actually collect data along the way. If you have a step that's like, "Collect the tenant’s information." You can type in the field, what's the tenants name, what's their address, what's the address of the house, and things like that. You can catalogue all their information that kind of turns similar to submitting a form or filling up a spreadsheet where you get all of that data in a tabular form, you can use that in the future for automations as we talked about.

You can control rules around the tasks. Now, I have a checklist inside each task. I have different steps. I can have content. I can have form fields inside those steps. Now, I can start to create rules around tasks. Now I can say that, if it's an apartment building, add these tasks for, "Have a building key." If it's a house, hide that task for, "give building key." I can customize this checklist based on variables or conditions that are happening in the scenario. For example, is it a house or is it an apartment? Is it in suburb A or suburb B? Maybe there's a different agent or something else that has to happen based on that scenario.

I can add handoff. I can say, "Wait until John collects the keys and then assign Brandy to go and call the landlord or return the keys." I can handoff steps. I can say when somebody needs to do something kind of handoff. I can create automations and due dates. I can say, "This task is due two days after the keys are given." Or, "This task is due three days before the staging date." Or, "This task is due two days after the staging date." I can start to create all these automations and controls around how the tasks work when they're ordered, automating when they become due related to other various events, handing off between different people in the team and stuff like that.

I can create lots of automations and other systems from that data as well. For example, if somebody sent you an email, that's like, "Oh, I'm interested in your property." You can have that trigger automatically run your checklist. Now, every time I add a tag on this email, it runs the checklist automatically and copies all the details of the email into this checklist so that when I’m running through it, I’d have it all day. If I change something in my CRM or in my rent management system, if a lease expiry comes up in rent manager, you can use that to trigger and automatically launch a checklist.

You can then have data from your checklist pushing to other systems. If I know for example, the tenant’s name, I've collected their name and their email, and the house address, I can take that data and I can put it into hello sign and I can generate a contract that automatically gets sent out for signature to that client. Once the signature is signed, it can come back and notify [...] triggers is actually a new feature in Zapier they just released which is find and update checklist. But now you don’t even have to wait for that signature to come back and then pull back in the signed document, save it to the checklist, checkoff the task signed by the tenant and hand it off to somebody else in the team to do the next task. We start to do all sorts of fast integrations with other systems once you get all that set-up.

Jason: Okay. I want to paint a picture for those listening. I use Process Street in my own business. I started using it because I'd seen a lot of property managers using it. A lot of property managers said, "Hey, this is really intuitive. It's very easy to use," so I started using it. What really pushed me over the edge is we used Basecamp internally as a communications system and platform which it is great at, but it really isn't good for repetitive processes. We have more process documentation scattered throughout several different Basecamp projects for different teams, indexed documents, we had some on Google Drive, and it just got really crazy. There wasn't a central repository to go to. Just changing that alone was a game changer for us. Having one place, "Oh, did you look in Process Street? It's in there. Everybody can go to that."

What really pushed me over the edge though was I had spoken with a gentleman and I told you before this call, I remember his name, his name was Bob Abbott. Bob is a property manager. he was telling me how he runs his company. He's got his profit margin to 65% in his business by using Filipino labor and by using Process Street. He showed me how he uses it. We had some really cool conversations geeking out because we're both kind of nerdy. That's almost unheard of in the property management industry to create that sort of margin. It's very possible to do in property management because there's a lot of systemized things, there's a lot of repetitive things, and there's a lot of things where you need somebody manually to do stuff. You can give them the processes and the checklist to do it.

One of the conversations we had which I think is an important balance to strike is, with my team, we want to document processes to the point where a beginner could do it the right way the first time. We also want to balance that with, we don't want it to slow them down once they know it. Just like driving a car. The very first time somebody drives a car, they're probably checking all their mirrors, adjusting their seat, and doing all this stuff. After they get used to that, they'll probably just hop in and drive. With us, with our team, we try to make our processes as few steps as possible, but as many as necessary to create that balance, so it doesn't get in the way when our experienced team members are trying to use it but to show record that they've done these tasks for this particular client or used this particular case or situation.

What I've really noticed that’s brilliant is that just by having a process that’s actually used to do the process and your team is required to use the process to show record that they’ve done it, the process gets better overtime. What happens, I've noticed, in the business is I create a process document in the past, give it to a new team member, they would look at it and say, "Well, this is outdated." It always ends up being outdated because nobody's using it on a daily basis. Then, we have to fix it and adjust it, and then they learn how to use that. Once they get familiar with it, they never look at it anymore unless they forget something.

What happens over time, the process breaks down. They'll start doing their own things. They start changing it. They figure out some innovations. They think innovations. Maybe it's worse, maybe it's better, but that isn't captured in the process. Then, if they quit or you lose them, our goal before they quit or leave, we've got them to update their processes because they weren't using it. There's this huge advantage, I've noticed, in just having the team use the actual process software that the processes in and going through each time. If there's a change that needs to be made, we can adjust it, they can adjust it, if I give them the permission to. We can improve it over time. Just the clarity in taking all of our processes in to where they're actually usable as a checklist is a huge step from having just the process you think is documented well enough to somebody actually being able to use it. It's a big leap and that leap has caused us to significantly change all of the processes that we brought over into it, so far.

Vinay: That's awesome. What we find is that as you continue to iterate your processes over time, that's really when they become more valuable. I think that's normal for most systems. You can go look at the enterprise companies, their processes are some of their most valuable pieces of IP because they've been so refined over so many thousands of customers or years or whatever. They're now really, really valuable and they’re kind of like protected secrets for that organization.

Some cool things you can do, for example, if you have 10 checklists running and you're onboarding 10 different landlords, or you’re moving in 10 different tenants, and you do want to make a change. One of your PMs comes back and says, "Hey, I noticed that this is incorrect," or "This needs to be clear if we do it this way." You could update the process and you can live pushout that update to all the 10 tenants. If you have 10 people in the field at the moment, even when we have no way of knowing, they can be in a car and by the time they get of their car, their house, and they open the process, it's got a new step in there. The steps change a little bit and now they'll just follow the adjusted step. You don’t need to run a training program, don't need to send out an email, it's just kind of like, "Oh, the process is updated. Let's do it."

On the backend, it's actually not exposed right now but on the backend, we're actually tracking all these changes for you. Every time you're making a change to one of your processes, we're capturing those changes in the backends’ versions. We're working on dashboards that will let you see how the output of your process changes overtime as you iterate it. It's like, "Oh. It's taking us two weeks to onboard a landlord when we did version one of this. Now, it's a version 100. It's only taking us four days or something." You kind of see, as you continue to iterate your process over time, how they're improving or how they're affecting other metrics. That's pretty cool as well.

One of the things we're really excited about, it's kind of a big part of the vision of the platform, is around what you said before where there are some processes where maybe you don't want to add extra work to somebody to their task. We definitely have a lot of processes like that. A good example is answering support tickets. We don't want somebody to run a checklist on every single support ticket that they're answering especially once they're in the roll after a while. They know how it works. But we do want them to do it for trainings. We want them to run that checklist for their reference or something as they're going through getting used to it. It's pretty important for us an our organization. We actually have everybody in the company do support when they come in. That's an example of what we just want people to run at the beginning.

What we're really moving towards is we're trying to make our processes actually reduce the amount of time that it takes to get that process done. When you're using Process Street, it's actually less time to get that process done than if you were to not use the Process Street process. That's our ideal scenario. Not only is it faster for it to get done, but things got done more accurately; things got done in a higher detail way.

A good example is we have a sales proposal processes where we send out a proposal for a price point for a set of users if we’re working on enterprise deal. For the rep, basically, what they have to do is they have to come in to their CRM, click a link in the CRM which launches a process, then they've got to fill in a few pieces of info. From that, it pools in a lot of information automatically from the client. All the client's details are filled out automatically. They don't have to do any of that. They've got to put a few things like how many users do they want, what's the price that we agreed upon, or do they want a one-year deal or a two-year deal, kind of things like that. They basically just punch in a few things in the process, really quickly, just takes 20 seconds. That then hands-off automatically to their manager who then looks at the proposal and approves it inside Process Street. Once that's approved, it creates a whole kind of proposal with all these multiple checkboxes and things that can get signed. It will probably take you 30 minutes to set up if you're going to go through the whole thing yourself.

It goes back and it updates the CRM. It creates opportunities and changes the statuses, the confidence, it makes the proposal sent, and puts in links to the proposal, and updates all this information whether the proposal is sent out. That whole thing, for a rep to do that manually, to go customize a Word doc, [...], mapping all the fields, sent it out, go to the CRM, update all these different fields in the CRM, and follow up tasks and all this stuff, it takes them 30 minutes or an hour or something. With the Process Street process, they can do it in less than a minute.

We're actually working on trying to build processes that actually significantly make you faster and more accurate to use the platform than without. Obviously, it can't happen for every kind of process. You can't completely automate going to a house and inspecting it. There’s a pretty manual aspect to that but for the ones that we can, that are very digital, we are trying to [...] as possible.

Jason: Yeah. Sales people are notoriously known for not leaving good notes, not wanting to deal with software too much. Any burden you can take off their plate, software-wise, is a big win. You're saving money every single time.

Vinay: For you though, as a business owner or as the team leader in sales, there's way more benefit than that. If you can shave off these minutes or hours off each of your reps like a week, it's just not a pure timesaving thing. They bill more so they would actually close more deals in that period of time. It creates more momentum for the whole team because the whole team bills more. The whole team saving time and building more which kind of creates this whole pause and momentum of like then you're able to hire better reps and you're more able to expand territories, this and that. Everything just becomes better.

It's actually a pretty good lesson in most of your teams. If you can really get the operations piece tight; you can get your processes tight–your sales operations, your marketing operations, your support operations—it makes the whole team compounding much more efficient. It makes your whole organization much more attractive to other people because you don’t want to come in to a place that's a whole giant mess where they just going to have to be spending all their time copying and pasting stuff and dealing with spreadsheets. You'll be able to hire much more high-quality people. You'll be able to execute a much larger amounts of projects and whatnot. It’s just kind of all your infrastructures to sell it.

Jason: Yeah. You've mentioned that you have everybody that come in and do support. Do you have your developers do support on a regular basis, so they have to live inside this tool and deal with support-related things?

Vinay: Yeah. We have different support channels. We have general support, sales support, and engineering support. Engineering do kind of work in engineering support. It's generally more complicated problems versus how much does the product cost or things like that but they’re generally dealing with a more complicated [...], something with the API or something like that. Yeah, they’re in support as well.

Jason: Interesting. Property managers that are listening, a lot of times, what ends up happening is there's two, I call them the first two sand traps. The first major sand trap of property manager falls into in the solopreneur stage, they get to maybe 50 or 60 units under management. They're doing it mostly on their own. They're struggling to figure things out. Then the first thing they think of doing is getting people like hiring people. People are so expensive. Having a tool like this could immediately allow them to outsource into offload and create some leverage in their business.

Where it becomes even more necessary, I think for a tool like Process Street, is when you get into that 2-400 door category which is kind of the next sand trap that they fall into, this is where they’ve got a team now. They're struggling to manage this team, they're struggling to keep things organized, they're struggling to maintain some semblance of culture, and their big challenge right now is documentation. It's almost always a big challenge. They need to document their processes, they need to systemize the business, it’s this huge constraint that's limiting their ability to grow and move forward. By then, it becomes critical for them to get something like this in place where they've got a really good processes, really good documentation, and really good clarity as a team as what's actually being done.

Vinay: Yeah, absolutely. It's a bit of a Catch-22 situation because you've got more work going on when you're in that next level of business because you got more customers and more doors. You kind of feel like you've got less time to work in your processes, but your processes are more important at that point of the company. I think the point in your CRM or whatever is probably a similarly stressful project to undertake but once it's done, you're very happy to do it. You might feel that you're underwater right now, but that's probably a good sign that you need to work on some of the processes. If you're that underwater because you won't be able to scale that way.

The other thing that we have that helps a lot with data is we have tons of templates. We actually create pre-made process templates. We've got a whole bunch in property management. We've got some generic ones around it. Some of those mentioned, tenants move in and move out, tenant screening, property inspection, and landlords. We also have some ones that are like, "Oh, this is how you do it if your system is AppFolio," or something like that. It’s kind of like more generic ones and ones where you can kind of switch in and interacting with your different property management systems. That actually helps a lot if you do feel like you're really underwater, and you don't know where to start with your documentation, you don't have any time for this, "Come check out their offer." You come and check out all the different property management templates that we have and that's a really good starting point.

Jason: Yeah. You can also share your process with other people. You can ask another property manager, "Hey, what's your process?" If they're using Process Street and they can share that with you, and you can immediately import it in your tool which is cool. It has a lot of really cool features. If you're on one of the higher plans, you can also do that context sensitive [..] statements. If a certain task is complete in a certain way, you can expose or hide certain other steps to make it faster or more hyper relevant to what needs to be done then. You can get as crazy with this as you want which I think is fascinating or you can be simple as just having a few steps with the couple screenshots and some texts.

Immediately, I think, anybody could take whatever processes they currently have, bring it over, copy, and paste it in. Then, they can start optimizing it. I've even taken just checklist in a text document of steps, you can just paste that in and it spits it out as each separate step. It really is a rapid tool for getting processes built out. It's been a game changer for those that have implemented it especially those that just didn't have anything. It's a huge leap, huge step up.

What's on the horizon for Process Street? What else do you think those that are managing property should know about Process Street?

Vinay: A couple of things we have coming up is, one thing that I know a lot of our property management customers are excited about, we have hundreds and hundreds–I don't even know how many–of property management companies all the way from single person operators up to we have big teams in [...] and Keller Williams and stuff like that. We do work with a lot of property management companies. One of the ones that they're really excited about is a feature called role-based assignments. Right now, you can predefine on a checklist who needs to do what. You can say, "Either Bob in finance needs to do this collect payment task or the finance team needs to do this collect payment task." You can say, "The property management agent needs to do these four tasks at the beginning." But the way that it was right now is you could only indicate that this person has to do these four tasks.

It gets a little bit tricky when you have a team of property managers. One property comes in, it needs to get assigned to Manager A. Another property comes in, it needs to get assigned to Manager B. Another one comes in gets assigned to property Manager C. You want to rotate your assignments, or you want to map who's the account manager on this and make sure that the correct account manager is assigned to that.

We have now a feature called role assignments. At the beginning of the checklist, you kind of have a dropdown that says, "Who is the PM that is responsible for this account?" You can select that and that will automatically assign all the property management, PM-related tasks to that particular PM. You can maybe say like, "Who's their district manager? Who's their regional manager?" That will might assign some of the approval tasks to their particular manager for that PM that you selected.

Instead of saying, "This task is always assigned to Bob." It's like, "This task is assigned to a property manager. I just don't know exactly which person on the team is going to be that. I'll assign it out later or I'll use the type of automation to assign that." For example, if I click this on Salesforce or I click this from one of my property management systems, I could look at who's the logged in user or who's the user that owns this account. I could automatically push in that email address into the process and automatically assign all those tasks to that particular person.

Actually, a really cool one for this is, there's actually two cool features that just came out. Now, the features that came out is called task permissions. What task permissions do is it lets you control who can see specific tasks in the checklist. I have 10 tasks. I can say that, "Right now, anybody who comes into the checklist can see all the tasks in the checklist." I can say, "I want the property manager to see these five tasks. I want the manager to see these three tasks. I want the finance to see this one task."

What's really cool is you can bring in the actual tenant or you can bring in the landlord as a guest into the system. It's like a free user that you can bring in. You can say, "I just want the landlord to see this one task at the top of these two tasks." It's like, "Fill in some form fields here, tell me your property, your address, and some information about when you want someone to come see you. Sign this contract here and then, done." Those two steps are exposed to the landlord. Then your team can come in afterwards, pick it up, and continue it out. "Let's do a background check on this person, a credit check, or whatever," and start doing internal steps. You now can break up the process and have external people, some internal people, an internal manager, all kind of working on the same process but not seeing all the information. It’s kind of being siloed into their own tasks and things that they need to see.

That's pretty cool for bringing in landlords or tenants if you need them to upload documents or complete any complicated set of forms. It's really useful. You can @ mention them, have conversations with them. You can reject their uploads and say, "Do it again. Do it again." A lot of these gets done over hundreds of emails back and forth, and they always seem to get lost. It's really cool managing that. Another big project we're working is the mobile app. I think a lot of people will like that too.

Jason: Yeah. Very cool. I think a lot of the systems that we have that feed into the Process Street were using some sort of a third-party form like Typeform or Gravity Forms and then, we're feeding in in that. You're saying it'll be possible or even easier to have tenants or clients to submit things through...

Vinay: Yeah. They could do that whole form into a task inside the process and just expose one task or two tasks to those clients. You wouldn’t even use those external forms anymore.

Jason: You want the client or the tenant to see, call the client up, and say these things because then it seems disingenuous.

Vinay: Exactly. You could be doing an interview and you have notes on the interview and stuff like that. There's a lot of things where you want that wall of privacy. Someone can submit a leave application or an expense approval or something like that. You want to be able to have a conversation with HR or conversation with the manager just about the person who submitted it get seen.

Jason: Yeah. I think in some way, if I create a process, if I put a video in there, I have checklist steps, there's so much clarity and transparency for my team to know how to get work done that they don’t have to come to me. Any question, as an entrepreneur, that we get asked once by our team is going to be asked again. Unless, it's documented somewhere. Every single one of those interruptions cost you at least 50 minutes a time. Every single one of those interruptions may take, each time you're training somebody or bringing somebody new, if that's not systemized, it can take you hours. The only way to really move forward with the business is to create a business that is somehow scalable. In order to do that, the foundation is having some SOPs in place; having some Standard Operating Procedures, having some process documentation. I think the brilliance of Process Street is adding that layer of accountability in mixing it in a checklist, having people move through a process, and being able to see who has done what for that transparency.

Is there anything else that people listening should now about Process Street before we wrap this up?

Vinay: Just that it's free to check out and that you should go sign up for free account at www.process.st.

Jason: Alright. Cool. Check out Process Street. It's process.st. Vinay, thanks for coming on the DoorGrow Show. Really great to have you here.

Vinay: Absolutely. It's been great. Thanks for having me.

Jason: Alright. Cool. For those of you that are listening, I do recommend you check Process Street. It is a really nice blend between ease and what's easy. I think it's a software that once you get into it, it's very intuitive, easy for people to figure it out, so don't be afraid. If you are a nerd, you really geek out on tech, and automation, I think it has plenty there to satisfy you. I think they’re coming out with some cool new things that will give Podio, another system, a run for their money. That'll get a little too complicated for most people. Check that out.

If you're a DoorGrow Hacker and you've enjoyed the show, make sure to like and subscribe if you're watching in YouTube. Make sure on iTunes that you give us a real review. We're going to appreciate that. Everybody listening, if you are a property management business owner and wants to grow your business, make sure you get inside our DoorGrow Club by going to doorgrowclub.com and join our free Facebook group and our awesome community.

Again, thanks to Vinay. Thanks to everybody that's been checking out this show and listening. Until next time, to our mutual growth. Bye, everyone.

Download this Episode

May 21, 2019

Searching here, searching there...How do investors find rental properties that align with their financial goals? Is there a way to provide them access to these assets?

Today, I am talking with Dan Ganguly, president of HomeUnion and founder of INVESTimate. As an entrepreneur, he’s always looking for a new solution to an existing problem. So, if a realtor needs a feed for homeowners, a property manager needs a feed of investment properties to present to potential buyers.

You’ll Learn...

[04:05] Questions for Investors: What’s your budget? Risk preference? Age and stage in life? Do you need cash?

[05:13] Two Brands Connected: HomeUnion’s where investors search for properties; INVESTimate’s where property managers and realtors work with investors.

[06:30] Business Model Change: Internet-only to tool that increases engagement between property managers dealing with investors.

[07:43] Where to Start: Build a relationship sooner than later in the sales cycle process.

[09:00] Help property managers build better Websites as a front door for people.

[13:53] What does the local property manager do? Signs up with service, pays monthly fee, and puts on private/white labels.

[14:58] Realtor gets MLS feed for home buying; property manager gets MLS feed with intelligent filters and big data for investment buying.

[15:15] Everybody knows their #1 prospect is their existing customer because they already know, like, and trust you.

[16:12] Other Options: MLS, Zillow, and similar Websites focus on finding stuff (schools, pools, etc.) that get people into a neighborhood.

[16:35] INVESTimate: Offers big data platform with 110 million properties, 20 years of transactions, 200,000 neighborhoods, and more than 9 million rentals.

[19:30] Is everything 100% accurate? No. Property is highly individual.

[20:15] INVESTimate: Investors get best of both worlds when making a transaction.

[21:45] Different risk-reward gradients/categories help people make the right decision.

[26:45] Feedback from Property Managers: How has this changed their business?

[32:05] Bottom Line: Business owners make money, get a door, and much more.

Tweetables

It’s a fish net to grab fish, and then we nurture the fish until they buy.

Your #1 prospect is an existing customer because they already know, like, and trust you.

We can’t force them to buy, but give them a reason and product to buy.

Bottom Line: Business owners make money and get a door.

Resources

DoorGrowClub Facebook Group

DGS 78: Automating Property Showings with Michael Sanz of Neesh Property 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, 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.

And today, I have a very special guest. I’m hanging out here with Don Ganguly. Don is the CEO of Homeunion, is that correct?

Don: Yeah. I’m the president of Homeunion and founder of Investimate.

Jason: President and the founder of Investimate. Don, I want to welcome you to being here on the Door Grow Show.

Don: I’m glad to be here.

Jason: Don, you have an interesting background. You have a lot of experience in entrepreneurism, I think people would be really interested here some tidbits from you today, and some insights. I’m excited to get it into your business and service. But let’s start with you. Can you give us a little background on you and just some of your experience and what lead you to where you are now in business?

Don: Sure. I’m sort of a vocationally reformed engineer. This is my third company. The last one we did was actually an outsourcing service company for mortgage banks and services. We were actually helping originators doing the big boom and people [...] were getting a loan. When everything fell apart we were helping the services service those loans and try to keep people in their houses. We touched I think over $75 billion of service. That company ended up getting sold to Oracle, to a banking software company.

But it was the progenitor to this whole Homeunion and Investimate thing that we founded because we were able to see all these properties all over the country that had some pretty decent prices and a good rental price ratio. When we looked at that, we figured there are all these homes that made good investments and people that live in the coast don’t get access to these assets. We looked at that and said, “Is there a way that we could provide access to rental properties the way people buy stocks and bonds?” If you look at the way rental properties are bought, we base them a little how homes are bought. So people go to a listing site, they get a list of properties, they do some back and beyond below calculations, figure out the rent, go to the neighborhood, or pick up the neighborhood, call a realtor, and then bounce around and try to find the right property that they like.

If you’re look at an analog to that and say, “Hey, if you go to a wealth advisor and say, ‘I’ve got this much money to invest, what should I buy?’” The wealth advisors are going to say, “Okay. I got some stocks, here’s the idea, and here’s the score, here’s Apple, here’s Facebook, which one of these do you think you want in your portfolio and let’s go through a list.” The question they ask you often is, “Hey, what’s your budget? What’s your risk preference? What’s your age and state in life? Do you need cash?” And then they put a portfolio together that’s got a little bit of this and a little bit of that and it all enlines to your financial goal.

We took that playbook and we brought it to this Investimate product that we built which says, “We can ask investors the same type of questions about their real estate investments and then let the system go out and find the right assets and build them a portfolio or a set of assets that need those financial criteria.” The non trivial exercise because to do that, we actually had to calibrate everything from a risk and reward stand point. Right? How risky is this house? And what’s in that house type of thing.

That’s how we came to this. As an entrepreneur, you’re always looking for a new solution to an existing problem. Often, the existing stakeholders don’t have the answers. You got to think of something a little bit different. That’s how we got into this business.

Jason: Help us understand these two brands, how they’re connected first and what they are. Just the overview.

Don: No, I’m happy to. Homeunion used to be a retail platform where investors can come in and basically search for properties and invest. The first incarnation of Homeunion, we were actually serving as overall asset managers for these properties and then farming out the actual work to property managers on the ground. And then last year we made the call, it was becoming too big a business for us. We’ve done over 200 other transactions and we didn’t want to be in property management. We ended up giving those properties out to the property managers that were managing it, productized it and provided it as a platform for property managers and realtors that are working with investors.

The product itself has been tested for four and a half years, it’d done $200 million of transaction within 5% of forecast and a good use by investors to buy properties all around the country, highly exercised. What we just see is the business model from being an internet only model that brought consumers to my front door to a product that would then serve people like property managers who are actually dealing with investors day to day, giving them a tool to engage with their investors. That’s the connection between the two.

The Homeunion brand is an internal user of the investment product. So any leads that come in there are fed to our property management partners in various locations because we are not in the business. When we engage with that investor and they want to buy a property, then that property is managed by one of our partners. Both of them actually feed into the advantage of the property management tool.

Jason: Let’s take our typical listeners. We’ve got a property management business owner, they got a small business, maybe they’ve got 100-200 doors on their management. They’re wanting to grow their business, they’re trying to deal with team changes, and staffing, and operations, and trying to systemize things for the first time ever. And then we have these solutions available that they can use to support in bringing investors. Where would they start with your services?

Don: Yes. If I look at businesses such as yours and others, you’re helping them grow doors. How do you grow doors? You grow doors by finding more investors and having investors buying more doors, right? The property manager either at the bottom of the food chain which is that when the investors already bought that property, then they put their hand up and compete with four other property managers and say, “I’m the best guy in this market and you should come and put your property with me.” Or they can be more proactive and go up the food channel and up that funnel and have a conversation with the investor when the investor starts looking for that property.

Be early in the solutions process. What happened to them is if you’re at that point in the fulcrum then you are actually able to participate in the property management process more naturally rather than doing it after the fact.

Jason: If you’re part of this process earlier in the sales cycle then they’re going to have this relationship with you that’s already set and you’re by default mostly going to get the management contract.

Don: You got it. Because you've been partnering with them ahead of time. At the same token, let me just take the other side of the coin there, the good work that you’re doing and others are doing is that saying, “Okay, listen, you need to market your business in some fashion. You need to get traffic on your website. You need to put content up.” There are various stakeholders that are helping property managers build better websites, you have a business in that, and a better front door for people to come in. When those people come in, then what do you have for them? That’s where we come in.

I’ll give you a simple analog. If you’re a realtor, what do you need? You need an idea speed to your local MLS. Otherwise you can’t show any property. When a company comes in and says, “Hey, I want to buy from you.” If you have a website that doesn’t show any properties or you don’t have an ability to send that buyer of homes to buy then you can’t participate. It’s a minimum stake for a realtor.

Jason: [...] tool.

Don: If I am an “investor realtor” and that sort of property management, if I’m catering to investors then I need an ability to serve up investment properties or properties that are more likely to be good investment. Or put another way, I need to give you an investment lens through which to look at these properties so that you can then engage in buying a rental property through my system. If I don’t have that then I’m back to the bottom of the food chain because I’m searching here, I’m searching there, I’m doing all of these.

If a realtor needs a feed for homeowners, I think a property manager needs a feed of investment properties that it can present to its potential buyer, if the property manager wants to jump up the food chain. That’s what Investimate provides.

If you’re a property manager in a particular market and we’re in 15 or 16 markets around the country, we have real time connections to the local lifting services, what we would do is we would white label Investimate for your website so it would say, “ABC Property Manager” with your logo and your color on the front. When you use Door Grow or another service to drive investors to your website, then they come in and they have a way to search for rental properties in your patch or around the country, if you allow them to. Because you still get a referral fee for that and engage with you in that fashion. That’s one part of it.

The second part is if you look at the realtors and I go back to the home buying because everyone gets that business. If you go to the home buying end of the business, what happens? The realtors are all over that bill when it reels its head. When a home buyer says I want to buy, you have a short window in which to grab that person and about 20 realtors are all over it from leads, from various places. The name of the game and how quickly can I get that person.

On the investment side, nobody wakes up and says, “I just have to buy rental property in the next 24 hours. Otherwise I’m going to have a hissy fit of some kind.” That doesn’t quite work that way. When people make that decision saying, “Hey, maybe I should be in real estate, I know a lot of wealth is built that way. I should be out of the stock market, or I’ve already bought two properties, I think it’s time for me to buy another one. I got some excess cash.” What they need is a steady dive of stuff that fits their preferences and in nurturing. It’s very different from the home buying.

The investment platform actually comes with a set of campaign management and a set of investor support services. When you’re under Investimate, and you’re a customer of ABC Property Management. So you come in and say I’m Jason. You register you start using the site, we call you and say, “Jason, we’re investment support with ABC Property Management, we’re here to help you use the system and help you understand what’s in here.” You get acclimatized with the system, you understand what it is, we get an idea of your preferences and the system also captures your preferences.

Now, you’ve told me you like sci-fi movies or romcom and I now keep sending you scifi and romcom till one day you watch that movie, because that’s how investors work. They drip feed them until they put their hand up and say, “That’s probably interesting.” Now I got to buy box. Once I get that buy box, then I call ABC Property Manager and say, “Hey, I’ve got Jason who’s got X amount to invest. He’s looking in Austin. This is sort of his buy box, this is the sort of the property he’s looking for. Please help him out and do the local due diligence.” We serve that lead up at that point. It’s the website, it’s a set of intelligence filter that connects to the local listing service, and it’s a whole analytics lens that allows them to search like they would search with stocks and bonds. I can get more into the data side of it, it’s much deeper than that.

To answer your question what does that local property manager do? He signs up with the service, it’s a small monthly fee, and he private labels it, white labels it on his website, and he’s off to the races. The way we make money, really, most of it is from when there’s a successful transaction. What we ask for them is to load whatever lead customers they have into that proprietary database that always stays there on and then these people as they come in, it’s a fishnet to grab fish, and then we nurture those fish ‘til they buy. It’s a long term way to keep their brand in front of customers and leads and others.

I’ll tell you something that a lot of the property managers are working with, not only loading customers, they’ll think, “Hey, here is a whole bunch of people we touched in the last five years. We didn’t do business with them but we touched them in some fashion. I want those registered to me.” And a lot of them wake up and are prospect of buying stuff. All because once you see the product then they’ll say, “Yeah. I’m interested and I will use this to buy something.” That’s what we bring to the tables. What a realtor gets from a strict MLS feed for home buying, a property manager gets an MLS feed with a bunch of intelligent filters and big data for investment buying. That’s what we’re doing.

Jason: I love the idea. Everybody listening knows or should know that their number one prospect is your existing customer. They already know you, trust you, and like you. You’re already probably managing a property for them. They’re one of the most likely to do business with you again, and if you have opportunities, a property’s available and they’re already investors, it would be a very easier thing to get them into an additional property. They’re going to have a high level of trust with you. If you have this easy pull of properties that they could see and view and they’re getting dripped, and they’re getting notified, and they’re in your funnel and system here, then eventually something is going to grab them. They’re going to go, “Hey, this looks like a deal I could sink my teeth into. I’m going to go for this.”

For the skeptics that are listening, you’ve got the property managers that also do real estate and they’ve already got the MLS and they’re like, “Wow, why don’t I just put the MLS on.” And they can just look for property, any property. Let’s really clarify the difference between just having the MLS and having the Investimate tool.

Don: Great question. The MLS or Zillow or Realtor.com or any of these sites, are geared towards you looking for school pools, stuff that gets you into a neighborhood to live in. What we did is we created a big data platform where we have 110 million properties, we have the entire US Housing Stock, we have 20 years of transactions. We have 200,000 neighborhoods, we have an initiative here with University of California where we collect over 9 million rentals all over the internet so we could put that into our model, and we do a couple of different things with it.

We process over $200 billion of properties to bill them out. What we do with it is first thing we’ve done is we calibrated neighborhoods from A to D as a neighborhood investment grading. Think of this as a bond grading so the D is not, we’re not in D neighborhood. C is not necessarily saying it’s a bad neighborhood, it just says it’s a neighborhood that’s a little bit more volatile, you get in with the lower quantum of money, it’s a high yield property, that neighborhood property isn’t going to give you as much growth. But you can pull me a portfolio depending on what else you’re trying to buy.

An E neighborhood has a higher quantum of investment. It’s a more expensive neighborhood, view is not going to be that great, and you are going to see a lot more growth. The question is should I buy Apple stock at $800 and buy five units of Apple stocks or should I buy something that’s $50 and buy hundred units of it? Or should I do a little bit of both? We’ve given them a risk reward calibration so they can look at both of these things. Then we forecast, we have a model that estimates the rent. We have a rent valuation model, we have a cascade waterfall where we compare to [...] and a bunch of other things to say here’s a range of the rent. We then estimate the price and see if it’s above or below what we model the price to be at. Based on that we come up with a big range on their property.

Then, we provide a con of rich neighborhood information on the renter. If you go to an investment, you’ll see how much money do the renters make, what’s the average income, how come they can afford the rent, where are the rents on this neighborhood, am I an outlier rent? Once my renter goes, “I’ll never be able to fulfill it because I’m the only guy in that neighborhood where my renter’s paying higher among everybody.”

There’s a ton of good strategic data and there’s price trends and rent trends on that neighborhood. When investors go in, it’s a shame when you look at the stock. What’s my risk in this stock? What’s the previous growth has been? What’s my dividend play? What had done historically? What is it expected to do? What other research can I get around it? It’s that one place where all that information is encapsulated.

The potential rental property buyers are doing what [...]. They’re going to go to Zillow, find new property, we’re doing a back of the napkin, going to a rental meter, finding the rent and then coming back, going to a realtor, looking at the neighborhood, they don’t like it, go to another one. We put all of that into one piece on the back of big data.

Like in many model, is everything 100% accurate? No. Property is highly individual. You and I may be living next door to each other and you’ve done a lot of great things in your property. You may be a little bit different than mine. How do we do that? The property manager solved that last mile problems. The model, the data helps them create a buy box, instead of guard rails, instead of neighborhood, it’s a type of property. And then the property manager goes and then says, “Yes, the data is right on this one. The renter’s exactly what we said.” or “You know what, this property is gutted on the inside and it’s not going to work.”

It’s a combination of that site, of the platform, and the local property manager at the point of purchase. Investimate, you get the best of both in terms of making a transaction. Now, why is the property manager the best partner? Because he or she has to manage that property afterwards. They’re not going to go in and say yeah, the rent’s going to be $2,000, no problem. The moment it closes, then they come back and say the rent’s $1,500, that’s the beginning of the end as far as their whole credibility goes. All that big data is underlying the investment lens of [...], just going in that a little bit more.

When we look at the MLS, we pull the listing services every 30 minutes. It’s real time. We apply 50 to 60 different filters to pull stuff in. We exclude stuff. If they’re common, if we don’t like them, we exclude those things, exclude D neighborhood. There’s a set of filters that go in, then we [...] the rich data, then there’s a que where a set of eyeballs do a quality check. Then, it makes it into the platform. It’s a highly curated investment focused platform that’s available for the property manager to showcase to his or her client.

Jason: Alright, that was a great explanation. Basically, what I’m hearing is this is like MLS. It includes all the MLS stuff but it’s better. It includes more tools, more resources geared specifically towards the investor, and they’re able to make decisions. This is maybe a random question but I’m really curious about these different gradients or different categorizations that you have of risk reward and how are people making this decision whether they want As or Ds?

Don: It really depends on the risk profile, at the end of the day. If you go for a C property, when do you buy a Triple C bond? A Triple C bond is a high yield bond for sure, because it’s not an A bond. But when you buy Triple C bond, you also know that there could be defaults, there could be things that wreck your returns. You’re getting that high yield to compensate for the risk.

When you buy a Triple A bond, it’s more deterministic. In a higher end neighborhood, you’ve got rents that are not quite as high to the ratio of the property price, but you’ve got renters that tend to be more stable, that have been there longer period of time, and their homes tend to appreciate. But it requires more money to get in. It all depends in the investor’s personal preferences, are they looking for money now, are they looking more to build a portfolio and after 15 years when it’s all paid off that’s [...]. Are they looking for growth where they wanna spin around and flip it in five years? That’s a whole different discussion, they you go after more growth properties. You need at least five years for real estate before you cover all your transaction costs, or three plus years.

It just totally depends on the investment and their requirements. They might buy some properties for cash flow, they might buy some for growth, and they might buy some that’s in between. We hear investors say hey, I need cash flow, that’s my number one determinant. Other investors might say I don’t really need any money right now, but I wanna build up a portfolio that will grow and be safe. Others will say I need to cover my mortgage, and maybe make a little bit of money, then the balance in the middle, but I really need properties that are going to appreciate. I don’t really care about cash flow, but I don’t want to be out of pocket.

Those decisions then drive the type of properties, neighborhoods, locations, cities they end up with.

Jason: In your platform, curious, what do you see being the most popular for the investors that are typically using this with property managers in that categorization?

Don: Where people buy, 40% is what I call the B neighborhoods, 40% are on the C neighborhoods which are the high yield neighborhoods, and 20% are the As. As are obviously more expensive, and your buy will shrink when you get to the A neighborhood. That’s roughly what I see.

Jason: Got it. This would obviously work for non-property managers that are using it. Maybe their intention is just to use and look at this for their own stuff, or to look for flips, or turnkeys, or different types of deals than just some sort of long term management situation.

Don: It would work for realtors, any realtors that’s dealing with investors, they are also using the platform. We’ve got a number of realtors that signed up. The realtor piece is a little bit different. I’d sell you a home and you’re not going to buy another home from me for the next 7 to 10 years typically, I’m not going to come every year and sell you a home. Once I sell you a home, if I’m smart, I know you could be a potential investor. I say hey, if you’re looking for rental properties now, here’s a site that gives you local and national rental properties, and I’ll help you out with it. For the realtor, it becomes a cross sell. For a property manager, it’s an upsell, it’s one more property or a new guy coming in. But for the realtor it’s a cross sell to a customer or lead that already spent the money getting that customer or the lead. Now you say what else can I get out of their wallet? And this product does that.

In terms of flippers, we’re not really geared towards flippers. We’re not showing the big distressed assets out there that you can find and rehab. The big thing for the flippers are rehab numbers. How much do I have to put into this property to actually make money on it? I’m buying it $40,000 on the market, I put $20,000 in it so I’m already in $20,000. I can make another $20,000 because I can sell it at market. That requires on the ground running around and understanding what those rehab cost. They can use the system to identify stuff, I’m sure. But at the end of the day, I think these are people driving around neighborhoods or trying to find distressed assets that need that. There’s not an inordinate focus and people on that on that platform, just because our partners are not really chasing those types of deals. We need a partner on the ground for this, solving the last model. Any investor can come in and use it for sure.

Jason: Property managers that are already working with you and using your system in doing this, what sort of changes or feedback or results have you been hearing from them? What are they noticing and how has this changed their business?

Don: One thing a lot of them are noticing is that a lot of their customers or their leads are waking up and they are engaged in looking at properties. There’s two, three things they’re saying. One is they’re making offers and new properties, in some cases they’re selling properties to the system which helps the property manager get a listing. They get that listing, and if the investor is selling the property, they can get to keep the property management because it’s a rental property that they’re selling it as and they’re not kicking out the renter going to a homeowner. I think a lot of people like that because there’s no erosion or churn of their portfolio from that perspective.

Jason: What’s happening is even though properties are selling, which would normally turned into a property management business, they’re able to retain the management contracts and keep the tenants in place.

Don: That’s right.

Jason: Love it.

Don: For those investors that are willing to do that, there’s some that will want to sell in the open market for whatever reason. I think if we can increase the velocity of this, and as more and more people get connected to the investment network when you push something into that, it goes across, gets eyeballs everywhere. It may move a lot faster because the investment on the other end will want a rental property that’s already rented with a track record of history from that property manager, because the property manager will be able to give us what’s been happening in the last two or three years in performance on this property. That becomes a lot more attractive than to buy a new one and then do all this stuff to it.

Jason: So this is a proven property, they’re able to see that it’s rent rolled effectively, and this extends the reach then of this ability far beyond what the local MLS would provide because investors would be out of state and beyond are able to see this opportunity.

Don: And realtors are not that interested in selling rental properties to investors. The MLS and stuff like that, they get the least amount of attention from realtors. Putting it on this platform puts many more eyeballs. We get 120,000 users on the platform today.

Remember, we’ve been at this for four years, four and a half years. As the assigning of these property managers, they’re going into this. The [...] account is increasing dramatically month over month. Out of that, not everyone’s a buyer today but big enough sample size there that people would look at it and say this is something I want to buy. And the more product you put in there, the better you are.

Jason: Say they sign up, how easy is this to get connected into the website? Is it just some javascript code snippet that would be added to a page, or just some HTML like an iframe…

Don: Good question. It’s not iframe, it’s a hyperlink linked with their subdomain that gets added to their website and we can put it right over… For example the DMI franchise is rolling this out to a lot of their franchisees. We spoke to their website company and made sure that the logos and the colors and all that was consistent in how they wanted the brand to look for all DMI franchises and put it out there so they have the same experience, it’s stuff like that. It’s not a massive task, it’s a quick task of getting it up and running. They don’t even need someone familiar with website development on their end to put it up.

Jason: Fantastic. I would imagine besides that, they’re able to feed in maybe their list of clientele, or how do they get clients using or into this system?

Don: They send a file of their clients and their leads, and we separate the two. That gets loaded and tagged to them in the CRM for good. Anytime they do anything, they’re forever tagged to them. We look at the clients one way, we look at the leads one way, and they get a mail from Jason at ABC Property Management saying hey, we just implemented this new tool, come check it out, here’s all that it’s got. A series of mails inviting them to come check out the tool, what’s in it, and then we engage with them as investor support for Jason’s property management company, help them utilize the tool. That’s all branded to Jason, it’s not branded to anything else, it’s all branded to Jason. The backend calls are made to investment support to help them use the system, that’s all Jason.

Then, they start receiving some weekly properties that are hot in their particular market. If they put their hand up, we answer questions and take [...].

Jason: Great. The bottom line, everybody listening, that business owners are all thinking is this makes me money, right? They’re getting the real estate deals, they’re getting commissions on the real estate deals, anything else that I’m missing?

Don: They get a door...

Jason: And they get property management contracts.

Don: Yup, and let’s say for example we have property managers in California. A California property manager’s customer wants to buy in Austin, so the Austin person then can get a referral from the California buyer because the California buyer is not finding something in the price range they want in California.

One thing they always ask, our customers, is do you want to show only your market or do you want to show all markets? There’s pros and cons to it. If you only show your market, then that investor can only buy in your market and that’s all they get and you always get the door. The con is if they ever decide to buy somewhere else, they’re not going to buy through you because you didn’t show that.

Or, you show all markets and then if they do decide to buy somewhere else, then you get a referral fee from that. By the same token, you get inbound traffic from someone else. That’s the idea of that. But we give people that option, because we can show one, or two, or all. Most people tend to keep it fully open, but when you have people that say I don’t want to show anything other than my city. We’re okay with that as well, it’s the business owner’s choice.

Jason: So this has other potential benefits of really setting up a referral network, getting some deals.

Don: Yup. We’ve had situations where property managers just got a door, because somebody is buying a property. Then the person says they need a property manager, so then we get the door. Sometimes, they get the whole thing. If an investor wants to buy in their market, then they become the buyer’s agent, obviously they give up a referral fee back into the system so others can get paid. They get the door and that commission. At the same token then, they refer someone, they get a fee from that person from the door and the commission; it works both ways.

Jason: Alright. Don, this sounds fantastic. Is there any other common questions or things that you think people listening might be curious about related to this? And then how can they find out more?

Don: I think one thing we had expectations on, this is a long term relationship with your investors. Let’s say you’ve got 400 doors and 150 investors, the investors get exposed to it. It’s not that okay. In 60 days, they all come in and say great, now that you’ve given me this, here are 10 properties that I’m going to buy. They will buy over time, but what’s important is they are now much more connected with your brand and you start seeing deals happening with these investors when they decide to buy.

We can’t force them to buy, but we give them a reason to buy, and we give them a product to buy. That’s the one thing. The second thing is we do need the property management person trained on the system. We have a training program and all of that. When we transfer that investor in the right time, they need to be able to use the system to find the next property and the next one if this one doesn’t work out. Because ultimately, they’re the one fulfilling that.

A property management company sometimes has not been in the sales process, they’ve always been at the other end of the food chain. They’ve got to think that if they want to climb the food chain, they do need some competence and strive to be able to go and get that property and close the property with the investor. Although we’re taking a lot of the analytical work in a way by systems giving them all of that. They get a very clear buy box, but they still need to fulfill that buy box.

Jason: Let’s wrap this up, how would people find out more about your Investimate product, and how would they demo this and learn more about the business, and how do they get started?

Don: They would go to investimateroi.com, in there is a little video that talks about the product, an explanation of what it does for property managers and realtors, and an ability to set up an appointment for a demo. The best thing to do is always look at a demo. If they go there and they schedule a time, just like we’re doing here, we’ll get them on an online webinar and we’ll take them through the product and explain what it does, and see if it’s a fit for the business. It’s simple enough, yeah.

Jason: Fantastic. Don, this has been really interesting, really insightful. I think a lot of people’s wills returning as they listen to this. I think that you’ll probably be getting some demos of people checking it out.

Don: Great, thank you.

Jason: Thanks for being on the DoorGrow show.

Don: Glad to be here.

Jason: You can check that out at investimateroi.com. I appreciate Don being on the show. If you are a property management entrepreneur that wants to add doors and make a difference, then make sure you check us out at doorgrow.com. If you want to join the most awesome community of property management entrepreneurs on the planet, we are hanging out inside the DoorGrow Club. It is a free Facebook group, you can go to doorgrowclub.com, make sure you join the group. We will see you next time on the DoorGrow Show. Until then, to our mutual growth. Bye, everyone.

Download this Episode

May 14, 2019

Are you sure your kitchen table or big-screen TV will fit? If you’re interested in renting or buying a specific property, there’s a few steps to take before actually visiting it. Watch a virtual tour video and get pre-qualified.

Today, I am talking with Michael Sanz of Neesh Property, which started in 2009 and has more than 650 doors. We discuss the benefits of automating property showings, including the opportunity to spend more time with people and to travel. Who wouldn’t want to operate a property management business from beaches around the world?

You’ll Learn...

[02:25] Purpose of Neesh Property: Holistic real estate that helps people buy, sell, rent, and arrange financing.

[03:20] Same Startup Suffering: Michael struggled to start a business, grow new doors, and retain customers.

[03:37] Identify and Prevent Problems: Michael controls and protects his business and simplifies his life through systemization and automation.

[05:45] Workforce Reduction: Michael went from 18 to 1½ staff members and replaced them with property management software to save money.

[07:58] Eliminate Office Space: Doesn’t affect how you do business.

[09:43] Competitive Advantage: Neesh Property closes deals and acquires new business by leasing properties quickly.

[10:30] Retain Relationships: Be client-focused, not location-focused when managing properties.

[12:40] Learn from Mistakes: Try and implement new things, which may or may not work completely; pivot when necessary.

[14:29] What’s the problem? Any problem, big or small, should be documented and automated to disappear.

[16:10] Build Knowledge Base: Take time to make “how-to, what to do...” videos, recordings, and other visuals to help people understand processes/procedures.

[21:05] Leverage People as Process: Create core team of people who are thinkers and decision-makers.

[27:38] Virtual Tour Stats: Neesh Property gets over 85% of its real estate booked based on the virtual platform and averages 1.8 showings per property.

[31:05] Good Tenants Gone Bad: Rather than giving best to the bad, give it to the best of everyone; mesh type of tenant to property.

[50:55] Common Beginner Pitfall: You don’t need to be cheaper than everybody else to get started and compete; change your value proposition.

Tweetables

Save Money: Replace staff members with property management software.

Be client-focused, not location-focused.

Meaningful Connections/Conversations: The rest just falls into place; it’s all systems.

Automation offers the opportunity to simplify your life and spend more time with people.

Resources

Neesh Property

Michael Sanz on Facebook

Ricoh 360 Camera

Matterport: 3D Camera and Virtual Tour Platform

DoorGrowClub Facebook Group

DGS 77: Homes Not Houses with Chris Litster of Buildium 0

Transcript

I am welcoming all the way from across the pond or even further maybe, Michael Sanz of Neesh Property Management. Michael, welcome to the show.

Michael: Thank you very much for having me.

Jason: I’m excited to have you. You’re a really cool guy. I got to connect with you in the past in person, which was great to meet you in person, and you’ve done some really cool things. But before we get into some of that, and today’s topic for those listening, is automating property showings. We’re going to be talking about that. But before we get into that, why don’t you give people a little bit of background on you and let everyone know why I think you’re so awesome.

Michael: Thanks for the introduction and thanks for having me at the conference in Missouri last year. It was amazing. Perfect. As Jason said, I’m Michael Sanz. I am from Australia, from Melbourne, and I have a company called Neesh Property Residential that has been going since 2009, has over 650 doors. I started how everybody else started out in real estate and started from zero, or how much people started, started from zero doors. I had a new relationship started at the time. Add the pressure and the stress of a new relationship coming into a new business, setting all that up.

I started from the study nook in an apartment that I had. I had left a previous business. It was quite a successful business. Left the partnership at the time and I started Neesh Property. What was Neesh Property to me? It was a holistic real estate that help people buy property, sell property, rent property, and arrange the finance. It’s holistic all under one roof.

I had suffered the same problems everybody else has suffered from starting a business, trying to grow new doors, I guess retain business when people sell their properties or go to other agencies. I spent a lot of time methodically going through all the pros and cons of a property management business and I really started to systemize it, automate it, and not let the business control me from an early point, but how I could control my real estate business and what protections I could put in place to make sure that I could do some hyper growth, retain the customers that I had, and simplify life.

A lot of people that know me would have say that I will operate Neesh Property from many beaches around the world. I would close down the company every Christmas time for two months. In real estate, people say, “That’s unheard of. What about maintenance? What about all the problems?” But I identified all these problems and I’ve been out of able to do a lot of travel, and I’ve spend a lot of family time while automating the business.

Jason, as you’re talking about today, automating how I show properties and really break down that process meant that I could be in Missouri and show people property before I went on stage, after I went on stage, and successfully lease property without really having to do anything at all.

Jason: This is wild. I think everybody listening goes, “Michael’s some sort of crazy, weird robot. This is some magical impossible thing. Nobody else can do this.” You’re maybe some sort of savant or guru. But you started your business and from the beginning had this intention of systemizing things and keeping things off your plate to keep that space, and some people, their intentions and focus is very different. They build a business that’s very difficult to manage and to run.

Paint a picture. You’ve got 650 doors right now, I think you’ve said, right?

Michael: I just sold a bulk of that and I’ve got Neesh Property. I’ve automated even more with a new portfolio, but that’s for a whole other conversation.

Jason: Help people understand your business logistically. How many team members do you have? I think this is where it really showcases how different your business is than most companies that are at a similar size.

Michael: Sure. At a point with the business, we had about 18 staff members. We had acquired another smaller business, and we acquired their team, and we had an office. A lot of which goes against the grain having office to me. But when I acquired another business, I took the office and it had a receptionist, it had a business development person, it had an account, they had all these people there. I couldn’t see, with total respect to their role, I couldn’t see the purpose of it, so I knocked them down from 18 down to 1½ staff members. One full-time property manager and one part-time who did routines and edit some showings as required.

Jason: Wait. So, you went from 18, bring on another company, and then you whittled that down to 1½ team members.

Michael: Yeah, correct. I couldn’t see the massive need to have all these people doing accounts when a lot of the property management software already did all the reconciliation. I was just having a bum on a seat to press a button to reconcile. I couldn’t see the purpose of having a receptionist when there are people there who could answer the phone, so we put in a good IVR, a good voicemail system, and we educated.

We identified that a lot of the calls that were coming in were from tenants either trying to report maintenance or [...] it was. Then we put in automated responses there, too, and if there’s any business call, “Press one if you’re a landlord, press two if it’s new business,” and then it would come through to my cell where I could answer and respond to it quite fast.

Identifying the flow of calls, the type of calls that are coming through the office meant I no longer had to have a receptionist there. In Australia, the wages are quite high. We’d be paying someone $50,000–$60,000 to sit at a front desk, to greet people if they came in. We have also identified that as property change, people will less and less likely to come to an office. Tenants wouldn’t necessarily walk into the office and let’s say they did walk into the office, we would be there to greet them but no one was really walking in. Owners rarely walk into an office anymore because they could call you, they could video call you.

We ended up getting rid of the office. We have spent from a big 250 square meter office place to a two-bedroom apartment, and guess what? It didn’t affect how we did business, didn’t affect us picking up new business, didn’t affect us losing any business, and the world still spins. It’s not chaos. For us identifying all these headaches we’re able to see what mattered. If the team couldn’t adapt to technology changes, video, virtual reality, automated IVR systems, and things like that, then there wasn’t really a place in the business for them, respectfully. I actually have one property manager leave to go with a company where they still did paper condition reports because that’s how she wanted to do them.

Jason: Right. You’re welcome to it. That’s so funny. Okay, so this will make a lot of sense and I think you and I have both significant, nerdy, technological side to us. This stuff sounds obvious to me and maybe obvious to you, some people listening maybe not so obvious. If they have all these questions, “How would I do this? I would I do that?” It’s scary. But if you make that your intention and your goal, you’ll figure it out just like you figured out whatever you’re doing now.

One of your big competitive advantages now in closing deals and in acquiring new business is your ability to lease properties so rapidly. Paint this picture of how rapidly and how different your leasing process is, just to prime the pump here.

Michael: To put it into another perspective—I know we touched on it previously—we were full suburbs. We manage properties in over 84 suburbs and we also have properties in two other states, which was Sydney and New South Wales in WA. WA is a four-hour plane ride and Sydney is 1½-hour plane ride from us.

Now, we weren’t insane, crazy totally. We only manage properties of the clients that we actually had on our book and we did that so that we could retain the relationship with them and we would appoint other local agents to help with open inspections or routine inspections, or things like that. And because I’m a frequent traveler, when I was in the area, I would pop in, say good day to the tenants, and just touch face that way, so the owners knew that they are getting full kind of service.

In Victoria, it is very much managed by our office and again, we are client-focused and not location-focused, which was one of our main selling points and is quite attractive to landlords that we had. Because we also offered mortgage brokering, we really didn’t do too many sales, we were mainly property management and then we offered mortgage brokering we saw the value in that. If it was [...] other agents that could help us do the menial tasks.

It wasn’t a headache for us, we didn’t stress about it, but we covered a lot of space. You can imagine when properties come up for rent. It’s cyclical because people [...] properties around at Christmas time, they go home to their families and their friends. We would have sometimes 10%–15% of the book would start to come up for rent and you can imagine the franticness of trying to get out all the inspections, deal with tenants, vacates, and all those headaches that came with it.

Now, it’s probably 11 where I started [...] this. This wouldn’t be a problem with the spread of properties. As I sat down, I started writing down all the problems that I could have. Petrol, time on the road, who am I going to have, how many staff members I need to to do this if I’m going to have potential growth? How do I automate this? That was the biggest thing. How do I automate this? What if it’s Christmas time and I want to go away on holiday? What am I going to do? The selfishness in me also came out because I still wanted to live and being an owner-operator. What would you do?

I identified with myself that if I made mistakes, that was okay because being a business owner, if we don’t try and implement the things we’re looking, that ain’t worth. But it doesn’t mean that it’s not going to work in its entirety. It might mean that you just need to pivot a little bit and change what you’ve been doing to give another go. I had to automate the whole thing and I started the journey.

Jason: I’m hearing a process here and I think you’ve mentioned this twice now. For those listening, you may have caught on this but it sounds like you have this mental process that you go through probably constantly where you list out potential problems, and then you sit down and figure out what are the solutions, and then you have this intention throughout that whole process of, “How can I have vacations? How can I make sure that I don’t have to always be doing it?” Which is a very different mindset than most ppl have. They’re just figuring out, “How to do I keep the business running? How do I make sure that we don’t drop the ball?” And you’re like, “No. How can I,” as you put it, “take Christmas and not have to work? How can I go on holiday and not have to do this, and it would still work?” That’s a different problem to solve.

As entrepreneurs, we’re great at solving problems. But if we don’t give ourselves the right problem to work on, our subconscious isn’t going to work on it, our brains are not going to work on it, we’re not going to find those solutions. We stop prematurely at something superficial and that’s a whole level of depth to go beyond just making sure things work, it’s making sure things work without you. Maybe just describe that. What do you actually do? Do you just pull out a piece of paper and you write all the problems?

Michael: A big point when I had staff in the office is that if anyone reported any type of problem, big or small, it had to be written down. If an owner said, for example, “I can’t reach you on your mobile phone.” Or, “I don’t understand the statement,” just general questions. If someone doesn’t understand the statement, what we did was we recorded what the landlord income statement meant. “This is your name, this is the date and everything.” We do a video. We do a screenshare/screengrab video and in that was a link. If anyone asks anything about statement, it was there for them. It was in one of our FAQs. People could see it. All of a sudden, we didn’t get all these calls.

We worked out any problem in the business. Someone turned out in our office at 7:00 in the morning and said, “Why aren’t you open?” We address those things, we have better signage on the front door, and then all of a sudden, all these problems that a business would have were just disappearing and it was automated. By using video, by using written text, by having window displays, just simple things, the business became automated. So much so that religiously we close before Christmas and we open up towards the end of January, so that everyone gets time off to spend time with their family.

Jason: And everyone being your 1½ team members.

Michael: When I had a lot of team members, they were loving it big time. If people want to go on holiday, they can go on holiday because the business can run.

Jason: All right, so this is really cool. Basically, what you’re talking about is you built a knowledge base of frequently asked questions and leveraged video screen shares, recordings, showing them how to do things so they visually could see, hear, and understand what needed to happen. As they would go through these and have these questions, or you send them a link to this frequently asked questions or in your knowledge base, or you send them this video, they would watch this video. The magic of video is they would feel like you’re right there, walking them through it, tell them, they’d hear you, see you, they feel like you’re taking care of them, and you’re not even there. You did it one time and now, it can be used for 650 different people or however many clients ;that you have. They can go through it multiple times instead of just once because they may not remember. But they’ll remember, “Oh, there’s this thing I can go to to get it.”

Michael: Correct. A lot of the agents who I would speak to is on video. I don’t have to speak to video where it takes time, I don’t have enough time. A lot of the videos early on that I did [...] showing or like a routine inspection or open for inspection. I would just have the camera on a tripod and while I was waiting for people to come, I would do a video. “I’m at this property here. Look at this one,” or, “This is a leaking tap. This is how we address it. This is what we do.” Just small videos and I just built up content.

I had the tenants any problems, what to do if it’s raining. What to do if your hot water service breaks. What to do if your dog runs out to your next door neighbor. Just simple things I turned into a video so I didn’t have to answer again and again. Again, this is like I’ve touched on before when people could call up and they address the problem or an issue or concern, we try to turn that into a video so that it was answered once, solved 100 times.

Jason: The trick is that if you’re going to have to answer ever, once, take note of it, then put it on your to-do list to make a video so you don’t ever have to answer that again.

Michael: Yeah. I think as business owners we need to give ourselves the emotional permission today to take the time, even if takes us half an hour to do it, so we bank up future time. That task is going to take us a 30-minute phone call or whatever it is, we spend 30 minutes recording it now, and you’re going to have that conversation a hundred times, you just saved yourself 50 future hours and you could be doing other things.

Jason: Absolutely. We have done the same thing with clients who go through our program. I used to coach them all directly, but shifting it into video content allowed me to make sure that I said the same thing and got the best information to each client, and it allowed them to watch it more than once. My memory is not so amazing that I could remember every single thing I’ve said to every single clients about every single topic and not miss something. But I could put it into content. If I get a bunch of questions, I can add more content.

I think some people would say, “Jason,” or, “Michael, you guys are really lazy.” I think there’s brilliance in that. I wouldn’t call it laziness; I would call it, we don’t like doing stupid stuff over and over. I mean, really simply, and that’s really frustrating to have to do redundant work. But some people, they love that. They would just do the same thing everyday. They love doing that. That’s not me. I would guess that that’s not really you, either. You like being able to have freedom and not have to answer the same questions over and over and over again.

Michael: That’s the definition of insanity, isn’t it? Doing the same thing over and over again, getting the same result. I can’t understand doing the same thing over and over. I guess as business owners, we also get caught up in the really small things, and those small things we think become really important but they’re not. I’ve got some VAs that do the really menial, small tasks that I don’t even have to think about. Things that our software doesn’t do that a VA would do.

Get out of that mindset that you have to do these really small things because it’s not important and when we identified that owners and tenants just want to get that problem resolved. If it needs to get escalated, then yeah of course, take it on. But the small things, they don’t really care who answers, it’s fine. As long as it’s clear, their problem is solved, they can walk away happy, then they’re good. Don’t stress.

Jason: So, part of this automation, you’re leveraging technology, you’re leveraging video, you’re leveraging a database or knowledge base of frequently asked questions but also, you are leveraging people as process. You’re bringing people almost in a position of almost operating software in some instances. And then you have a core team of people that actually are thinkers and decision-makers that’s really small based on what you said.

Let’s get into then the topic at hand, which is automating property showing. How can those listening start to move towards automating property showings and what are the benefits you’ve seen by doing that? Let’s get them excited about the why they should do this first.

Michael: As a business owner, having staff members and having multiple properties that would come out open for inspection and also understanding that tenants are really demanding, they want to see the property, they would call you up and say, “Is it open now? Is somebody there now? Can I go now?” And then having a staff member get in the car, drive half an hour listening to music, speaking to their family and friends, doing whatever they want to do in the car, get to the property, wait for the tenant to turn up, show them the property, have them say, “Oh, yeah. It’s nice. The walls really look like they did in the photos.” Whatever it is, or they love it and again they’ll buy for it. “Can you wait for my friend to turn up? My partner’s on their way.” All these headaches. They do the inspection and then they spend another half an hour driving back or getting lunch on the way, or however long it is.

One time, okay, but if you replicate that, you’ve got 8, or 10, or 15 properties for rent at that time, that’s a headache for any company because of all these inefficiencies on the road. I identified, “Okay. Well, what do we do?”

My wife was working for a ticketing and event company based in San Diego. She was running it from Australia, it’s the operations. We’re in San Diego one time, I had this massive 3D 360 camera. I was going through all the theaters and from every seat there would be a 360 [...] so that people, when they go to buy a ticket, they could see their exact view of how they’re going to see the stage.

I was like, “Hang on. Why can’t I do this in real estate? What’s stopping me from doing [...]? This is so simple.” The camera was huge. It was massive at the time. Even three months later, I couldn’t find an actual camera to do it. What I was doing was going to the room and taking 100 shots everywhere and then stitching it together. For one image it was taking way too long.

At Christmas time, I was in London, closed the business down, before virtual reality [...]. It can be done. I was walking up the high street in London and I just thought, “I need to find something simple, cheap, to get the job done, and save me more time.” I just went on the phone, I looked at my phone, and I found a local supplier that had the Ricoh 360 camera. It has just been released. I went out and picked it up, and from that point in time, everything I did for real estate, for property had a 360 video.

And went then into step two, and I made sure that all the rental properties had a normal video, just with a smartphone or SLR. From that moment on, when I brought the 360 camera, I really hit all our properties hard. Before I go with 360 virtual reality and video, a lot of people that I speak to, they go out and buy the camera, they’ll do one tour which generally happens after the tenant has vacated and they’ve already had marketing for 4–6 weeks, they’ll do the tour and they’ll say, “You know what? Michael, I tried that. It’s not for me. Didn’t help me get a tenant. It was no good.” That’s the biggest feedback I had.

That’s cool. That’s fine. But for me, I want to persevere. I made sure that every single property we came up for rent, had a 360 virtual tour. Also in the start, it didn’t help with every single property because I had marketed without photos for four weeks prior, and I was able to find tenants thereabouts, most often than not. With the 360 virtual tours, it was the next time that it came up for rent. A tenant would give me notice to vacate. The day they gave me notice to vacate, the virtual tour went up on all the real estate platforms that are out there. We have the video and we have our photos which are okay. They’re good, they’re okay. But from day one, people could start to see the property without me having to worry about booking an open for inspection and the condition of the property is all boxed up, or the whole family’s home or whatever excuse the tenant was, people could start to see the property. That started to change things.

Just to reiterate, if you’re starting off, you have a property that’s coming up for rent, the tenant’s moving out, you can do the 360 tour afterwards. You may not get the hyper result that you’re expecting. Don’t stress. Replicate it on every single property you’ve got and you will start to see massive change from the next time it’s for rent and every time after that. Don’t stress. Give it time. People fail because they give up straight away.

Jason: And then each new door that you’re getting on, you’re going to do the virtual tour at the beginning so you’ll have that moving forward.

Michael: Correct. I got to the point where if a tenant gave notice to vacate, I went in there, and I do the 360 tour with all the furniture in there as it was. I didn’t put that on publicly but I was able to show people with the tenant’s permission, just give them a link, and remove the link after they see it afterwards. I wouldn’t get it publicly on the real estate platforms but I would have the tour and I would give it to people. That changed everything, too. Tenants were okay with that because you can edit the 360 images to blur out photos in the wall and things like that. That was pretty good. I also just did on the iPhone walk-through videos that I could also comment on. I would take just photos, too.

We had over 85% of our real estate booked on virtual platform. Can you imagine, Jason, having 85% of your business, that people can view the property without you having to worry about putting a lot box on, be physically attending the property, and having the issue of staff or even yourself going to have to show that property multiple times? To touch on that, we were averaging at 1.8 showings per property and I’ve got to cancel one showing per property on average.

Jason: No kidding.

Michael: Huge time savings. If you were to quantify that and you’re breaking out 15 properties a month, let’s say, that’s like $150,000 saving in a year, of time and profit based on our letting fees. Our letting fees are small than American letting fees. It’d be significantly higher in America but for us, it’s about $150,000 just the base saving in 15 properties a month.

Jason: Oh, yeah. So, the cost savings compared to the cost of getting the digital cameras and maybe the little bit of work and labor that would take to get these virtual tours done and everything, it was an obvious no brainer, financially.

Michael: Obviously, yeah. For me at the start, I would have spent a couple of thousand dollars, maybe more, trying to really solve it. I have a lot of cameras now, a lot of VR, a lot of 360 cameras, and I’m still using the same one that I bought years ago which was the Ricoh. But I’m trying to find the next camera that gives me more depth immersion like the Matterport but something that fits in my pocket. So, for me to do it, if it does not fit in my pocket, I’m not going to take it with me.

The Ricoh fits in the pocket. I think it’s $170 or something like that on Amazon. A tripod is $30 or $40 on Amazon. To host 22 platforms of the year is $20. The platform that I use is Vieweet It’s one of the cheapest one out there. It’s robust, it’s simple, it’s no frills. If you’re an agency, you’re just starting out, and you’re looking for cheap ways to do 360 automated showings, $130 for the camera, $30 for the tripod, $20 a year to list 20 showings that you can put up and take down. A lot of people don’t have more than 20 properties available all at once.

Jason: It's called Vieweet?

Michael: Yes. If you're in $200-$250 US, you can be up and running today to do these things. But just remember, you may not get that sprinkled dust straight away. It’s something where you build that new catalog that does work. Results have been quite fast because I kept at it and you will, I can’t say, you'll get the same if not similar results that I was getting because what it all sold for us—that’s just kind of the odd part of things, Jason. Our property to more people around the world in different that [...] the property. Rather than having to rely on people to come into a lock box or view the property physically, they may not have been the best quality tenant.

Rather than giving the best to the bad bunch, we’re able to give it to the best of everyone. Anyone who wants to see it within the markets to high-end income, at least they could go to relocation consultants that were actually being paid by people to come into the country to show them properties. We were showing it to the people before they go to relocation agencies in the end. If they will apply, they would inquire, “Hi, Michael. I'm actually relocating from America or Europe. I'll be there next month, try to arrange a viewing.” I’ll send in the link. They view the property. They don’t need to worry about looking at 10 properties when they get here. We can do the process, we can get them out of Skype or Zoom.

At the end of the day, good tenants can go bad. Make sure you get landlord insurance if you can get that. We were so efficient with what we did and that’s probably for another conversation, but we got rent arrears to 0%. Not only will we have to get the best tenants in the marketplace, we get the best tenants that could afford to pay rent and not have any arrears and it solved a massive problem for us too. We are probably at about I think 3½ of rent arrears sometimes because people, they’re just lazy. By changing the type of tenants that we had, also made all the knock on effects that we had so that our arrears is 0% vacancy because we’re able to work credibly with our leases to make sure that longer leases we had better type of tenants.

We’re also able to mesh the type of tenants to the property. For example, if we have an application that was someone 50 years plus as opposed to 18-25 year olds. An 18-25 year old would be more transient and they wouldn’t stay on the property for a long period of time, maybe 12 months. But someone who’s older is typically settling down, they don’t want to be moving around everywhere. We have a bit of a tenant selection too.

Jason: I realized it might be a little different in Australia than here though.

Michael: Well, what we did inside the office, we can verbalize it to the people that apply.

Jason: Got it.

Michael: No one from Australia is watching this, yeah? No tenants that I had.

Jason: Right. This all makes a lot of sense. You have 0% vacancy rate. You’re renting out some of these places before they're even vacant because you're marketing them from the second there's a notice. You're getting people out of state or out of country that are able to look at it. I think it’s brilliant that you've got partnerships you've created in alignment with relocation agencies and relocation agents. I think that's sharp. All of this sounds really fascinating and this is something that anybody can do.

Michael: Anyone can do it. Even like staff members. You’ve got people who work for bosses, there's no reason why [...] to help automate your showing. If a virtual tour or a video, or someone contact you at 10:00 o’clock at night and you're this type of person that picks up the phone at 10:00 o’clock and tries to make a time, you can send them link that’ll pre-qualify them. The good thing about UVR, it shows you the room, the whole room. They can be looking at the whole kitchen. They can be looking at the whole bathroom for so many times you go online and you just see a corner of the bathroom which shows the tiles, the toilet, the shower, and the bath. It eradicates all of that, it’s gone.

I think I showed you too, when we got to the actual property, the other headache was, I'm not sure if my table would fit, or the fridge might fit in the cavity so then we included an incorporated AR, so the augmented reality which was just another boat. With the AR, you can record the screen, so you can be at the property while it’s taken and actually do a video recording of, “This is where your catch goes. This is where the fridge goes, and the TV goes,” and put the furniture down. Then you can send that video to people too when they inquire about, “Will it fit a king sofa bed, or what size is the fridge cavity?” Because people are visual, mostly.

Jason: How are you doing that? How are you putting in beds, virtual beds and things like this into a video?

Michael: The app that I use is a free app. I love this stuff. It isn’t going to cost anyone here. Housecraft. Now that’s free augmented reality application.

Jason: Housecraft, it sounds like witchcraft, it’s like magic. Housecraft, okay.

Michael: It is magic. Again, I have all these tools because they're objection handlers. I don't need to over complicate things because then it just starts making problems. These are free things that anyone can be using. Anyone can do anything that I've been doing. None of it is hard. It’s just I have a better use of my time.

Jason: Yeah. You’re using Housecraft, you're using Vieweet, you’ve got your Ricoh camera, are there any other technological tools that help you automate the showing thing?

Michael: Basically, how it would work for us was a tenant will give notice to vacate or we would have a brand new property come on. We would have the tour or take the tour. We would put that as a link on a description. A lot of the feedback I had from people around the world was, our property software, our showing software doesn't allow us to put a hyperlink in there.

We just put it in the ads, we put it in the ad there too. We had every second photo for us was, “Did you know this property is in virtual reality? Make sure you click on the link in the description.” When people are looking on their smart device, because most people are probably looking ad property searches from their mobiles, it’s important that we could grab their attention with a nice bit of photo, grab their attention saying, “Hey, we've got a virtual tour, or a video, make sure you look at it and prequalify.” Rather than coming to the property and saying it’s for them. If someone did call and inquire the questions was, “Great. Have you seen the virtual tour?” If it was no, it’s like, “Okay, here’s the virtual tour,” and they all had to see it. We would not go to a property unless the person had seen the virtual tour.

Jason: Right. Virtual tour first and then if you've watched that and it's still a go, then we will show you the property.

Michael: Correct. When we did that, when we went to the property, we knew that it was really just a case of them checking if there's a smell, just their general feel, their juju. It was basically they’re going to apply for the property. Typically, if I went to the property, there's a 93% chance they got the property, and it was 96% that they would apply or they’d rent the property.

Jason: Because the virtual tours have filtered out so much.

Michael: Prequalified.

Jason: Now, in the photos where you doing stuff like box brownie and like this kind of stuff or are we just getting photos?

Michael: We change it to make sure that the header photo, the main photo in this sort of style—we’d have a blue sky, green grass—it was just a nice attractive image so that people would click on that, like a clickbait basically. It'll look nice, they click on it, and then the next image was the virtual tour. They knew that there was a virtual tour there and then there are the other photos. They were the only photos that were relevant like the way you actually see the room. If you couldn’t see the room or it was cut off, we wouldn’t show it, because the virtual tour was going to show the property in its entirety.

This just meant that I would not put 20 photos up of a half-baked house when I can put three photos up, a virtual tour video, and a walkthrough video—far greater impact. That’s why we’re leasing properties four times faster than our competitors, and we were getting more than double the amount of views on all our properties according to realestate.com.au which is a massive property platform in Australia. What we were doing was, no major cost difference to competitors, but we were getting twice the people looking at our property, and four times faster with being leased.

Jason: Michael, this sounds really incredible. Having all these stuff in place, it sounds really low cost, and it sounds like it actually saves you a ton of time, and a ton of money to get these things implemented. Now, what I love to do is connect this to how is this helping you grow your business. Obviously, it’s reducing cost, it's reducing staff, but this sounds like a huge competitive advantage selling point when you're pitching to new owners to say, “We have zero vacancy rate. We’re managing hundreds of properties…” which is unheard of in our industry, “…and we can we can get this thing taken care of and lease it out really rapidly. I've got the cameras on me, I'm ready to go. Let’s do this.”

Michael: Correct. There’s a lot of white noise and noise generally in property management. When you're going to a listing presentation, it runs based on the same topics. “We collect rent. We have low vacancy. We are fantastic. We have good systems.” You can basically walk into a presentation and know verbatim what people are going to saying. If somebody inquired about renting out a property, they will get an email from me with our reviews, true statements, and things that we do differently.

When I would go to the appraisal, I wouldn't actually bring anything other than a set of virtual reality goggles. For me, I didn’t go in with a booklet. Everyone kind of expects you to walk in with a booklet and pamphlet like all your competitors do. But me, it’s straight away, “Let's work on that trust that rapport with the owner.” I would walk into the presentation, I put the virtual goggles down the table which is a gimmick, they're a gimmick, and then I put them on the table and then I say, “Mr. and Mrs. Landlord, so tell me, what do you love about your property? What are the tenants going to love about the property? What would you do differently to the property that tenants might also think that they wouldn’t want changed?” I get them speaking about it.

None of it is about my fees, none of it is about my service, none of it is about anything else about me, it’s just about them. Then it gets to the point where, “I can totally see why people fall in love in this property and it's so important that we show people what this property actually offers. Here are a couple of ways that we can do that.” Bear in mind, by the time they've already got to ask and called us, they've gone and seen our Google reviews. They've seen our social profile. They’ve already assessed us when they make the phone call.

Jason: Sure.

Michael: It’s so important that you’ve got some social proof and some history there. If you're just starting out as an agent, get reviews, get some social proof because you really are fantastic. As people, we’re fantastic, and there's so many great attributes. If you're starting fresh, you don't have to look fresh. Jason, you're helping build websites. You can make someone who's just starting out look as a major player in the marketplace.

Jason: Absolutely. I tell potential clients, there's no reason why a company with zero doors or even five doors has to look any different than a company with a 1000 doors. They can have just as good a branding, just as good of a website, and we can help them with the reputation stuff. We have our service gatherkudos.com for those listening that you can check out, which helps you facilitate or lubricate I guess if you will, that process of getting more reviews from clients.

Michael: There's no reason why you can’t. “I don’t have clients to get reviews.” “I'm sure you've done business with people before and they can leave you reviews.” That’s all you need, just that momentum. From the time that we’re meeting with them, they know a little bit about us. I'm not concerned about any other services because they all know that we collect rent, and we find tenants, and we manage maintenance, and we do all that stuff. It's going to the owners that we will love their property, and really focus on the things that they love also, and identify the weaknesses of the property too because it’s important for us at the start the owners to acknowledge their property may have some shortcomings.

They wouldn’t have to have that awkward conversation later. The prospective tenants said that, “I like the pink wall in the kitchen.” We get the owners to draw out what they think is needed in the start, and then it sets the time. Then I bring out the virtual goggles, and I say, “This is one way that people are really going to immerse themselves in your property from their own lounge room. We also had virtual goggles and Oculus Rift in our office, so when people came in and they want to get a rental list, we stop giving out paper and we would say, “What are you after? A three-bedroom, two-bedroom?” And give them the goggles, and show them a property.

We have far greater success than coming in, picking up some paper in the office, leaving, throwing it in the bin later on for one property they might be interested in. We cut down on paper too, Jason. That was a pretty good experience. We went paperless. For new owners, they could say that we were focused on serving the customer, rather than they burdened with admin and just a slow death in a real estate office. We could show them some of the other tours we've done. We were doing drone work too Jason, where we would showcase the aerial view of the property in proximity to shops because that was another question that people would say, “Probably looks great, but what's it near?” In Australia, with Google maps, sometimes, they hadn't caught up, so the area would look like just massive farmland, but actually, they’ve built up a state with shopping malls, and freeways going through it. We take aerial shot, and show it from what it was near. With owners, I think, I was at 140 doors and 141 appraisals.

Jason: You show up for these initial contacts at the property, or these appraisals, or whatever you're doing, and you would pull out virtual reality goggles, and set your camera there, and start describing what you do.

Michael: Correct. Now, fast forward a few more years, we didn’t have to go to the property anymore, because I had the virtual tours online, and people can see them, and it would tie on my websites, so people could see that too, and they got to the point where people would make an inquiry, and I will send them a video message. They're already seeing all the proof statements, and a video message to start the initial conversation. I didn't have to meet all these owners, I try to meet all the owners. Sometimes I make time for if they're interstate, they were overseas, whatever the reason. I found other ways to get inside the living room without being in their living room. You have the virtual tours, and then you get the video text messages, and a lot of people will say, “I’m too scared to do a video text message. What if I say the wrong thing?” I say, “It's easy, don’t send it. Just do it again.”

Jason: Right, re-record it.

Michael: If you're doing a video, you can edit it. If it’s not live, edit. If it’s live, I’d say laugh. So what? Make a mistake, we’re human. I will make the same mistake speaking with you, as I would do on a video. Recapping on it, our process was, every property had to have a virtual tour. When I had the staff, they weren't happy going out and taking a virtual tour, because it would take them between 15 minutes to 30 minutes, maybe depending on how many rooms there were. It's a very fast process to take photos and then you just copy them on to the Vieweet platform, and you put the hyperlinks, the hotspots, and the tour is done. The tour might take you 45 minutes to do.

For me, that's no problem at all, if it’s a big one. If it’s small one bedroom place, might take you five minutes to stitch it together. It just depends. The more you do it, the faster you become. Every property had the virtual tour, had the video, had some updated photos. It just meant that as a tenant, trying to select for the property, all the problems were answered. As an owner, we're now looking at other agents online who’s going to rent out their property, they can take the methodical process of photo, virtual tour, application form. That’s very simple process. We then are going to back it up with proof statements, like the rent is zero vacancy. All those other things that were important, because if you guys are doing an appraisal and start just reeling off everything you do, you're the same as everyone else, but if you can show proof statements, then it's 97% there.

Jason: Love it. You can easily send a video introducing yourself, and you can send them link to a page of video testimonials from clients. If you can give them all the social proof, and you say, “Look at how we market the properties.” Send them the link to your rental listings. “Here's an example. Here's a property similar to yours maybe.” Suddenly, they can imagine all of it, they can see it, and it becomes real to them. This becomes this huge competitive advantage in this huge differentiator between you, and other property management companies, and then it's allowing you to close more deals. I would imagine it facilitates word-of-mouth, because people are going to talk about you because they're probably impressed.

I would be impressive if somebody showed up with goggles, and camera, and show me tours, and sent me a video text message. I'd be like, “These guys are on top of things, and they're tech savvy, and they're going to take care of me out of the gate.”

Michael: I guess one of the great things is, I won't mention the exact pricing, but we were full fee. We weren’t competing with, “But that agent is offering a cheaper fee,” anymore. We’re full fee, we’re doing full leasing fee for management estate. In Australia, we can't charge as many fees as you can in America. I wish we could, but we were full fees. I was maximizing every potential fee that I could, so routine inspection fees, higher statement fees. We were full fees, we don’t have to compete with someone. I remember when I started, Jason, and I’m trying to get traction, I sent out a thousand flyers to people and offered a low management fee to people for three months. I got one person out of the thousand that I sent out, that was great, because there were multiple referring client. But starting out, thinking that I have to charge something low, so that I can get in front of more people was one of the biggest crazy thoughts that I had at the very start.

Jason: It's one of the most common beginner pitfalls is, “I need to be cheaper than everybody else to get started and to compete.”

Michael: Yeah. If I just realized back over 10 years ago that my value proposition had to change.

Jason: Yeah.

Michael: “Not with my fees but with my value proposition. How do I not complicate it? Now, I no longer have any other office. I work from a home office. I've restructured because I don’t want to have physical staff. I've got VAs that do all the menial tasks. All the properties that we have are on the virtual platform. I've got no properties arranged at the moment. No rent arrears. Last year, I was abroad seven months of the year. I was in Turkey for two months, Indonesia for two months, in and out of America, or like interstate. I traveled a lot.

This year, maybe four months of the year. If I get a new business, I will have someone go and do the virtual tool for me. I’ll train a simple person who doesn't want to do anything else if I'm not around. I enjoy going to the properties and checking them out. I'm a bit of a property nerd, I like checking them out, seeing how we can add value and connecting. The most important thing for me as an agency was to make sure that we have meaningful conversations, getting rid of all the clutter and all the noise. Instead, we will focus on the good happy goals, the meaningful connections, making sure that we can add value to our customers and our clients. That was our end result, to have that meaningful connection. The rest just all falls into place, it’s all systems.

Jason: You didn't go into it thinking, “I just want to automate everything to the nines.” Your core end goal was, “We want to have meaningful connections,” and then, “I want to have freedom as I'm doing this,” to just focus on that.

Michael: Yeah. Automating it just allows the opportunity to spend more time with people.

Jason: I love it.

Michael: It wasn't to make it so easy that I could travel a lot. It just meant that I need to get better connections. I pick up properties from going overseas. So many Americans travel. I've been in Europe and picked up a new management system [...] abroad. It gives me that flexibility. Also, you get to actually get new systems. People do things differently, so go out and see how other people are doing things to make their businesses better and how can you implement it in your business. It’s so important.

Jason: Yeah. I think I heard a quote the other day that was, “Travel is the language of peace.” The amount of tolerance, and learning, and growth that happens just from being in different environments and different cultures, I remember taking a trip to Israel and it just was so different than what I was used to in the US. Even the checkpoints where kids were holding machine guns. It was just all so different and it was just really eye opening. I've been in Mexico, very different.

You’ve been exposed to so many different cultures. You get to really fill your soul with having this variety in life. I think that's part of why a lot of people are in property management. They love that unique variety. There's all these different unique challenges that come with it. There’s all these unique opportunities to meet unique people. You really got to focus on the even best and highest portions of that by being able to treat that freedom.

Michael: Don't be scared of doing anything. Don’t be scared of making mistakes. Trial it. If it’s not 360 for someone, if it’s not video for someone. Go ahead and trial things and see how it can give you that freedom, but also to be able to engage with people, family, and friends. Imagine if you live in a suburb and you've got a sports club, a church, a local pub, or whatever you’ve got, all these meeting places but you never get to go there because you're so busy trying to do the admin. You're a local real estate agent and you're not even able to local. Flip that upside down. Imagine if you're a local real estate agent doing local things because you have all these other things automated and being done for you while you're networking, and meeting, and engaging with people in your area. Imagine for a second how different that looks.

Jason: Yeah, I love it. I think, Michael, everybody listening has probably by now hopefully felt a little bit inspired that there's this possibility that you've painted for them that is probably for a lot of property manager still outside the current world view. I think that's exciting. I appreciate you coming on the show. How can people get in touch with you and what sort of take away would you want to leave them with?

Michael: Well, if you’ve got any questions about anything we've spoken about today, just hit me up on Facebook and send me a message and I'll respond that way. It’s probably the easiest way rather than giving you a cell number or an email, just go to Facebook, we can connect there. I'm on messenger, it’s the simplest way. Again, I guess the constant message that we've been discussing today is try it; don’t give up, try new things that may automate your business and give you more time tomorrow even though you’re spending more time today to get it done.

Jason: Perfect. This is an episode I will hope that people will listen to more than once. Michael, I appreciate you coming on the show.

Michael: You're welcome.

Jason: I think you gave a lot of value. I'm grateful to you. Thanks for being here and sharing so many ideas.

Michael: Thank you.

Jason: Alright, cool. That was really fun for me as a nerd to have Michael on. Message him through Facebook. If you are a property management entrepreneur that wants to add doors and make a difference, as I said in the intro, then you should be a part of our community. You would love it in there. Make sure you join the DoorGrow Club. You can get into that by going to doorgrowclub.com.

Our Facebook group, there's really cool people in there like Michael, and there's just some phenomenal helpful property managers. People that buy into this vision that good property management can change the world. That what the industry needs here, especially in the US is collaboration over competition. These are people that are willing to collaborate, willing to help, willing to support you.

Make sure you get inside the DoorGrow Club Facebook group and check it out. If you join that group, if you apply and join that group, it's free, but you have to apply. We will give you some free gifts including a fee bible and some other really cool takeaways and gifts over the next few days after we welcome you to the group, just to welcome you aboard, part of our Facebook group. Check that out at doorgrowclub.com. Until next time everybody, to our mutual growth. Bye everybody.

Download this Episode

May 7, 2019

The American dream no longer represents home ownership. Whether you’re looking to rent or buy, everyone wants the same thing: A place they call, “home.” Not a house, but a home. There is a difference.

Today, I am talking with Chris Litster, CEO of Buildium, which helps property managers handle properties, leases, tenants, and units. Chris shares how property management firms should focus on customer service, relationships, and reputation.

You’ll Learn...

[06:53] Service Oriented, Relationship Focused: Avoid treating residents, owners, or vendors adversarially, if you want to be a successful property management firm.

[07:43] Millennial and Baby Boomer generations view home ownership as a burden. When things change, personally or professionally, they want to be able to move.

[09:25] One reason to rent is to avoid dealing with and doing maintenance. Time is better spent focusing on other priorities.

[11:19] Multiple generations want technology from property management companies to automate payments, submit maintenance request, and perform other tasks.

[12:04] People demand a strong relationship with their property management “firm.” Their moving away from using the term, “Landlord,” because of the baggage it brings.

[12:25] Property managers should make their language more friendly and appealing.

[15:50] Property management firms should shift their mindset to be service-oriented and understanding to have stronger relationships and less resident turnover.

[17:40] Property managers have a massive network and influence with owners, tenants, potential residents, and others. They can cause a ripple effect and change the world.

[19:50] Every property manager says they’re the only good ones. All others are terrible. A mindset of scarcity has been falsely created in the industry.

[20:50] Low levels of awareness and perception impact a business’s ability to grow.

The industry needs collaboration over competition.

[22:41] Buildium believes, knows, and has evidence that service orientation and relationships matter.

[25:38] Core principle and goal of technology is to take care of customers and solve their problems efficiently.

[28:53] Strategic vs. Tactical Timing: Expanding and growing a business takes time and effort. Automating processes gives you time to think strategically.

[30:57] SEO Lottery Addiction: Spending revenue on SEO won’t generate ROI.

[37:21] Ladder of Autonomy: Companies that understand their business, customers, message, and differentiator are at the top level and benefit everyone involved.

[38:43] Fundamental Funnel Basics: Brand, pricing, reputation, Website, sales process.

Tweetables

American dream no longer represents home ownership.

Landlord Stereotype: Evil person who collects your rent, but doesn’t take care of things.

Low levels of awareness and perception impact a business’s ability to grow.

The industry needs collaboration over competition.

Resources

Chris Litster’s Email Address

Buildium

All Property Management - a Buildium Company

Constant Contact

MailChimp

DGS 3: Buildium’s 2015 State of Property Management Report – Part 1

DGS 3: Buildium’s 2015 State of Property Management Report – Part 2

National Association of Residential Property Managers (NARPM)

The Iceberg Report

Google Ads

DoorGrowClub Facebook Group

DGS 76: Outsourcing Rules for Small, Medium and Large Companies with Todd Breen of VirtuallyinCredible 0

Transcript

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 are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

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

Today, I have a special guest. I am here hanging out with Chris Litster, the CEO of Buildium. Chris, welcome to the DoorGrow Show.

Chris: Hey, Jason. How are you? Thanks for being here. Thanks for having me. I’m just flabbergasted by that opening. The energy, I could already feel it. It’s going to be a great hour.

Jason: Yeah. I put quite a bit of thought into that little intro.

Chris: It’s great. It’s fantastic.

Jason: Yeah. We’re pretty passionate about this and we want to champion a cause here. Chris, I’m really excited to have you on. I love to get a little bit of background on you and how you got connected to Buildium. Give us a little history here.

Chris: Sure. I’ve been with Buildium now for just over a little bit of 2½ years. I have been in the SMB or the small- and medium-sized business market space for probably 15–20 years. I’ve been in tech for a lot longer than that. I was with IBM for a while, a couple of other tech companies, then I landed at Constant Contact in 2006. It was an email marketing firm for small businesses like MailChimp and a couple of other players in that space.

I was with Constant Contact for 10 years, started with them, they’re pretty small, and that when we grew them and scaled with a great team at Constant Contact. Ultimately, ended up selling them three years ago, selling Constant Contact. Took a year off to reacquaint myself with my wife and three boys. During that 10 years they have the short end of the stick as we’re building Constant Contact.

During that time off, I had the opportunity, through different acquaintances and such, to meet the former CEO and one of the founders of Buildium, Michael Monteiro, who I know that you had on this show. Michael, at that point, was interested in just talking with folks who had scaled companies before. Buildium was on the verge of that inflection point of really scaling and revenue growth was starting to really accelerate. Michael and the team at that time over the past 12 years or so, had grown Buildium to where it was. Now, because of our great product, great team, and great customers, we are ready to go to the next level.

We started talking and it took three times of meeting each other. Finally, it was either he or maybe it was I who had said, “Hey, wait a minute. Do you want me here and did you say, ‘Hey, would you want to join us?’” I wasn’t really ready to jump back into the space yet but there’s so many great things going on here at Buildium that I decided to. The fact that Buildium again was focused of small and medium business was something that really attracted me because this is where I get my passion from the small business folk. The fact that it was then focused on one vertical instead of hundreds, that being property management on the residential side, I jumped in.

I joined a couple of years ago as the Chief Customer Officer and for that, I was responsible for sales, marketing, partners, support, and success. I did that for the next year, year-and-a-half or so. Around that time, Michael and I started talking about Michael looking to transition out of the CEO role. He’s been the CEO since founding—that was 12 years or so—and we started talking. Last July, we went through the transition. I have now been the CEO since last July and I’m loving every minute of it.

Jason: Cool and what’s he up to now?

Chris: Michael and Dimitris, our other founder, are both advisers here at Buildium. Dimitris has a couple of things going on but he’s here a couple of days a week helping us out with some of the larger initiatives that we have going on. Michael’s here a couple of days a week advising me, the rest of the exec team. They’re both active board members for Buildium. It’s just great having them both here because it just adds to that continuity, builds on the history. I can turn to him and say, “Hey, this customer that’s been around for 10 years. How did we get them and what were the things that they were looking to do 10 years ago?” so that when I go and meet them, I know the history that they’ve had with Buildium and how we’ve helped them grow.

Jason: Great. The topic that we had discussed or that we had down is homes, not houses. Let’s get into that. What do you mean by homes, not houses?

Chris: Great question. I’m sure, as many people know, Buildium is in the residential space, as far as helping property managers with our platform to manage their properties, manage their leases, tenants, and units. Also on the accounting side. We have 16,000 customers, we’re managing on the platform about 1.8 million units, and through that, we have the ability to not only talk and speak with our customers in the residence, but also because of our partnership with NARPM and a few other things, we do a ton of research.

We have most certainly seen over the past couple of years, this trend where the idea of the importance of relationships between the property management firm and their residents has really taken on a new and different light where relationships have become so important. As part of that, the realization that regardless of if you rent or if you buy a home, everyone is looking for the same thing. Even when you are a renter, you are actually looking for a place that you can call home. The idea of referring to this as a rental property or a rental unit, in the minds of the resident, they’re really looking to understand and get that feeling of, “Hey, I’m going to call this home.”

Why are they doing that? Because frankly, there’s many trends that are going on, both at, let’s say, the millennial segment as well as in the upper segments of the baby boomers, where this idea of the American Dream where it used to represent home ownership no longer really stands for that. It’s the whole idea of that, ‘I just want to find a home.’ By calling it a home and not a house, what we’re trying to do is bring that idea of belonging and bring that idea of where can I put my roots down. Just for the fact that I didn’t sign a mortgage and I have a rental agreement, doesn’t mean that my aspirations are different somehow.

Because of that, property management firms should really take that idea really as far down the road as they can and understand that they have to be service-oriented. They have to be relationship-focused. This idea sometimes of looking at residents or your owners or your vendors in somewhat of an adversarial way, is no longer something that you can do if you really want to be a successful 21st century property management firm.

Jason: That makes a lot of sense. I think part of the challenge is that nowadays, millennials and the younger generation, a lot of them see home ownership as a burden. They see it as a tether in a lot of situations. We live in a day and age in which people can work from coffee shops, they can have freedom, they can travel, and jobs change. It’s no longer the day and age where people will stay in the same career sometimes for just 20 years. When things are changing, they want to be able to move.

I think also, one of the reasons I’ve always enjoyed renting was I didn’t have to do the maintenance stuff. I do want to have to deal with that. I either have to hire a house manager to manage the property for me or have a property manager that helps manage those things for me. I don’t want to have to deal with that. My time is far better spent on my business, with my family, those kind of things, and that’s not just a priority for me. I don’t have any sort of kick out of doing that stuff.

Chris: Exactly and that’s not only. So, 100% on the millennial side. The idea that even though they may only be a resident for a year or two years, again, they still want to have that strong feeling of being able to call this their home. The same thing, for different reasons, is on the baby boomer generation. Here we now have this generation who are quickly becoming empty nesters left, right, and center, and they now have really no more great use for the large house that they have in the suburbs. They have all this space, again to your point, they no longer want to have to clean in every week and they no longer want to maintain this beautiful house. So, what they’re doing is actually selling their houses.

We’re seeing a big trend of, for example, there’s a brand new neighborhood here in Boston that has just grown over the past decade or so called the Seaport. Many empty nesters are moving into the Seaport and renting. Actually, they’re renting it with some of the leases are almost renting at will, a three-month lease, a half year lease, for the same reasons that you talked about. They want to now travel. They want to have that flexibility that, should they want to pick up and explore another part of the country or another country altogether, they don’t want to be burdened, like you said, tethered down by the fact that they’re carrying this mortgage. That is changing on the top end as well.

The interesting thing that binds these two segments together, these two parts of our industry together, is they’re both asking for technology. They’re both asking for technology with their property management companies for automation of payments, understanding, “Hey, if I have burst pipe, I don’t want to have to call but rather perhaps tell Alexa that there’s a burst pipe or you log into the portal to put in there maintenance request.

Even though many people look at millennials and baby boomers as quite different—in many cases they are—there’s a huge intersection in the property management space that both of these segments share. The largest one that we’re seeing, there’s two. One, again is around technology and the other one is demanding a really strong relationship with their property management firm and actually moving away from even using the word ‘landlord’ because there’s just so much baggage in that word. But saying, “My property management company,” or, “My property manager,” it really works to strike in the relationship that they’re looking to have.

Jason: Let’s talk a little bit about the language then because I think that does matter. I think you’re right. The word ‘landlord’ is always been displayed or the archetype of the landlord is this sort of evil person that you have to pay rent to and that doesn’t take care of things. This is what you’ll see in shows. They’re often this great antagonist in virtually any show.

Because we’re talking about homes, not houses, what sort of language should a property manager be using? How should we be rephrasing this to make things a bit more tenant-friendly and shifting towards being more appealing towards residents?

Chris: That’s it. That last word you just used. We strain and really speak with our property management customers about the idea of resident versus tenant. There’s just a deeper meaning around resident as opposed to lacking emotion the word tenant. As the title of what we’re talking about here today, wherever you have that opportunity, use the word home as opposed to unit. Unit is so devoid of any emotion. Even if it’s a rental apartment or even if it’s a multifamily property, when you’re talking with the residents, talk it in a sense of their home.

And the idea of partnership. We talked about looking for a deeper relationship amongst all of the different constituents that our property management company works with. Instead of looking at it as us and them, you talk about the partnerships. The partnership that you have together with your vendors, the maintenance vendor or your service partners. The partnership that you have with your owner. So really, getting away from, again, that adversarial type of thing and being deliberate about using this language and taking the time to check yourself as a property management firm, to make sure that you’re using that language that holds your constituents or your partners in, as opposed to setting up that wall between you and your resident, you and your vendor, or you and your owner.

Jason: Got it. I’ve heard some property managers joke that calling your clients your owners has this psychological negative impact. If you call somebody your owner, they own you. You’re like a slave to them.

Chris: Yeah. You reminded me of another one. Definitely that idea of client versus owner, tenant versus resident, service partners instead of, “This is my landscaper or roofer.”

Jason: I like the idea of service partners instead of just vendors. The latter sounds pretty cold. All right, we’ve addressed several target audiences here that are connected to property management. Tenants instead of our residents, owners instead of our clients, vendors instead of service partners. Are there any other groups we’re missing here?

Chris: No. I think, yes, it’s language but if you look at the property management firm itself, there’s a mindset shift that needs to happen. It’s that idea of being service-oriented and being understanding that if you get that service-orientation, you’re going to have stronger relationships and you’re going to then hopefully have residents who stay in your properties longer, so then not having to deal with your turnover expense, the constant ins and outs, and just building those bonds.

Ultimately, again, building the language with that mind shift. We have customers that are just living into this idea. Not only are they growing, they start to get a reputation for this. We know in our space, word of mouth is so important that they’re seeing people coming to them and saying, “Hey, I’ve heard that you really are doing something different and you really are looking to help with the service perspective. And on top of that, you’re using some cool technology that helps build on the relationships.”

This idea of technology taking out the human factor is not what we’re talking about. Being a technology vendor, some people are somewhat surprised to hear that. We look at technology being the enabler, to help firms become more efficient so that they then have the time to be able to focus on building these relationships, making sure they’re service-oriented, and making sure frankly that they’re differentiating themselves from everybody else in the pack.

Jason: I think that’s a really important distinction. Going back to what you’re talking about, you’re talking about with residents, with clients, service partners, you’re talking about just in general being a more respectful company honoring other people, caring about other people. I really believe that property managers have a massive network. They have a massive ripple effect between all the owners, all the tenants, all the different people that they connect with, even potential residents, they are able to have quite a big influence. It can be a bunch of little micro interactions that are negative, and it can be lots of micro interactions that are positive. That little shift, even in language and little things. This is what gets me excited about our company, DoorGrow, and impact that we get to have through our clients. But I really believe that good property management can change the world.

Chris: I completely believe that. I’m with you 100%. That’s so great.

Jason: So, good property management can change the world. Bad property management [...] industry and it can have a massive ripple effect either way.

Chris: Well, think about this. To you’re point, driving and if you’re commuting somewhere, we know that property management firms love to have the banners, love to have the advertising, “This building is managed by so-and-so.” If they have a bad reputation, people that are two, three, or four degrees away from that actual company, there’s a good change that they know of that reputation. So, even though I’m not directly involved in XYZ property management firm, when I drive into Boston every morning, I know of folks, those that aren’t even our customers, I know the reputation that they have. I think that’s a good example of that ripple effect. They’re always out there. You can’t miss those banners. There’s just this constant on of this advertising for these property management firms, that if they don’t have that great reputation to back it up, like you said, it can impact them pretty directly.

Jason: I think it’s even bigger than that and I want everyone listening to realize this. A lot of property managers I talk to, they say, “Well, we started our company because there weren’t any good companies in our market,” or they tell me, “We’re the only good ones. All the other ones are terrible.” But everyone says that.

What’s interesting is I think some people have this mindset of scarcity that I think has been falsely created in this industry. In single family residential, according to Iceberg Group, we’ve got about 70% that are self-managing. There’s tons of blue ocean, tons of available potential market share, and yet everybody’s been fighting over the coldest, worst, most difficult leads.

I think the thing to realize is that there really isn’t scarcity right now in the US. There really is not and the thing that I really want listeners to pay attention to is that the companies that have bad reputations in your market are hurting your ability to grow your company because of that. The awareness level is low and the perception level is low. Those two things are impacting your ability to grow.

I think what the industry needs right now is collaboration over competition. Collaboration allows you to feel safe helping your competitors. A rising tide raises all ships is sort of true but it sinks some because the tide is low in the industry as a whole. Some of those ships are not seaworthy and they’ll sink. But I think if you can lift up the ones that are seaworthy, there’s going to be a lot more business to go around. The ones that are at the top promoting the industry are going to be the ones that win.

Anytime there’s a new business category in the US, the person that builds the category instead of their own individual brand is the winner. Google built the category of internet search. Now we google everything. Whether you’re on any other search engine, “I’m going to google it.” Kleenex built the category of disposable paper facial tissue. Everyone was using handkerchiefs before that. So now, Kleenex is synonymous with any tissue. “Give me Kleenex.”

Property management has been held back, I believe, and has a huge opportunity to grow. It’s been around for decades but the problem is the awareness level is on par with brand new industries. I don’t even know of any other new industries that exist in the US that are as young in reputation, perception, and that sort of infancy other than maybe marijuana, vaping and these kind of things. Property management can be as big, I think, as the real estate industry. It has that potential. We barely scratched the surface.

Chris: I completely agree. It’s funny that you used the all the boats rising because we talk about that all the time here at Buildium. We talk about the idea that this industry is ripe for so many things as far as growth and a little bit of disruption, as far as technology adoption, and it’s all for the idea of introducing the true human element into the industry. Further, this idea that everyone who really buys into that is then going to rise up because as you said, I think there’s enough pie for everybody.

It’s really interesting when we’re at either some of our meetups or we’re at NARPM, there is a real camaraderie around those folks. You can almost tell those folks that have really been successful around this idea of understanding, it’s the strength of relationships that count. Why? They’re not threatened by the other property management firms because they know that their relationships are solid, that their residents, their clients, their service partners are going to stay with them, because they know the reason that they’re going to stay with them. They don’t mind talking with other PMCs because they know that they’re solid in their business.

What really working here to try to bring that element, obviously in addition to the technology. But there is a change that needs to happen and frankly, it’s not just a, “Hey, we think you should change.” What we’re saying is, “We 100% believe, know, and have evidence that people who take this idea of service orientation, this idea of relationships matter, and using technology to get to those, we know it works.”

Again, 16,000 customers and we have so many of them that are successful, who have bought into that entire idea. What do they have? They have happy long-term residents, they have happy clients, and they have happy service partners that aren’t going to go anywhere else because they know they’re in it together. That’s what we’re looking to really continue to help and help the entire industry here, which is really exciting.

To your point, there’s an opportunity here that not too many industries have. We have seen research that says that the property management industry is the third highest industry in interaction with constituents, let’s say, because they have to deal with residents, they have to deal with their clients. That idea of total interaction and ongoing interaction with people, it’s the third highest. What are the other two? Hospitality and retail. That’s pretty good company that they’re in and hospitality and retail understand that relationships matter. Now, it’s time for the third person or the third set in this industry to realize that.

Jason: That’s really an interesting little factoid right there. Let’s go back to what you mentioned earlier. You’re talking about tech enables you to spend more time on relationships. I think there is this mythical creature that everybody’s chasing after that looks like this robot that will run their business for them. They can cut out relationships and they can have this business that runs itself. It could be super easy. I think when we chase that mythical creature, we end up chasing a pipe dream. It becomes really difficult and we alienate ourselves from our customer base.

I think that’s an important thing to point out what you’ve mentioned earlier. I love technology. I’m a total nerd, I love it, I love automation, I love geeking out on this stuff. But the whole goal of all of it, everyone needs to remember the core principle that it’s about your customer. It’s all about giving your customer more depth. I think instead of trying to hit more people, more superficially, more quickly, we need to figure out how to go more deep, more personal, and connect more with more people. If that becomes the focus, then we can leverage technology and automation to take care of the mundane, while we focus on the relationships and getting us personal and as deep as possible.

I’ve noticed that a general rule I give to my team, that if any is a sticky or difficult communication, or situation, or somebody’s not happy, we want to go as personal as possible. The most personal would be in person. Second most would be a video call like this. Third would be maybe a phone call. But it needs to be as personal as possible because it just calms the situation down, it makes things easier, and really that’s what people want. People want to be taken cared of. A business only exist if it’s serving somebody and if it’s solving their problems and their pains. That’s only the reason a business exist. You cut yourself off from the customer, you’re really killing your ability to have a business.

Chris: Right. Do you want to come and do our copywriting? You’re hitting on every single thing that are just so fundamental to what we believe here at Buildium. The idea of using technology for technology’s sake is a non-starter. The idea of using technology, as you talked about, to serve something and what we truly believe, after talking with our customers and understanding the industry, that using technology leads to the greater efficiency that offers you the ability to then spend your time where you can and where you should from an important business perspective.

There are two things. The efficiency brings your ability to spend time with, again, your various partners or clients and your residents. So really, get to know them, to really understand them, to really interact with them because now you don’t have to be chasing them for, let’s say, the rent payment because that’s automated. You don’t have to be chasing them for understanding their tasks, their needs from a maintenance perspective because that’s automated.

Rather, what you need to talk with them about is, “Hey, am I meeting your expectations to help you build this home, this idea of a home?” “Hey, am I meeting your expectations as my client?” “Hey, how can we think of growing this business together?” That’s the second part.

The second part is how do I look to grow my business? If your goal as a property management firm is to continue to expand, that takes a lot of time. That takes a lot of effort. You really need to understand what type of properties you’re really good at, what types of residents you really want to have, what type of clients you really want to get in business with. That’s not something you can just do haphazardly. You have to work at it. You have to plan at it.

If you’re not focused on, as you said, those things that can be repeated and processes that can be automated, that gives you the time to really think of you business strategically to continue to help grow. You are, in a directed fashion, going after and driving how you want to grow your business, so you’re growing your business and your business isn’t growing in spite of you or growing at you. You’re taking control of it and you’re working in a methodical way now to grow your business and become more efficient.

Jason: You mentioned something that stood out to me, talking about strategic timing. This is one of the first things we have clients do when they come aboard with us, is we have them do a time study to get really clear on how much strategic time they’re spending in the business and how much tactical time. Usually, their strategic and tactical ratio is almost 99% tactical. It’s like everything is completely tactical. You’re just doing work in the business. You’re handling emails. You’re doing phone calls. You’re dealing with your calendar. You’re just working. Business can’t grow if there isn’t strategic time. Strategic time is the time you spend to focus on growth. If that doesn’t exist, you won’t be growing.

I think another thing that’s important to point out is you talked about how customer service and relationships really matters. One thing to point out that I think a lot of property managers listening, I talked to hundreds of property management business owners that they want to do good customer service. They want to be the good company. I don’t think of of them wake up in the morning and say, “I want to be terrible to tenants, I want to be terrible to my owners, and fight terrible customer service.”

I think one of the big things holding them back is that the entire industry is addicted to the SEO lottery. The SEO lottery is a losing game for the majority but you get a few noisy winners that hit the jackpot. They tell everybody how they built their business and grew things, they get the top spot in Google, and everybody chases after this myth or this thing like they’re playing the slot machine in Vegas. It’s harmed the entire industry because if the company is spending their hard-earned revenue on SEO, pay-per-click, pay-per-lead, content marketing, social media marketing, and they’re not getting an ROI, then the first thing to go is customer service. They’re worst off than if they have just not spent the money in the first place because they didn’t get an ROI. So, then the first thing to go is that customer service. They’re not growing. There isn’t growth. There isn’t going to be customer service.

So, if anybody’s listening, shameless plug, talk to DoorGrow. We help people get out of that problem and then you can move. I find that when people solve that problem, the next thing they want to focus on is everything else. They want to focus on systems and processes, building a team, creating culture, focusing on the customer, and then they get in to making a difference. But when you’re starving, you’re not too focused on anybody else.

I think there’s a Chinese proverb that says, “Your own toothache is more important to you than a million people dying on the other side of the world,” or something like that.

Chris: I have not heard of that one. That’s pretty interesting.

Jason: I may have adapted it, but...

Chris: I agree with you. I agree, let’s say 99%, and the reason being is because we’re also, as part of the growth aspect of what we offer and what the industry likes is that we do have the whole property management side of our business. However, I’m going to caveat with that, there is a massive impact of relationship and reputation in that side of the business as well. Why? Because you have prospective clients going to that side and going that that marketplace, and ultimately being exposed to local property management firms because they’re interested in having a third party manage their properties for a myriad reasons as to why they no longer want to self-manage.

There is a reputation and relationship aspect that plays into that exposure as well, because again, it goes back to the banners on the side of the building ad that I’ve talked about. When you are exposed to potentially these three, four, whatever other property management firms, if you have a good reputation, I will contend that that owner probably has heard about you. If you have a bad reputation, they’ve probably have heard about you as well and they immediately are going to discount you. If you have a good reputation and they see that, “Okay, this property management firm has said, ‘Yes, I’m open to looking to get more greater properties under management,’” they’re going to turn to that, one that they have a little inkling as far as, “Oh, yeah. I’ve heard that this is a good firm.”

I agree with you about the vast majority of what we’ve just talked about. However, reputation and relationships even matter in that space, too. What goes of value, of all the channels, it’s not binary. It’s not the idea of, “Oh, I can just,” to your point, “focus on this execution aspect and not stuff over here,” because this stuff over here is also going to matter in whatever marketing channel or marketing activity you use.

Jason: Absolutely. If somebody shores up all the major league should exist in the sales pipeline all the way from awareness to closing a contract, then it makes sense absolutely to do different advertising methods, all probably management. But if you have a massive leak where you have this horrible reputation online, or your website doesn’t create trust or convert or answer their core questions, or your pricing is off in your market, or your branding is off like they think you’re a real estate company or something generic with properties or they’re confused, there’s a lot of potential pitfalls.

If you have all those pitfalls, you can turn the spigot on full-blast and it’s not going to work very well. If you have those things tight, you can squeeze blood from a stone and you can use allpropertymanagement.com, you can do SEO services and focus on that, maybe get more business. But you need to make sure that you end up foundation of it, like you said, is word of mouth and reputation. That’s going to trump everything.

It’s like a clamp on the pipeline. You could have everything else in alignment but if you have really bad reputation, they’re going to check you out. Even if your website’s amazing, even if your advertising and copywriting are on point, they’re going to go check you out because they want to feel safe. If you’re a one-star company, they’re going to feel a little bit nervous talking to you, and then you’re going to have to figure out how to spin it. Like, “Oh, the tenants just hate us but the owners love us or something like that.

Chris: This is something from a small business perspective that it’s not only property management but it’s everywhere. It’s that idea and I think what you’re saying is shoring up your business model before you pour a ton of gas on the top of what we call a funnel. I can’t tell you the number of not only property management firms but owners from all different types of SMBs.

When you start to talk with them and they want to do that top of funnel stuff, they want to do all of that because sometimes that’s more attractive. It leaves a more sexy type of activities about growing your business. Then when you go, “Okay. Well, are you going to be able to keep that? Are you going to be able to get a response to that lead within a matter of minutes? Are you going to be able to service that prospect all the way through? And then are you going to be able to keep that prospect if they become a customer for a long time because you’re all service?” That’s when you start to see the whole, “No, I can’t do that. No, I can’t follow-up. I really don’t understand that. I don’t really have good service levels.”

It’s very hard for folks to say, “Wow, that would be a waste of money, actually, to really expand my top of funnel work until I get,” like you just said, “everything shored up.” When that happens, you know it.

For us here, we talk about the ladder of autonomy. It’s kind of a 50s phrase but companies that are just existing or at the bottom of the ladder. Customers have this level of autonomy because they have all their you-know-what together, they understand their business, they understand their customers, they understand their message, they understand the differentiator, they’re working on a completely different level than other folks in their industry, notably on the property management side.

Our whole goal is to get everybody up to that top level on the ladder so everyone, again, we think will benefit from it, the ripples, the network effect that you talked about is going to be there. Who’s going to benefit as well? Residents, clients, and service partners.

Jason: Yeah and that’s why at DoorGrow we shifted our focus just to help optimize that whole funnel so it makes sense. Once you have that dialed in, everything is more effective. [...] is more effective, Google Ads is more effective, everything becomes more effective when you take care of those things. I usually use the analogy, it’s like trying to do bodybuilding and you’re not eating food and sleeping but you take some really great supplements. Supplements are not going to cut it, but supplements can really help you get to the next level, probably, if you take care of the foundational basics.

Dialing your brand, your pricing, your reputation, your website, your sales process, all these things that are in the funnel, these are the basics. These are [...] any business, like you said.

Chris: It’s [...], Jason. I love that that’s your philosophy. It’s so important. And also, everyone here at Buildium is going to be psyched that I said the word funnel a number of times because I talk about [...] company.

Jason: I love the idea of a funnel. It’s a great metaphor as well. Is there anything else we should discuss here on this idea of homes, not houses? If not, let’s let you plug something.

Chris: I think we covered it. Again, the idea of more and more over the years, we think it’s going to become almost a requirement. Those folks that are grabbing on to it today, competition is there, things are hotter than ever, and it is not nice to have anymore. Other industries have been disrupted through this very same idea and now, we see evidence, we talk with our customers, we talk with general folks that aren’t even our customers in the industry, and we really see this big wave coming.

Luckily, it’s also a cool time because the technology is there to enable the way to become more efficient through those processes that you talked about that are more on the just everyday ongoing type of things. Technology is there now to really allow this to happen. It is an exciting time. It’s an exciting time to be a vendor, it’s an exciting time to be a service provider in this space as you guys are, to see where it really goes. Just the whole property management industry is pretty hot right now and I just like to be a part of it. It’s really exciting.

Jason: Chris, it’s been great having you on the show. I feel like we had a lot of synergy. I really like you. You strike me as a visionary entrepreneur, a decade building up Constant Contact, all this kind of stuff. Not every company is lead by a visionary. I always feel safer with a company that is led by a visionary entrepreneur. That’s why I use T-Mobile, that’s why I have Apple products. I feel like there’s always been these visionaries at the helm of these companies.

One thing I want to point out, to plug Buildium or make them look maybe even better, is we’ve been talking all about being focused on the customer, being focused on your customer, serving your customer. We’ve been talking about that for property management companies, but I’m getting the sense that this is how you and your company view dealing with your own constituents, your own customers, that you want to serve their needs, make a difference for them, and not just squeeze dollar out of them.

Chris: 100%.

Jason: And to that point, some companies are focused primarily, first and foremost, as to serve investors. There’s a different focus there instead of serving their constituents. I think there’s been a lot of talk about this and a lot of pain by people in some other property management software and it’s really difficult to switch.

So, maybe you can touch on that difference a little bit with Buildium and maybe you can tell us how does somebody switch this? Somebody listening might be like, “Hey, maybe I like this guy Chris. I’d rather have him at the helm where I’m tethering my whole business to.”

Chris: Yeah. I hope there’s a lot of people that have that reaction. It is a core, foundational reality that we love here at Buildium. It’s something that Michael and Dimitris started years ago. It’s something that I 100% believe in. I think that’s why Michael and I hit it off so well so quickly. It’s actually the core essence of every single Buildium and there’s more than 200 of us now that believes in. We do not believe that we’re going to be a 100-year company who changes the face of property management if that’s not at our core and it is.

There’s a reason why we believe that customer success and customer support is not a function in a company but it’s everybody. There’s also a reason to believe that we’ll stay on the phone with customers for however long they need it. Again, property management on the accounting side is pretty involved. We’re not talking about accountants. We will stay on the phone and we will ride out the basic T account and say, “Here’s your debit, where’s the credit?” and we will walk them through that. Why? Because it leads to that relationship and then it leads to that idea that our customers are going to stay with us longer, they’re not going to think about jumping even if there’s a cheaper price or less expensive offering, and they’re going to tell their friends. Word of mouth in this space is so important as it is for our customers. It’s so important for us.

This is not corporate baloney that we’re talking about. It is something that we talk at every single company meeting, we talk about every single functional meeting. We have people listening to our phone calls all the time. We have people out in the field, employees are out in the field meeting with customers. You got to fly to California? Go fly to California. It’s going to pay off with the lifetime relationship that we end up with our customers.

How can people switch and if they are interested in getting to know me? cmlitster@buildium.com. Just email me. We have our standard customer success or support line. It’s on buildium.com. I have literally dozens, hundreds even, customers that I know personally, that the rest of my executive team, leadership team, and all of the Buildians. We know these customers. Just because we’re 16,000 strong doesn’t mean that you’re just a number. We will be here for anything that you need.

We just had customers up here the other day. We have a brand new office, which is great because we grew out of our other one and we spent the whole day with these customers just answering whatever questions in doing whatever we tend to do. It is a core element of what makes Buildium, Buildium and to your point, we 100% believe it. It sets us apart from the pack. It creates space between us and other folks. Frankly, we’re only going to build on it and we’re all going to make it better so that space is just going to get bigger and bigger.

Again, thank you for the visionary aspect. I think also, other folks are focused on just the technology, all product. We have a very good to great product that already throws a ton of value at our customers, that is only continuing to get better. We’re investing heavily in it but we’re also investing heavily in the relationship side. It is something that we have the ability to continue to grow and make even stronger. It’s not something that’s going to go away as we continue to expand.

I’ll also say, we have investors, too, and those investors couldn’t be more supportive of our vision, our mission, and the alignment we have around the idea that is the customer’s first always. It makes my job easier from a board perspective because they’re actually pushing me probably even more to make sure we don’t lose that, which is fantastic. I will always be. A hundred years from now, I won’t be here but I know the idea of customer’s first and always at Buildium will be.

Jason: Love it. Chris, really excited to connect, get to know you a little bit better, and hear a little more about Buildium.

Chris: Thank you so much.

Jason: And I appreciate you coming on the show. Where can people find Buildium?

Chris: buildium.com and they can find me at cmlitster@buildium.com.

Jason: Perfect. All right. Chris, thanks so much for coming out.

Chris: Jason, I want to have you come out to Boston and see our nice new offices and spend some time with us.

Jason: Yeah, you’ll have to have me come out. I’ll check it out.

Chris: Love it.

Jason: We’ll hang out.

Chris: Yeah. It will be great.

Jason: We’ll talk shop. All right. Cool, Chris. Thanks for coming on.

Chris: Thanks. I’ll talk to you.

Jason: All right, great. It’s great having Chris on. So, if you are a property management entrepreneur that wants to add doors, and you want to make a difference, and some of the things in the show hit a pain point for you, then make sure to reach out to DoorGrow. We would love to connect with you. We also have a really clear vision that we want to transform this industry and make a difference. It’s not just hype for us. That’s what gets me fired up and excited. The clients that are closest to me know that. That’s why I do what I do. It’s super rewarding and fun for me to hang out with other entrepreneurs. I really enjoyed doing this conversation with Chris.

Make sure to check us out at DoorGrow. If you are not in our Facebook group and you want to be a part of a community where the tide is raising all the ships, make sure you get into the DoorGrow Club. Go to doorgrowclub.com. It’s a Facebook group. It will redirect into Facebook. doorgrowclub.com and it is free but it’s only for property management entrepreneurs. If you’re an entrepreneur in this space, you’re a business owner, you have a company, or you’re looking to start one, make sure you join our group and start getting [...] in.

Thanks for tuning in. Until next time, to our mutual growth. Bye everyone.

Download this Episode

Apr 30, 2019

Managing people when you are not a people manager keeps most property management businesses within 0-200 doors. They can’t scale beyond that without hiring a significant number of people. How can you shift to outsourcing to scale, save money, and improve business operations?

Today, I am talking with Todd Breen of VirtuallyinCredible, which helps answer property management leasing calls every day through its experienced call center. Also, VirtuallyinCredible can hire virtual assistants (VAs) and customer service representatives (CSRs) with or without phone skills for you and your property management business.

You’ll Learn...

[03:15] Outsourcing: Follow rules to get it right, and select best solution to avoid failure.

[04:03] Outsource companies often find and hire virtual assistants (VAs) and other team members from foreign countries causing frustration instead of support .

[06:00] Small businesses need an entrepreneur, people manager, and task-oriented employees.

[07:43] People Manager Traits: They care for their staff and have strong coaching, communication, and development skills.

[08:50] Avoid pitfall of a property management entrepreneur who manages a team, but shouldn’t; they’re nice people, but they’re not making money or sales for the business.

[12:30] Grow your management company by adding more doors and a people manager.

[13:35] Entrepreneurs are sales-oriented, driven, and willing to do things others aren’t; they start controlling everyone and everything, so they need “inspired staff.”

[16:25] Systems can make or break businesses; is your business systemized; and has it established and documented processes, policies, and systems?

[20:14] HR should find, hire, and train employees; supervision is quality assurance.

[21:38] Three Outsource Options: Hire your own VA directly; hire a VA reseller/recruiter; or select turnkey solution to hire VA for you.

[27:54] Ask for and get good reviews by offering good service.

[38:30] Don’t underestimate or overestimate software; technology is another tool. besides outsourcing that creates leverage, and lowers operational and staffing costs.

Tweetables

Property management businesses can’t scale, stay stale without hiring lots of people.

Shift to outsourcing to scale, save money, and improve business operations.

Outsourcing: Get it right by following rules and avoid failure by selecting a solution

Lifeblood of Real Estate Business: Answer phone, get listing, rent/sell new listing

Resources

DGS 39: Property Management Outsourcing with Todd Breen

DGS 43: How Virtually Incredible Can Help a Property Management Business Grow with Todd Breen

DoorGrowClub Facebook Group

DGS 75: Bridging the Gap Between Inside and Outside Sales with Jennifer Stoops of Park Avenue Properties 0

The online Windows XP simulator runs in a web browser and its operation imitates the operating system. You can use it to prank someone.

Transcript

Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, and expand your rent roll, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, expand the market, and help the best property managers win. If you enjoy this episode, do me a favor, open up iTunes, find the DoorGrowShow, subscribe, and then give us a real review. Thank you for helping us with that vision. I’m your host, property management growth hacker Jason Hull, the founder of OpenPotion, GatherKudos, ThunderLocal, and of course, DoorGrow. Now, let’s get into the show.

Today’s guest, I have with me, the wise, experienced, property management guru, Todd Breen. Todd, welcome to the show.

Todd: Thanks, Jason. It’s awesome to be here.

Jason: Todd, you are talking to us live right now from Manila, right?

Todd: That’s correct. I spend a few months a year here working with our team and been enjoying my time here, and getting a lot of work done. It’s an honor to be on your show all the away from around the world.

Jason: It’s a tropical island though, right?

Todd: It is. It’s actually the cooler season right now, so it’s similar to where I live in Florida. It’s just a nice weather.

Jason: Maybe there’s a little bit of fun in it while you’re there too.

Todd: Yeah. I played golf today while you guys were sleeping.

Jason: Yes, nice. Cool. Todd, today, we are going to be talking about outsourcing roles for small, medium, and large companies—perhaps there’s some differences there—and connected to Virtually inCredible. Tell everybody, what is your thinking behind outsourcing in general. This is a topic that used to be taboo. It used to be a bad word. “Uh-oh, they’re outsourcing. You’re not using people in the US, you’re like some sort of evil entrepreneur.” I think the temperature shifted.

Todd: It has. I first started outsourcing eight years ago in 2010. Back in those days, I got a lot of raised eyebrows and funny looks. Now, when people hear that we’re outsourcing to the scale that we are, a lot of people are like, “Wow! That’s awesome! How can I save some money and improve my business operations in the process?” It’s really matured nicely.

The topic today is about how to get it right if you’re going to try and outsource, whether you’re a small, medium, or large business. I’m really excited to share what I’ve learned in eight years of helping small, medium, and large businesses outsource. I’ve seen what’s worked and what hasn’t. In this, I’m just going to lay it out for you and say, “Hey, if you’ve tried and failed in the past, I can probably pinpoint how that happened.” We’ll do it in a very simple grid that I’ve made for you guys. If you’re a first timer and you want to get it done right the first time, we’re going to explain the rules for you and have what it takes to do it right and to pick the right outsourcing solution.

Jason: Anyone that’s listening to this show knows we’ve had a few different companies that help with like either VAs or outsourcing or finding assistants for things, and I’ve revealed multiple times, I’ve had my fair share of failures. I’ve had team members in India, Bolivia, Philippines. Right now, the bulk of my team are in the US because I’ve had so many struggles dealing with a lot of that. But we’re now just now ourselves getting back into hiring and sourcing some talent in the Philippines to add greater support for my team and my staff.

Our team has helped your team with some branding work and designing new logos, so check out Virtually inCredible’s new shiny logo. I’m really liking it. We also helped out HireSmart VAs and have cleaned up their branding. It’s been awesome getting familiar with people that are making a difference in the space of property management. You’re also making a difference in the lives of people in the Philippines.

Todd: I grew up in the real estate business. My dad was a very busy real estate broker, very successful, and he was working days, nights, and weekends, and he was always answering the phone. Because he couldn’t afford not to answer the phone because the lifeblood of any real estate business is answer the phone, get a listing, answer the phone, rent or sell new listing. I have a real passion now with my four kids to give them a better quality of life as third generation property management company. They just look at me and say, “Dad, how did you do it before you could outsource your leasing lines or before you could have your own private virtual assistant that was full time helping you?” And I said, ‘Yeah, it was a lot of hard work and now, it’s a lot of smart work.”

Let me get into what the rules are so that the viewers will have an idea what it takes to get the right solution for you no matter what stage of business you’re in. Is it alright with you if I share my screen?

Jason: Yeah, you can share your screen. Just make sure you’re talking through it because some people would just be hearing this.

Todd: I’m sharing my screen, I’m going here, I’m hitting play, and tell me if you can see my slides.

Jason: Yup, I see them.

Todd: If you’re a small business, you’re all three of what a business needs. Because a business needs an entrepreneur that actually is the driving force behind the business, a people manager and task a score of people or employees that actually perform the tasks needed to get the job done in the business. Me, I’m an entrepreneur, always have been my whole life, and I struggled building my management company with one thing and that was managing my staff. I was pretty good at managing owners and tenants, but you don’t work everyday, all day, eight hours a day with your homeowner and your tenant. You get intermittent relationships with them. You have to actually build a relationship with your team. Whether it’s inhouse, whether it’s onshore, whether it’s offshore, if you can’t manage people, then my aha moment was, “I needed a people manager.”

On this screen, I'm listing the things that a people manager needs. They’re good at caring for their staff. Me, as an entrepreneur, that’s not in my DNA. I’m not going to trouble you with my troubles and I appreciate it if won’t trouble me with yours. Entrepreneurs are not the warm fuzzy people managers. People managers are good at coaching, communicating, development, they take an interest in the development of the staff. I’ve got a graphic on the screen, there’s things that a people manager does. Number one, they know me. Number two, they focus on me and help me to focus. Number three, they care about me as a person. When all three of those things happen, they inspire me to do my best. There’s a long list of things that people managers do, but that inspiration in getting into the minds and hearts of the team and building a team is what a people manager does.

Jason: Just to back that up, what I’ll say is, I see this a lot. That’s what I get to do all day long is—I’ve talked to hundreds of different property management entrepreneurs, especially when they get into that 2-400 door range—they end up in this pitfall where they now have a team and the trap because they’re trying to manage this team, and they have this to-do list that’s ever growing and endlessly long, and everything on their to-do list have been sitting there for more than two weeks. It’s probably there because they’re not the person that should be doing it. They’re in a situation which they are not natural managers. It’s just not who they are.

Todd: Right.

Jason: They end up in a difficult situation in which they’re not managing well, the team’s not performing well, and then they’re blaming the team.

Todd: They’re really in the wrong role. An entrepreneur is very rarely a people manager. If we meet an entrepreneur who’s an awesome people manager, you’re looking at the one in a thousand entrepreneurs, or one in a hundred. It’s rare to see somebody who’s a gifted entrepreneur, and a wonderful people manager.

Jason: Virtually, if they are really good people managers, they’re not so great at the entrepreneurship, the sales side of the business is struggling, they’re really nice to people, but they’re not making money.

Todd: On the screen, I’ve got a picture of my wife and I right now. My wife is the consummate, ultimate people manager. She’s tremendous in managing people. We have a team of well over 150 here in the Philippines. They all think of her as the mother goose or mother hen, but they love and respect her, and they all do for her above and beyond because they’re inspired by her. It’s awesome for me to see that because I don’t have that skill set and it’s wonderful, it defines our company.

Let me explain to you why that’s so important. If you are a small business, you’re the entrepreneur, and you hire your first staff member—maybe it’s a property manager, maybe it’s a secretary, or a receptionist, maybe it’s an inspector, or a work person/handyman—as soon as you start managing people and you’re not a people manager, that’s what keeps most property management businesses in the 0-200 doors. Because you can’t scale beyond 200 doors without hiring a significant number of people. Whether you hire them yourself, or you outsource them, it’s up to you, but you need people to blow past 200 doors.

The companies, they get from 150-200 doors and grow up to 500 doors, they have to develop a people manager and get reliable people that work for them. There’s ways that you can get a people manager. You can hire one directly. By the way, if you were 500 or more doors, the companies that are 800-1000, 2000 doors, let me tell you something, they have a people manager on staff.

Jason: Sometimes multiple.

Todd: That people manager is the reason why they’ve hit that level and it’s the missing ingredient. Everyone says how do I grow my management company. I say, We’ll, there’s two ways to grow your management company. One is add more doors but at some point, you’re going to need to add a people manager.” You can actually rent a people manager or you can hire one depending on how you outsource. That’s one of the keys to today’s lessons is, “Hey, if I’m 100 doors and all I really want to do is get to 200 because the cash flow just looks so amazing then I want to go to 300. How do I best do it?” There’s some real super rules that I’m going to walk you through on how to do that.

I’ve switched screens here now, for those who are listening. If you don’t have a people manager, you’ll have staff turnover, more than you want staff turnover. You’ll notice that it’s easier to get bad reviews than it is to get good reviews because you don’t have inspired staff on your team. You’re going to hit a slower growth process because normally what happens is, the entrepreneurs grows the business to the first 100, 200 doors and then, unless the entrepreneur replaces him or herself and stays working in BDM or business development and growth, then they’re going to slow down on their growth. They won’t know what to do to kickstart the growth because they’re so busy putting out fires because they’re not a people manager. Their lifestyle will suffer and they’ll say, “I’m not having any fun.”

Jason: You’re referring to inspired staff. I heard this phrase several years ago that’s always stuck with me that I believe it’s true, that I love sharing with people connected to this and it’s, “Whenever we fail to inspire, we always control. Whenever we fail to inspire, we always control.” What ends up happening is, as entrepreneurs, because we’re generally really driven, risk-oriented somewhat and we’re willing to do things that other people aren’t willing to do—and sometimes we’re more sales-oriented and driven—by default if we’re not able to get people to do things, we start just controlling.

The opposite is to make them inspired and they just do it. You’ll end up with these business owners that are trying to micromanage, push their team, control them, force goals on them, and they aren’t inspired to do any of it. These are the team members that are B players, that’s the only ones that will stick around in a situation like that, and they are the ones that are complaining about you, the boss, and they go home and live for the weekend. They’re just hoping to get a paycheck. That creates a company culture of hiders, they’re hiding.

Todd: They’re hiding even when they’re at work. They might hide behind their voicemail. What’s the solution? We pointed out that if you are a small business and you want to go to large, at some stage you’re going to need a people manager. You can actually hire a local people manager which might cost you $50,000 or $80,000—depending on where you are—or you can hire a virtual people manager for some of the tasks at your business. By doing that, you’re now a well-rounded business. You have the entrepreneur, you have the virtual and local employees, and you have a virtual people manager.

We’re going to ask you guys to rate your business. How do you rate for systems? If you’re listening to this right now, “Am I systemized, yes or no?” And if you answer is, “Yeah, I’ve got a system for everything.” If I hire somebody, I sit in my desk, and they can open a training manual, and they can open policies and procedures manual and all of the answers are there. If the answer is that you’ve got your policies, procedures, and systems setup, then you’re halfway there to being able to onboard people.

A lot of people, small business owners, and entrepreneurs, they do the trial by fire. They’ll hire somebody, sit him at the desk and say, “Figure it out,” and if the person survives, then they walk through the fire, and if not, they burn up, burn out, or they leave, or they get fired. And that’s all due to a lack of systems, policies, and procedures.

Now, what I’ve seen is that in the 0-150 doors, unless you have a franchise that they’re giving you every system that you could imagine, and even some that you don’t need, and then you tailor them to your local market, unless you’re one of those people who has bought or created your own systems, policies, and procedures, then from 0-150, you’re winging it. You’re figuring it out yourself and it’s all in your head. If you’re listening to this you’ll say, “Yeah, that’s me.” Then what’s going to happen whether you hire a local staff or a virtual staff and it’s all in your head?

Jason: For those listening, they can break it down even further because in a business there’s not just like one system. A lot of people think, I just need a process system for processes. Every business needs some sort of sales system in their business. They need a communication system as a team in order to communicate effectively. They need a planning system in their business—which a lot of businesses don’t really have—for setting goals and milestones and allowing people to know what outcomes that are being worked towards. They need an accounting system, and they need a process system, if I didn’t already say that, for documenting, capturing all the process. Whether it’s a manual or something like Process Tree. And they need a support system for managing all the customer requests and everything else. They might be a 10 on 1 of these and a 1 on another. It really takes all of these different systems. And then you need processes for all the documented.

Todd: What happens is in those 0-150, most entrepreneurs still haven’t even started with these systems. From the 150-500, they slowly come to realize that, “These systems are going to make me or break me.” By the way, we’ve outsourced for large businesses that are over 500 and they still have horrible systems, horrible policies, horrible procedures, and believe it or not, really interesting staff and that’s the nice way to put it.

Jason: That’s probably the norm which is sad. Occasionally, you’ll see the conversed side where you’ll see somebody that is super systems-oriented entrepreneur. They’re basically an operator trying to function as the CEO. They will focus so much on process, and operations, and systems and they have no revenue.

Todd: It went off work and they’re not growing. If you’re good at systems, give yourself a pat on the back with your policies and procedures.

The next we’re going to talk about is your HR. If you;re going to grow your business and scale it and have quality and lifestyle, you have to have HR that can find good people. Then you have to get those people trained, and training does not mean you sit up the desk and figure it out, it means, before we put people to work on their tasks, nobody goes to work with less than one week of training. That’s 40 hours of specific human training. It’s a live trainer, training somebody with what’s our business, what’s out vision, mission, values, and then how do you do the actual tasks that you’ve been hired to do.

Supervision is quality assurance and etc. If you have all of those things, probably, you’re closer to 500 and more doors. If you’re missing any of those things, you’re probably in that 0-400 doors. You can say, “I’m good at some, but man, I got major holes and others.” That really impacts how you should outsource. I’ve got a graph up on the screen. The graph talks about if I am rough on my systems or rough on my HR, in other words, if I didn’t rate myself high on that last five minutes of conversation, how should I outsource. The answer is, you have three choices: You can hire your own virtual assistant direct by going to the destination country, for instance, the Philippines, wherever, and you can run your ad and try and hire somebody. Not recommended for anybody of any size that’s rough on their systems or rough on their HR for obvious reasons.

Jason: Yeah. You’re setting them up for failure.

Todd: Yeah. I see people say, “I don’t need a reseller or a turn-key. I’ll just do it myself.” I’m like, “How are you doing with your systems and you HR with you onshore operations because that’s going to directly impact or give you an insight into how your offshore is going to be?” And then they look at me and say, “Yeah, not so good.” I’m like, “Well, running out of the country isn’t going to make it better.”

The first option is to hire your own virtual staff direct. The second is hire a VA reseller which is either a recruiter or somebody who will actually stick around after they recruit for you. And then the third option is, “Hey, I just want a turnkey solution that will take care of it for me. In other words, I want staff but I’m paying you to also provide me good systems and processes and good HR because I don’t have that yet. In fact, I don’t think I’m going to have it anytime soon because I’m busy in that 0-150 doors just getting volume and growing my business.”

If I can figure out a way to affordably get good systems and HR brought into me by outsourcing, that sounds like a dream job to me. This tells you that turnkey is your number one solution. If you can go to somebody that offers turnkey outsourcing and just give them some process or system or some of the workflow from your business, and then it’s called set it and forget it, and just manage the results, you’ll be thrilled.

If you hire a reseller, you may or may or be thrilled based on how well systemized those systems are for the work that you give. “Have you got a system, or policy, and procedure for the specific work that you’re giving?” And/or, “How good are you at managing onshore staff and how well do you think you could manage some offshore staff?”

Jason: Right.

Todd: Let me go to the next screen which is a hiring guide; if you have good systems already in place and you have a people manager. In my case my wife, in your case, if you have somebody who’s a good people manager, wow, what should I do? The answer is, the world is your oyster. You can do turnkey from 0-150 and that allows you to just focus on growing your business. And then when you start hiring locally, from 150-600 doors, it means that it’s one last thing to worry about. Now, 600 and more doors, you’d be looking at a big bill from a turnkey operator and you’d be saying, “Look, I can do this myself. I should take this over inhouse with either my own DA resellers,” where I pay a recruiter to hire me an offshore staff, or by going to the destination country yourself to hire which can all be done virtually or you can actually take some trips depending on how far away you go.

But good systems, good HR, and a people manager is important before you start hiring individual offshore staff that are going to report to you and work for you directly. Does that make sense?

Jason: Absolutely. I think people really need to realize that they need to figure out what’s the best fit and works for them. One of the biggest mistakes I see people really early on is their default thought is, “I need to go hire somebody like me right here in the US.” That’s the first employee. They’re like, “I need to go get another me and duplicate myself,” and they’re doing 20 different things; they’re wearing 20 different hats. They go to try to hire and they’re not ready for that. They can’t even bring on somebody, they really should with technology and just start with outsourcing solutions like Virtually inCredible because you’re bringing to the table a lot of the stuff they aren’t even aware of that they might need yet.

Todd: One of the things that I outsource at my management company, for those who are listening who aren’t aware, I had a property management company since 1985. I used to absolutely hate the answering my leasing calls because I knew if I didn’t answer them during the day then I had no return calls. I knew if I didn’t answer them in the evening or on the weekend then I wasn’t going to fill my vacancies and I’d have to return more messages. My phone was glued to my ear. I decided to outsource my leasing calls and so many other managers heard about and said, “Will you take my calls too?”

It’s such a systemized process with us that it’s not like you could just hire somebody if you’re 120 doors. You can’t hire somebody for what you pay us because you’re going to pay more for your outsourced people, and they’ll only answer 40 hours a week, and we’re answering 80 plus hours a week. There’s a stage which it makes sense to take it over yourself, but there’s a stage where you just say, “Get rid of this and let me focus on other stuff.”

When we talk about capacity in online reviews, this is the DoorGrow Show and Jason, I’m one of your customers for the review, what’s the software you have?

Jason: GatherKudos.

Todd: GatherKudos, thank you. I think we’ve had it for several years. We’ve had good reviews in my management company and that’s because we offer good service, and we ask for the reviews. Seasonal workload variations can actually impact your reviews. Let me explain to you why. I’m going to show you what the variations look like. This is what your work orders look like. This is from Super Tenders. Hundreds of thousands of doors went into this. In January until May, you don’t have near the work orders that you do in June, July, August, September and then it’s slower a little bit again in the fall. You’ve literally got double the work orders between April and July. April is half of what July is. How do you staff for that in your business?

Jason: Yeah. The question is, “Are you going to just double staff and then fire half your staff every season?”

Todd: What happens is, if you look at when you get your bad reviews from tenants who are tired of work orders taking forever to get done, you’re getting those reviews typically, not April, you get them in June, July, August, September. That’s when the majority of bad reviews come in. It’s no secret, if you’re not staffed for the increase in volume, you’re going to have a problem. At my management company, we use Property Meld to technology, really accelerates the communication process and then we use EZ Repair Hotline. Now I can outsource. I’m pretty good at it, but I hire somebody else to do my work order outsourcing because they’re pretty good at it. I haven’t chosen to do that in the Philippines yet and it’s got a US-based team.

What do they call about eating your own dog food or drinking your own Kool-Aid? I outsource to other people at my management company because it makes sense for me to do it and I’m under 300 doors. I’m not at that stage where it makes sense for me to take it over. The same goes for our leasing call volumes. This is data courtesy of Virtual inCredible. This is our call volumes across the entire United States on a monthly basis, and you can see, December’s the slowest month of the year. Thank goodness, right? Going into the holidays. November, December are great, but literally there’s double the volume between December and June. June is going to crush you and people say, “Man, I can’t answer my calls or my properties take longer to rent.” It’s because you’re not really staffed to handle it right.

This is called a heat map. For those of you who are listening, it’s a counter Monday through Sunday, and it shows the darker hours of the day are when we have higher call volumes and the lighter colors are lower call volumes. Throughout the course of the week, on an 80-hours of answering your calls, days, evening, and weekends, there’s a tremendous call volume variation between Monday all day. By the way, there is a reason why Mondays are Mondays. Your phone’s going to ring with your highest call volume on your leasing calls on Monday.

Jason: Compared from the weekend because we aren’t generally doing it over the weekend.

Todd: Or they didn’t get you on the weekend. It could that too. Wednesday is a calm day. How do you staff for that? When you’re at 120 doors. When it’s just all hands on deck at all times when you’re at that volume. It makes sense to just say, “Hey, take my calls. When I grow to a certain stage, I’ll take them back.” That’s where people are able to make a tremendous good decision for their business because if you’re under capacity, under staffed, you’re going to get bad reviews.

Jason: Yeah.

Todd: If you have sufficient capacity at all times throughout the season of workload variations, you can get good reviews if you ask for them. If you have too much capacity, too many staff, you’ll get good reviews but your profit will suffer. Managing that becomes a full time job when you go past 500 or 600 doors, you’ll start to do that yourself but under that, it just makes sense to outsource some of these stuff. It will save you a tremendous amount of time and money, it’ll make getting good reviews easier, it’ll make your staff happier to get rid of some of your high seasonal workload that varies a lot, and just outsource it until you’re big enough to take it back inhouse.

Jason: And if you’re built out to the point where you can handle the amount of seasonal growth and seasonal increase, then what happens during those lean times, you end up with team members that are sitting at unused capacity. Nobody likes being in a position, or a job in which they feel like they’re meaningless, or there’s lack of purpose except really bad team members that you wouldn’t want.

Todd: They’ll never tell you that they’re not busy.

Jason: Yes. They will never say, “Oh, I have so much extra time right now. I’m probably not relevant during these few months. I probably shouldn’t be here.” It makes a lot of sense.

Todd: If you’re a small company and growing, this is the last part, I don’t have slides for this, maybe I’ll stop sharing my screen.

Jason: I’ll point out, connected to that, it’s not a great investment to have a team member that’s sitting in the garage half the time not being used. Imagine you live in a big city, and you’re taking the subway all the time, and you have this expensive car that you’re maintaining constantly but you’re not using. Financially, it becomes incredibly costly to have a team that is under utilized especially if they’re US-based staff, they’re really expensive, and you’re not just able to use them. You’re [inaudible 00:34:56] the money whether you’re using them or not. They’re not making any money.

Todd: Can you imagine what it’s like being me? We’ve got hundreds of staff and our volume is following that curve. We figure out how to do it. There’s something I wanted to share. This is on a personal note from a guy who’s grown a management company through a few cycles. If you’re in that 150 or less, I want you to ask yourself, “Is it easy to get leads to grow my business?” If it is, great, if it’s not, check out DoorGrow, check out some great ways to get improve your leads.

Second is, “Am I too busy to grow my business being an operator instead of being an owner?” An owner knows how to grow a business and knows how to keep the capacity to grow the business open because that’s what it takes. You know, 60% or 70% of calls to a business are your leasing calls. When you’re sitting there answering somebody who says, “How much is that house with the red door?” You’re considering the brain damage that’s giving you. Meanwhile, your phone’s ringing on line two and it’s an owner who has a nice listing and you didn’t get to that call.

If you’re struggling to grow your business and you have leads, but you’re not growing your business, man, clear your plate, get rid of some of your work, and grow your business. You can always take it back. And then work on reducing your labor costs. If you’re in the stage in your business where, “Oh I don’t get enough leads or I don’t want to grow my business.” Well then fine tune your business, that’s great. But as long as you can grow and you want to grow, clear your plate and move forward on growth which is your highest dollar.

People are valuing management companies at between $2000 and $4000 per door. Each new listing that you can sign up is going to increase your net worth, your asset value of your company by $2000 or $3000. If you can get five new listings in a month, and that’s worth $3000 a listing, we’re talking $10,000-$15,000, that’s what you’re increasing your net worth. You grow up that rate in a year and you’re $150,000 and $200,000 in your net worth. It’s all because you’re focused on growth and clearing the decks to make it possible. That’s what it takes to grow your business.

Then as you bring in the new volume of work, decide carefully, “Should I insource or outsource? Do I have a people manager or don’t I? What’s the best way that’s going to keep the machine moving forward?” That’s what I tell people because if they fail that outsourcing, I usually say, “Well, who’s the people manager?” And when the entrepreneur says, “I am.” I’m like, “Oh, okay.”

Jason: It didn’t work for me. You just did it wrong.

Todd: Did you learn something, Jason? Relative to your world and your lives that you’ve been living with our outsourcing?

Jason: Absolutely. All of these makes so much sense. Over the last decade, I’ve had plenty of failures in outsourcing things or I’m trying to do things. I think if I were to add one thing to this is one thing that has really helped me is to not underestimate or overestimate technology. Because technology, like you mentioned, like Property Meld for example, technology is another tool besides outsourcing that creates leverage, and lowers operational costs, and lower staffing cost.

A lot of people will try to go cheap on software. I believe that when it comes to software, you want the best tools, the best softwares. I have spent a lot of money on software tools and I buy the best. I don’t buy the Swiss Army knife that can do everything crapily or terribly, but I buy the best in each category to make sure we have the best systems for process, or the best communications system in our business. That allows my team to get more done, and be more efficient, and more effective.

Whether you’re going to outsource directly or you’re going to outsource to companies, make sure that you have the best tools available software-wise because even if software costs you hundreds of dollars a month, people are always going to be more. If you can give them the tools that they need to do the job well, you’re collapsing your cost and making them far more efficient, and it always pays off.

Todd: Very true. Listen, if anyone has any questions about this, I’ll just briefly tell you how we can help you at our company. We do answer your leasing calls, we also have a tenant screening department. That scales too because you get your number of applications in the summer, is a heck a lot more than it is in the winter. We do that. Those are full termkey systems, where you’re actually putting a department into place and you don’t need a local department to do either of those tasks.

In addition to that, we also have a brand new service where we’ll hire an individual VA for you with or without phone skills. You can get an admin VA or you can get a CSR, a customer service rep that can answer calls for you, and they’re all screened by our company and trained in property management. I used to be a trainer for the Property Management Academy. We put all of our people through all of that training now before they show up at your job. You get screening and training though our VA. If you like some more information, just send an email to todd@virtuallyincredible.com. Be happy to help you out however I can.

Jason: Awesome. For those listening, when we put on our conference, DoorGrow Live, we gave Virtually inCredible an award because they have consistently been one of the best in class or the best in their category for what they do inside the DoorGrow Club and inside the feedback that we hear from clients. It’s not just my recommendation, it’s a recommendation of a lot of people, and you provide a really good experience for people. You are making a difference in the industry.

Todd: Yeah, thanks. We’re having a ball and appreciate all you’re doing to help people grow with creative ways that aren’t obvious. I’ve been through some of your education, it’s really high quality. Thank you for what you do.

Jason: Appreciate it. Todd, thanks so much for coming on the show, and appreciate you sharing all these insights. I think there’s some solid takeaways that people listening this show. I think some rising like start with technology, then start with outsourcing to a solution like Virtually inCredible, and then maybe once you start getting some things dialed in, you might want to start bringing the staff in-house eventually, but you may not. It’s going well. If it ain’t broke don’t fix it.

Todd: That’s right.

Jason: Todd, thanks again.

Todd: Alright, guys. Take care.

Jason: Alright, it’s great having Todd on the show. Again, to make sure to check out the previous episodes in which we talked specifically about leasing lines and the challenges with those with Todd. You can just search for Todd Breen and DoorGrowShow, one word.

If you are listening to this on iTunes, be sure to give us your feedback in iTunes, they helps us out, also makes us aware of how you feel about the show. We love getting your feedback on these different shows, and make sure you are inside our Facebook community where you can hang out with cool people like Todd and other really savvy entrepreneurs. You can get to that by going to doorgrowclub.com and this is a community unlike any other. It’s a special community of property management business owners that believe in this vision and message that collaboration is more significant and important than competition in what this industry needs right now.

If you love the idea of collaboration and helping level up the entire industry, we’re just going to help every property management business owner succeed and grow this business and industry and get more market share then that’s the place for you, that’s your home. Join us in the DoorGrow Club. Thanks everybody for tuning in. Until next time to our mutual growth. Bye, everyone.

You just listened to the DoorGrow show. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrow Club. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff: SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. 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 at 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’ve learned and start DoorGrow hacking your business and your life.

Download this Episode

Apr 23, 2019

How often do you get complaints from the inside sales team about the outside sales team, and vice versa? “I can’t…I didn’t know...” Every business experiences the challenge of what a salesperson says and actually happens. It’s a constant struggle to make sure the sales team correctly relays what’s going to be done and the team accurately fulfills what the salesperson sells. How can you bridge the gap between inside and outside sales teams?

Today, I am talking with Jennifer Stoops, senior vice president at Park Avenue Properties. She shares how external and internal sales teams can work together effectively. After all, they’re on the same team working toward the same goal. Work together, instead of separately!

You'll Learn...

[04:55] Definition and difference between inside and outside sales. [06:22] Three Cs: Collaboration, contribution, and communication.
[08:49] Find a good personality fit for property management.
[14:09] Red flags to watch out for during hiring process.
[16:50] Align goals to facilitate and mitigate hatred, animosity, and frustration.
[22:06] Involve property manager for transparency and transition with sales process.
[24:45] Metrics to Measure: New doors and retention.
[27:40] Client and Customer Retention: Change how you sell to them to build a long-term relationship.
[28:20] Park Avenue Properties plans to move to one system, but now uses Knack, an internally produced business development tool.
[31:00] Gamify sources of motivation (recognition or money); make a grueling job fun.
[35:30] Seek buy in and feedback from clients; what problem can you solve for them?

Tweetables

Three Cs: Collaboration, contribution, and communication.

Metrics to Measure: New doors and retention.

A property manager is conflict resolution all the time.

Involve property manager for transparency and transition with sales process.

Resources

Park Avenue Properties

Jennifer Stoops’ Email Address

Jennifer Stoops’ Phone Number: 704-334-2626

DoorGrowClub Facebook Group

DGS 74: Cultivating Relationships in Business with Patty Young of Pearson Smith Realty 0

Transcript

Jennifer: There is an integration of the property manager pretty early on because otherwise, business development has established this great relationship in the beginning, promised the world, and in comes the property manager who's like, “I'm sorry, your property has been on the market now for 30 days, but we're going to have to lower the rate.”

Jason: Welcome, DoorGrow Hackers, to The DoorGrowShow. If you are a property management entrepreneur that wants to add doors and expand your rent roll, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow Hacker.

At DoorGrow, we are on a mission to grow property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, expand the market, and help the best property managers win. If you enjoy this episode, do me a favor. Open up iTunes, find The DoorGrowShow, subscribe, and then give us a real review. Thank you for helping us with that vision. I'm your host, property management growth hacker Jason Hull, the founder of OpenPotion, GatherKudos, ThunderLocal and of course DoorGrow. Now, let's get into the show.

Today's episode, I am hanging out with a bubbly, fantastic, wonderful lady named Jennifer Stoops. Jennifer, welcome to the show.

Jennifer: Hi Jason. Thank you for having me. I appreciate the invite.

Jason: It’s great to have you here. I'm sure we're going to go off on some tangents here because that's just how you and I talk. We're going to be talking about bridging the gap between inside and outside sales. Jennifer is part of a company called Park Avenue Properties and those watching this instead of listening, can see this big sign behind her. Jennifer, tell everybody a bit about who Jennifer is and give us a little bit of back story on you.

Jennifer: Interestingly enough, when I moved to North Carolina in early 2007, I interviewed with John Bradford. I just got my real estate license here in North Carolina and interviewed with John in March of 2007. It is the only job I have had since I lived in North Carolina. I actually graduated with a four-year degree. I'm from Buffalo, New York. I graduated with a four-year degree and I went to work at a dental practice of all things. I had no idea that I even remotely wanted to get into the dental field but she was looking for a business manager.

My degree was in business and communications. I put myself through school so I couldn't go for my MBA right away. It was just too costly at the time. After working in this pediatric dental office for about six months, the dentist sat me down and she said, “Would you consider going back to school?” and I was like, “Well sure, for what?” and she said, “We'd like for you to be a hygienist with us,” and she said, “Your personality is better with the patients than doing your insurance stuff,” and I said, “Sure.”

I am a retired dental hygienist turned property manager, long story short. I’ve always had an interest in real estate but coming from Buffalo, New York, it was not a terribly lucrative field there. Nobody was moving to Buffalo, they're all moving out and I ended up doing the same. I started here as the first property manager. I've been here almost 12 years. I just worked my way up.

Jason: When you started there, how many doors did the company manage?

Jennifer: At that time, probably 30-ish. John and his aunt were working at the company at that time. She did the books. She was also licensed. John had actually gotten his real estate license on the side. He was a sales executive at IBM. The 30-ish properties we were managing were a combination of his and business colleagues. He came from IBM and ExxonMobil background. It was a combination of those folks and we've just grown from there.

Jason: Where are you guys at now? Give people a little bit of perspective.

Jennifer: We are currently at just about 1400 doors.

Jason: You guys are one of the rare ones that have broken that thousand door threshold. That’s a pretty large outfit that you guys have got going on. My understanding is, John basically lets you run this thing now.

Jennifer: Yes, that’s true. It’s probably been about four years actually since he’s been, as he said, at the wheel. It’s been about that long.

Jason: One of the challenges that you've seen over the years is this difference between outside and inside sales. Maybe you could explain to those listening that may not be clear on what your definition is of those two things, but what are those and what sort of challenge exist there?

Jennifer: In property management outside and inside sales, I think everybody at least has, —whether it's your property manager or otherwise—in our organization, if we’re going to about ours, our outside sales would be business development folks. Those that are calling on owners, potentially visiting the properties. Inside sales are our property managers really. That's the inside counterpart. Previously, before we had grown to where we are today, I would have been considered outside sales as a property manager and we had some support team that would help be sort of inside sales. But in our world today, it's our business development folks and then our property managers internally.

Jason: Got it. What is the challenge that you’ve noticed? This is a challenge I think every business has experienced, the difference between what the salesperson is saying and what ends up actually happening. This is a constant struggle in any business, making sure that the sales team is correctly relaying what is actually going to be done and the team actually fulfilling accurately on what the salesperson is selling.

Jennifer: Absolutely. I look at it like there's three Cs. There's collaboration, contribution, and communication. Of course, communication being the key to everything. Honestly, we've recognized you have to have all three of those to make it work right. We had even fallen into the trap and it really hasn't been that long that we've been in a mode where we’re weighing this in a little bit better.

Internal complaint is always the same. “I cannot get the rent rate that business development promised. I can't honor the contract the way business development wrote it. I didn't know they agreed to these terms and now it’s special circumstances. Now I have to try to go manage. I now have to relay to the owner that they have to do these things to make a property rent-ready.” That would frustrate the internal team. The external team was, go close the deal, get contracts signed, turn it over to the internal team, and move on. There was no further engagement between the two. There was not a lot of collaboration. There was not a lot of communication leading up to the execution of the contract, the terms, the rental rate.

We decided we had to change that. That has helped tremendously. We look at it like our complementary roles now. Business development outside has a counterpart inside which is really your property manager. When our business development team is signing on a new property, they are signing it to a property manager internally. You're talking to that homeowner for the first time, so you know if somebody is a little bit more just very, very business. You can probably turn them over to somebody internally that has very similar personalities with multiple property managers here.

You may have somebody that's a brand new investor and needs a little bit more hand-holding. You might want to put them in touch with one of the more deliberate, or hand-holding, or soft-spoken individuals internally. The big E person can read that, but you have to get to know your internal team and that doesn't necessarily mean being in the office. There's a lot of firms, including ours, a lot of firms today that have grown. You've got maybe one main office and business development people in various markets, but you have Zoom. We were doing that right now, so you can get to know somebody, learn about them, and really feel connected to them as a teammate utilizing things like technology and stuff like that as well.

Jason: What are things that you do as a company then to really make sure that the communication is there, that the collaboration is there, that contribution is focused on? I guess at the foundation, it would start with the right team members. What are some mechanisms that you put in place? How do you identify whether somebody's going to really be a good fit on the property management side, or on the outside sales, or the BDM side?

Jennifer: A lot of it has to do with personality. Really, you can ask folks, too. There’s a lot of folks that'll tell you upfront, “I have no business being a forefront in sales. I prefer to be in the background.” Salespeople are historically not ultra-organized. They tend to be very chatty, very social, and folks that are more on the organized side tend to not want to be in sales roles. They feel that it can be very disorganized and they don't enjoy that. We learned that with folks around here.

When we have team members, oftentimes too when you're trying to figure out their appropriate roles, you can determine good people when you interview them. We just said the other day, too, we should do this more at the interview process, but we do tend to do it afterwards. We've done some of the shortened versions like the personality profile testing, things like that. It just sort of get engaged. More often than not, people are usually asked about. They'll tell you upfront. But you're right, it is very important to have the right people on the right team.

Jason: Yeah. I use a lot of assessments because I'm a nerd when I'm hiring, because I don't want to just go off of my gut. I want something that I can look at that helps me make things real clear.

Jennifer: It’s probably much smarter to do it that way. A lot less harder.

Jason: I love the idea of just simply asking people. One of my favorite things to ask when interviewing candidates to work at DoorGrow is to simply ask them what they most love doing and what really drains them. A lot of people listening are probably thinking, “Well, nobody's going to be honest. They're just going to say whatever the job is,” so the way that I usually phrase this is I’ll just say I’ll be honest and disclose first like what makes me uncomfortable, what I'm not good at, what drains me, the stuff that makes me feel alive, and that I love doing. I’ll just transparently share that and then I’ll say all these things that I dislike, that's why all these different people on my team have a job. That’s why they're there, because I need them for those roles to support me.

Then I’ll ask them, “What drains you?” I usually preface it by just saying, “There's lots of different things that we do in this company,” which is always true. “There's so many different things you could be doing and I know that if I have you do the things you love most, that you are naturally going to do a great job at it, because that is just what you're inclined to do. I’ll never have to motivate you to do it. I won't have to follow-up to make sure you're doing it. You’re just going to do it because you love doing that. I want to make sure I get really clear on what you love because I want this job to be something you love. Tell me what you love and what drains you,” and I usually get a pretty honest answer. Most of the time, they're really honest. I'm surprised how honest they are once I preface all of that, at the things they'll tell me that drain them that they don't like. Sometimes it’s stuff that's in the job description. I go, “Okay, this is maybe not a good fit for that person.”

Jennifer: One of the things that I do, like you, you're trying to get honest answers, is I'll ask, “What do you like to do in your spare time?” That can tell you a lot about a person and it’s sort of an ending question to the interview because to your point, you're usually told what you want hear as it pertains to the job description and whatnot. And exactly, we don't want people to take a role that they will not enjoy at the end of the day.

It's hard to describe every single thing in any of our roles. In property management, my gosh, there's so many moving parts. But you learn very quickly when you ask somebody, “What do you enjoy doing in your spare time?” If somebody says, “I enjoy quiet time. I enjoy reading. I enjoy time by myself,” that's probably not going to be your salesperson.

Jason: Probably inside.

Jennifer: Right. Those that are like, “I belong to a charity organization. I'm on a kickball league. I volunteer at this and I sing in a choir,” whatever, that's probably more on your outside team.

Jason: Yeah, it makes sense. I like that. That’s clever, asking what they do in their spare time. I think also when you ask just about their daily life and what they do in their spare time, they also reveal some of their propensities towards either organization, or towards maybe things that are more driven activities, which might be more outside sales. They’re more driven towards activities. I think that's clever. What are some big red flags to somebody that’s just a really bad fit for outside sales or might not be good at communication, contribution, or collaboration?

Jennifer: For outside sales, it is the folks that are, “I prefer to work by myself. I prefer to work independently. I don't like to talk on the phone.” They get nervous with having to speak to customers. There are certain little things that’ll come out when you learn that because this is development. In any organization, there's a lot of not only talking to the customer but branding whatever company it is. Maybe you and I were both at the same conference. You're out there, I'm there branding Park Avenue as an attendee, but still representing the brand as you are for yours. When people are not necessarily wanting to be in a social situation or things like that, that's going to be a problem. Those are red flags.

Jason: What about red flags on the inside side? You're looking for a candidate for the inside that you want them to be a property manager, what are some things to say, “This person's not going to be able to handle this. They’re not going to last in this role,” because that can be a challenging role, dealing with all the maintenance stuff, dealing with upset tenants. It takes a fairly resilient person, I would imagine, to deal with that.

Jennifer: Yeah, it’s that conflict resolution. If people tell you, “I don't enjoy conflict. I struggle with conflict,” that's a big one because a property manager is conflict resolution all the time. You don't need for it to be, but you're a middle man between an owner and a tenant, so you have to. Or if they give you the, “I know the hours are 9-6, but if I left a little early on these days a week...,” or I've had folks say, “Is this job always in the office? Because I don't enjoy being in an office all day every day,” that's like, “Yeah, it kind of is.” That may be a candidate for outside sales, but you still have conflict resolution even in outside sales because that goes back to the collaboration that we've learned.

I think business development in outside sales didn't normally have to deal with that. Really, the conflict was coming from the disconnect between inside and outside. But business development folks or outside sales were kind of [...] and the conflict resolution and all the other problem-solving things were coming from the inside team. That was creating the disconnect between the two teams. We're all on the same side, so we had to figure out how to go fix that.

Jason: Yeah. Then in tech companies, where you had the sales team and what they would sell, and then you'd have the fulfillment side would hate the sales team. There is this animosity that was tangible inside the companies I would see, in which the billing department, or the fulfillment department, or whatever, were like, “The sales guys are always selling stuff. They said it wrong. They’re not doing it right,” and there's this frustration. How do you facilitate this bridge between the two to mitigate that? Let’s say you got the right people in place. How do you ensure that there's a really good understanding on both sides of what their capabilities are and what's accurate?

Jennifer: We actually started to align the goals. Business development roles have a tendency to operate on bonus structure. Obviously, it's sales. Its target, its bonuses, its goals. We’ve recognized that even though the folks internal are generally W2-based salary employees. There is a way to align that to where they win together, they lose together, a shoulder-to-shoulder approach. What we had done was we created transparency. We aligned the goals. The goal for the entire organization is new business and retaining business.

Previously, we would run into issues where business development would close the deal, turn it over, move on. Now, the way that we have it structured, they get a portion of their bonus structure at the execution of the agreement, but the balance of it doesn't happen until the property is rented for the first time. It forces the two to stay engaged. We've created a clear path of collaboration between the two as far as, business development will make the call, they may negotiate some of the terms, but the contract which wasn't done this way previously, will actually be sent out now by the property manager.

Not that we're trying to put more work on the property manager’s [...], document signed doesn't take that long, but it forces the two of them to talk about the terms that were agreed to with the homeowner. Prior to the contract given going out, the collaboration on the rental rate happens. An inspection of the property happens, so the two of them are looking at the inspection to come to terms with what the owner may need to do to the property to make it rent-ready.

Previously, all of those things were done by BD in advance. Once everything was executed and a rent rate was given, the BD person was not normally telling an owner what needs to be done to prep the property. Now all a sudden, the property manager is in the picture. They receive a new contract, now they're looking at the terms going, “This is not something I normally do, so now I have to go to [...] for this owner,” or whatever the special circumstances are that they now have to go figure out how to manage. “Gosh, I don't think we can get this rent rate.” So we made it to where they win together, they lose together. They're all watching the same metrics now as it pertains to that. They both have a collaboration and a bonus structure tied to it.

Jason: Yeah, because one of the big challenge is if you get a closer on your team, they can close deals, and you put them in a position that it's simply about getting a deal on and not the longevity of that relationship with the client or the customer, they're going to delegate the deals. They’ll still close one and they'll move on to the next one. Those might not be a good fit for the business. They might not be a good fit for the team. They're less inclined to make sure that what the message that they're sharing is accurate. They're far less inclined to make sure that they have really good communication with the fulfillment side of the business, to know what can be done and that sort of thing, because their financial reward isn't connected to that. I love that and I love basically what you're saying. It sounds like you’ve created a much more gradual transition from one department to another. A lot of people view it as you're sales, and then there's this clear cut-off, and then boom, you're with other people.

Jennifer: Owners don’t like that either. That's right and the client didn't like that. Yes, it is a more gradual approach now where there's an integration of the property manager pretty early on because otherwise, business development has established this great relationship in the beginning, promised the world, and in comes the property manager who's like, “I'm sorry, your property has been on the market now for 30 days, but we're going to have to lower the rate,” and that then sets the tone. Now, business development’s getting a phone call from said owner to go, “Wait a minute, you told me I could get this and now this person that is managing my property is telling me we can't get that,” and it makes everybody go backwards. It's a much slower process for turning it over so that the homeowner doesn't feel like it’s either a bait and switch, or that they're just left at the altar when business development moves on.

Jason: I imagine other property managers that are listening or property management business owners listening to this, they could probably start to implement some of this even in their companies that are smaller, simply by getting the property manager involved earlier on with the person that's doing the sales. A lot of times, that's the business owner. But if they have managers, it might be wise for them to start transitioning as soon as possible to somebody else.

I think what that also does is it frees up the BDM. There's a lot of work that the property manager can help facilitate in building that relationship and in onboarding the client. I think that helps the sales process. It helps transition them into just being a client and going into that delivery or fulfillment stage of business, which is going to free up time for the BDM to spend more time selling, I would imagine.

Jennifer: Yes and we’ve created transparency, too. We’ve used technology besides doing consistent touch points. Right now, I had gotten back engaged in doing a lot of the BD. I'm generally here with most of the team. We meet regularly to talk about the CRM because everybody can see our customer care team takes telephone calls, puts the lead into the CRM, everybody gets alerted. They know on the rotation which property manager it's going to get assigned to.

The property manager knows there's something coming down the pipeline. They can see whether it's me or anybody else doing the business development side of it, where they are in the transaction, has contact been made, where are we in the process. Once it gets to a certain point where the owner is ready for a contract, we will go ahead and then collaborate. “Let's look at the rental comps together. What else do you have available in the neighborhood currently that we're managing? Are we competing against something else?” So there's a collaboration.

We also have transparency not only in the CRM and to know where we are with the leads, but we got to make it fun. This is a very thankless job, it's a very hard job, there's a lot of moving parts that everybody has to deal with every day. We have actually used technology that talks to our CRM which is an internal one that we have and then our property management software. It’s a tool called Klipfolio. It’s awesome because it makes graphs and things like that. If we say, “The target for Team Liberty is 10 new doors this month,” then every time something new comes in, they close it out in the CRM, and they mark it a closed deal, their graph changes. Both internal and external can see where they are in their target to go get as it pertains to new doors and retention. Those are two metrics that internal and external teams are both responsible for. It’s helping with retention. Everybody in the organization needs to help with retention and new growth. Those two metrics in particular are a collaboration between the two teams.

Jason: Absolutely. It’s really important in business to focus on the entire life cycle and the lifetime value in extending that, rather than just on sales and closing deals. What ends up happening on companies that just focus on closing a deal on sales is that fulfillment on all of those companies tends to take a backseat, tends to start to suffer and struggle because their focus is just on getting revenue in. If the goal needs to be on revenue as a whole in aggregate, lifetime value, building up the longevity of these contracts, keeping clients on, the number one prospect that most businesses have is their existing customer.

Jennifer: That's exactly right.

Jason: We’re always stoked on getting new ones which is exciting, but we want to make sure that we keep one. There's no point in getting on a new deal if you lose one.

Jennifer: Right. I think every property management firm across the country for the most part, several that I've talked to over the last few months, I know for us last year was our biggest one but for the last couple years, have experienced attrition due to sales. The sales market has come back. To your point, the internal customers that you already have, if somebody says, “Hey, when my tenant move out, I'd like to go ahead and sell the property,” why not try to retain that business and now send something out to all of your homeowner's letting them know, “Hey, we've got a property that another one of our clients is looking to sell. Is anybody interested in buying it?” I'm sort of talking about it at a 30,000 feet view.

That's something that we went ahead and implemented where we’re periodically sending a letter out to all of our owners. It’s an email format but it's not just an email. It looks like it’s a little letter that goes out and just letting them know, “Hey, if you want to buy more, the market is good for that. If you're interested in selling, let us know because we have others that are interested in buying.” That's still a door safe. It’s another sale all over again. That’s something that's also very important. That’s why retention is something that had to not only be tracked internally.

Business development was a little bit surprised when we were saying, “Look, you have to help with retention too,” but you do because internally, they may need some help in trying to convince person X as to why this particular property is good. The messaging has to be the same too about the firm. What is it we are selling? What is our firm [...]? What sets us apart? We need to have an aligned message on that.

Jason: Yeah. The way in which I found that for my own business and for the clients that I coach in sales, one of the number one things that impacts with client and customer retention is just how they're sold in the beginning. It changes how you sell if you're selling for the long term. It changes how you build and create that relationship and if that relationship is built well in the beginning, the lifetime value and the chances that they're going to stay with you longer is far more likely than if you just get the win and close the deal, and move on. That changes how that happens.

I've a couple of questions. One, what CRM do you guys use? Do you have a sales CRM? And then you have your customer portal and back office that you're keeping track of. Are those separate or are you trying to do everything in one system?

Jennifer: No. We're probably going to move to one system. Today, have we actually use something that we actually created internally, it’s a software called KNACK. We developed that to be our business development tool but also attracts a bunch of our other metrics and things. We have multiple tabs in it. We actually changed the name to it. We call it Grand Central Station in our office here.

It tracks our retention. It tracks all of the metrics that our property management teams and our business development team, those that they have to watch together. Then of course internally with respect to maintenance and work orders. Even internally, they're still doing sales. It’s a different kind of sales. Retention is sales. Keeping a homeowner happy is still sales. Tenant retention is sales. It’s just a different kind than the initial close of a deal. Even internally, the system is tracking lease renewals, it’s tracking tenant retention, it’s tracking how quickly we’re doing maintenance work orders because there is a direct correlation to how quickly even normal regular maintenance gets handled and tenants staying longer in the property.

Maintenance is the number one reason tenants leave. We have a system that we developed internally. Zoho actually is another tool that we use but it works more with our emails right now. Interestingly enough, they have a ton of tools that can be used. I think we may be moving in that direction . But today, we use KNACK and then we use this Klipfolio. Klipfolio is what actually creates the fun stuff. It creates the pie charts and the graphs, so everybody can see.

Jason: It’s more of a dashboard.

Jennifer: Yeah. That’s exactly what it is. It’s our dashboard. It shows everybody where we’re at.

Jason: You've got your own system for keeping track of some of your metrics and tracking data. You've got this thing that will take the data and print it in pretty charts so the team can see a scoreboard so they know whether they're winning or losing. Then you also have your back office, I would imagine, for accounting, keeping track of properties, and all of that that you do. I want people to be clear that you weren't just doing all of this in one magical unicorn system.

Jennifer: No. It takes a lot to put it all together.

Jason: The other thing I wanted to point out is, you talked about kind of gamifying this for your team. I think it's important for people listening to recognize that these two personality types that we’re really describing here that both need each other and help each other, that can work together, have very different motivators. I think as entrepreneurs, one of the big mistakes that we make a lot of times—I was talking with clients this morning about this—we’re very money driven. We’re very money-motivated. That’s a reward that we'd like to get.

We mistakenly assume that everybody on our team are money-motivated, or economically- or financially-driven. It usually is not the case. Most people are the opposite but outside sales people, BDMs, they are usually the good ones, are money-motivated. They’re economically-driven. Financial rewards and bonuses could work for them but then you have this other side and they're not. I find that when people are not economically- or financially-motivated, they are recognition-motivated.

They want to be recognized. They want to be seen winning. They want to feel like they've contributed. They want to feel like a winner. That’s a very different sort of situation. I think it's important as business owners to understand that if you're going to gamify this, to not just make it monetary rewards. I see it all the time. Somebody’s like, “We can start a reputation game in our company and we'll just give everybody a financial bonus,” and then they're like, “Why aren't our maintenance coordinators getting so excited about getting more money?” But they do get excited about getting recognized, doing a good job, and being called out in front of everybody as being awesome. I think it's important to recognize that you don't always have to throw money at people to get them to do things. Sometimes, that doesn’t work.

Jennifer: It’s interesting, too. We do have some monetary bonus both for external and internal. Definitely, the sales folks, generally speaking, that is exactly what they're looking for. Internally, we have a few different ways that we do it. Just this year, we started our hall of fame. It’s our wall of stars. Each month, somebody is selected. For example in February, the person that stood out from the crowd in January was selected. Their picture goes up on the wall. It stays there. We have January through December up on the wall. Once their picture gets put up there, the picture stays up there. That's something that we implemented this year and that's exciting for them.

We do PTO time. It's amazing recognizing somebody and it doesn’t cost your organization anything to say, “You have a half a day. You've earned four hours PTO time as a bonus,” or, “If you meet these metrics, for each metric that you meet, it’s one hour of PTO time.” It's unbelievable how far that goes.

Little things, when we've had business development come into the office for those that can physically come in, we do what we call training trivia. We might be training on what our lease agreement says, or mention an agreement, or what our pitch is supposed to be like to our owners. What is our message about our firm.

I'm telling you, I go to the dollar store and buy these boxes of candy. As people are getting it right, they're taking from this big bag. You can get $20-$30 worth of candy. That’s like 30 boxes of candy and they're so excited. It’s little stuff like that. Even from a training perspective, we try to make it fun because it can be a very grueling job. It’s mentally taxing. You're a middle man between the tenant and the owner and their money. That's not a really great place to be on any given day. You go home and a tenant or an owner is not mad at you, that's a great day.

Jason: Yeah. Sometimes it's hurting cats, it's organized chaos, and lots of conflict resolution. Jennifer, this has been really fun, chatting about all of this. I think there's lots of ideas that’s been thrown around that are helpful. Any last thoughts on making this work between your inside team and your outside sales department? Especially for the property management businesses that are not at 1400 units, they're smaller, they're just getting started, and they've got a really small team, what do you think are some of the first things they should just start to try to tackle to make this work well?

Jennifer: I would ask people specifically, “What do you think we should be saying to new clients?” Really, it’s all about communication. Just ask. Even your internal folks, while they may not volunteer the information because in their mind, they're one that’s in sales, but if you ask them, any of your staff, they will tell you. They all hear the stuff. That goes from your maintenance coordinator, to the folks that are answering your phone, to the owner of the company, whoever's doing business development. Just ask, they'll give you feedback.

What we do is problem-solving. Property management is problem-solving. What problem do homeowners have or what are the concerns that they could have? Why are they hiring a property manager? All of the people on your team in some capacity are going to tell you what the most common things are that they hear are an issue from a tenant or from another homeowner, and that's what you need to go to tackle as a team. That’s what you need to make sure you know how to go solve together, but they'll tell you. It truly is just about asking them.

That's something buy-in is huge. The buy-in on the message, the buy-in on how the process should look, the collaboration on there. Even we didn't learn that right away either. We would say, “Okay, I think it should work this way,” and, “Well, you've only been here two months, so you probably don't have an opinion on it yet,” but you know what? They do. It's good to ask for those ideas and feedback on that. They won't give it to you unless you ask for it.

Jason: Yeah, that’s true. Especially on the inside type of personality types. I find a lot of times, they see a lot. They’re almost like the guides for humanity. They're so aware and they see so many things that we miss. Us highly driven, money-motivated people, and entrepreneurs that are crazy, and wild, and taking risks. They see so much.

I meet regularly with my fulfillment team just to ask them, “What challenges are you dealing with? what are you noticing that is coming up as an issue?” A lot of times, we can solve it just by changing how we sell and making sure that we qualify prospects better, that we change what type of clients we’re bringing on because I want them to have a good experience, too. What that does is when you align sales with your fulfillment side, your fulfillment side starts to feel like you care about them.

Jennifer: It’s important what they have to say.

Jason: Some of our biggest mistakes were when I wasn’t listening to the fulfillment side, or wasn't listening to that team, and getting their feedback. They were frustrated because then they feel like they're not supported, “Why are you throwing these stuff at me and these people?”

Jennifer: Exactly. We have to go manage the problems that you guys went and promised but nobody's asking us what we have to deal with on the backend.

Jason: Yeah, absolutely. Our business is our best product.

Jennifer: Yes.

Jason: And when we look at our business as a product, we can see that there's flaws in every one of our businesses. There's always flaws in our product and we can approach it as a product and figure out how do we improve this? How do we make this better? How do we systemize this better? How do we reduce churn? How do we improve the communication? I love the idea of just asking what should we be saying or asking the fulfillment side of the team, like what things are coming up? And what are the big questions that we're having?

Jennifer: It's almost always the simplest things that are overlooked.

Jason: Yeah. Sometimes it's the simplest things that give you the biggest bang for your buck or the biggest increase in revenue. Sometimes it's really simple pivots that need to be made. Sometimes these really simple changes that they can see help improve the business. That's why even with tools and systems that we use like GatherKudos and stuff like that, getting feedback coming in from the business, or feedback from any channel, I think a lot of times people perceive feedback as something negative, but I see feedback as this gateway to everything that you really want.

Jennifer: Absolutely. Even the stuff that comes in that's good, you could still be looking at to do better. A feedback is critical because how do you fix what you don't know? If you're not asking for it, you're not going to get it. All of a sudden, you've got somebody that wants to terminate with you or an employee that doesn't want to be here anymore but nobody ever asked for feedback. Now all of a sudden it's laying in your lap and you're like, “Gosh, I could have fixed that had I known,” but now it's too late.

Jason: The scariest place to be as an entrepreneur is to be completely blindsided with something you didn't see because you are the emperor with no clothes.

Jennifer: That's a great point.

Jason: Nobody should be building a team around them that everybody feels like they have to say yes to.

Jennifer: That's right.

Jason: You are the emperor with no clothes.

Jennifer: That’s right. You want the ideas. You want the feedback for sure. Like it or not, you want it.

Jason: Great. Jennifer, this has been super fun. I really enjoyed having you on the show. It’s always fun to chat with you. How can people connect with you if they're interested connecting with you or how should people get in touch with you if they want to be able to do that?

Jennifer: My email address is just jennifer@parkaveproperties.com or you can just go to Park Avenue’s website parkaveproperties.com and all my info’s on there. My cell number’s on there, my email, and I'm not afraid to get my cell number out so people are welcome to reach out to me. You can go to NARPM. I'm on there, too.

Jason: Awesome. Jennifer, thank you so much for coming on the show.

Jennifer: Thank you so much for having me. I enjoyed it. Thanks Jason.

Jason: You bet.

That was super fun, hanging out with Jennifer. For those of you listening, if you enjoy this episode, we’d really appreciate it if you are listening on iTunes, to make sure and subscribe to iTunes podcast and make sure that you leave us some feedback. We really appreciate your real feedback on iTunes. It helps us get awareness and makes it worth it doing these shows. Be sure to join our free community, the DoorGrowClub Facebook group. You can get to that by going to doorgrowclub.com.

If it's been a little while since you've gotten some leads on your website, or you feel like your website maybe is pretty but isn't really doing its job, or maybe it's actually just ugly and not doing its job, make sure to go test it out by going to doorgrow.com/quiz. Take our DoorGrow score quiz and test your website. It’s going to show you how effective your website really is at converting and making money. It’ll give you a letter grade. There’s a few resources for you.

If you're struggling to grow your property management business, you feel like things aren't working like SEO, pay-per-click, content marketing, social media marketing, you're finding all of those cold lead marketing channels less effective, and your number one source of growth still is word-of-mouth, we can make that better. Reach out to DoorGrow and you can check us out at doorgrow.com.

Thanks everybody for tuning in. until next time, to our mutual growth. Bye everyone.

You just listened to the DoorGrow show. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrow Club. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social direct, and they still struggle to grow. At DoorGrow, we solve the 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 at 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’ve learned and start DoorGrow hacking your business and your life.

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Apr 16, 2019

Do you overcomplicate things? Try to automate and systemize everything? Focus too much on drip emails, SEO, or pay-per-click (PPC)? Then, you’re missing the most important element in property management: Taking care of people and property. People don’t buy property management. They buy into a relationship with a property manager.

Today, I am talking with Patty Young of Pearson Smith Realty. She describes how technology has its benefits, but building relationships and being there when someone needs you is the key to success and growth in the property management business.

You'll Learn...

[03:40] Grow a property management business by talking to people and being available on the phone; avoid complicated conversations by being confident and authentic.
[05:38] Pain and pleasures of solving their problems; property managers close deals by asking more than talking.
[09:07] Understand and categorize personality types; don’t stereotype, but figure out where they are to know how to make them feel better.
[11:05] Why are you reaching out to get property management now? Determine what’s driving their decision making to reach out for help.
[13:18] Create opportunities to start relationships by giving away a value and your free time to help people; find events to attend and places to volunteer.
[15:52] Actively create business by being dedicated and disciplined; schedule time every day for prospecting.
[17:53] Growing too fast isn’t always good; only take on what you can effectively manage and avoid sales lumps by creating consistency.
[21:53] Ratio between level of connection and intimacy in sales situation and close rate is not about how many people show up, but how well you connect with them.
[23:10] “Why don’t you like me? What made you decide to go with them and not me?”; ask for feedback to make your business better and leave the door open for the future.
[32:33] Showcase your expertise and stay on top of what’s happening in the industry; don’t listen to people telling you things that aren’t from a real source.
[39:08] Shift yourself with any prospect or referral partner into being an advice-giver; you’re in a position of authority and trust, which is what creates sales.
[44:34] Be aware of applications that come in where person froze their account due to bad credit history and to bypass your system.

Tweetables

Solicit and close deals by asking more than talking.

Be yourself, be a person, and listen.

You can’t sit back and relax. There’s no relax. You’ve got to keep it going.

Needy in sales is creepy.

Resources

Patty Young’s Email Address

Patty Young on Facebook

Crowdcast

NARPM

DoorGrowClub Facebook Group

DGS 73: Mold Remediation and Air Quality with James Armendariz of TruEnviro 0

Transcript

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

Many in real estate think you’re crazy for doing it. You think they’re crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win.

I’m your host, Property Management Growth Expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. I have a special guest. We’re hanging out with Patty Young. Patty, welcome to the DoorGrow Show.

Patty: Thank you. I’m happy to be here.

Jason: Patty, you are with a company called Pearson Smith Realty. Maybe you could give everyone a little bit of background on your experience in property management. How’d you get into this?

Patty: Oh, good lord. Many, many years ago, I won’t give out my age, I’ve always liked real estate and just renting property and I was living in Montana at the time. I thought, “You know what? This can’t be that bad. Let’s try this out,” and so I met this fellow who owned a complex and that’s where it all started.

Jason: Were those famous last words?

Patty: No, I guess I’m one of the old people that started this long before we had cell phones and technology, Crowdcast and all those kinds of stuff so it’s really been interesting watching it grow.

Jason: I want people to realize that you have single handedly helped out a lot of doors to some property management businesses. Tell everybody a little bit about your BDM sort of experience.

Patty: I’ve done the franchise route. That’s where I met you many years ago. I did that and grew it and worked with a lot of people in the franchise, which is great, and I was able to do a lot of training. I’m a teacher by trade so I go back to—property management, I think, are protectors to some degree, and so the educating, teaching and trying to explain how to do things is just at the root of what I do. I got to do a lot of training in the franchise world of property management and just kind of kept growing and growing, and it just seemed to make more and more sense.

Jason: While you were working at that franchise, I think you added maybe about 600 or 700 units to the franchise.

Patty: Yeah, in about four years.

Jason: I’m trying to help you brag about yourself a little bit in a relatively short period of time. I think everybody listening would be curious, what are some of the things you’ve done to help grow a property management business just as one of the big challenges?

Patty: One of the big things is talking. You’ve got to be available on the phone and talking to people. All of this technology’s great, having drip emails and all that kind of stuff, but it comes down to the real relationship and being there when they need you. It’s not the SEOs. It’s not all that stuff; it’s about a real person needing real services and being able to help them when they need them. That’s the basis of what we do.

Jason: Absolutely. I think, a lot of times, we overcomplicate things in property management and we think we’ve got to automate everything, we’ve got to systemize everything and we’ve got to create a bunch of drip emails, we’ve got to do SEO, we’ve got to do pay-per-click.

We’ve got all these crazy things that we’re trying to implement and do, and then the challenge is that we’re missing the most important element, which, in property management, if you are a protector, you are taking care of people, and taking care of property. People don’t buy property management; they really buy into a relationship with a property manager, and I think we lose sight of that.

Sometimes,we think, “I’m trying to sell my business to them,” and, really, they’re not trying to buy your business. What they’re trying to buy into is whether or not they can trust you to take care of their property.

Patty: Exactly. I think people are not confident enough sometimes and they think, “I’ve got to talk, and talk, and talk,” and you never stop breathing and then you just become an elevator speech and everybody’s saying, “You’ve just got to be yourself. You’ve got to be confident, you’ve got to feel good about what you do in the service that you provide, and the rest comes.” It is crazy how complicated people make it.

Jason: It would probably be true, then, to say as a property manager if you’re working on closing a deal or soliciting somebody to hopefully get their business that you need to be asking a lot of questions.

Patty: You need to be asking more than you’re talking. You need them to talk. You need them to tell you where they’re scared, where you can come in to help them and where you can support their needs. That’s what they want to hear even though that’s not what you’re hearing them ask.

Jason: What are your favorite questions to ask, then, during that sort of sales process or maybe even in initial conversations to really identify where they’re at and whether or not you can close that deal?

Patty: I want to get a report going as quickly as possible. “So, tell me about yourself.” That’s kind of like the first thing, and they will start talking, and they’ll tell you, “Oh, I just had it and got it today. I’m moving to California. I’m coming up by you,” and he’s got to move, and he’s got this house, and there’s no way he could sell it because he just bought it, and you just let them go.

They will start answering all the questions themselves when you ask them, “Just tell me about yourself. What time would I mail? How can we support your needs? What is it you need?” and let them ramble out. Once they ramble it out, in your head, you’re already knowing how to answer those questions that they—the holes in your life that you can plug.

Jason: Yeah. They’ll start to help you identify some of their pain points. They’ll start maybe even giving you some clue as to what they want. Really, the two things you need to know to close a deal are, “What problems do they have that you can solve? What’s their pain?” and, “What do they want?” and that’s the outcome of solving that problem, the pain and the pleasures. If you have those two pieces, those elements, that can be really effective.

I think, a lot of times during the sales process, if we get too caught up on our own voice and what we want to say to them, we miss really digging into that pain because the stronger we can really identify that pain and really connect with it, and the stronger we can really connect with what they want and really get clear on that, and help them be really hyper aware of those things, the easier it is to close a deal, but if we go, “Yeah. Yeah. Yeah,” and gloss over it and move on to what we feel like we need to tell them or we want to say as a salesperson, then what ends up happening is they start tuning out, they are thinking you’re just a commodity like, “You’re all the same. Every property manager’s the same,” and they’re probably heard that from most of the people they’ve talked to.

“Well, we do this, and here’s our fees, and here’s how we do it, and we’re going to do this. We’ll come out to your property,” and they’re thinking, “Well, what about my problem?”

Patty: Right, and you just sound like a recording like everybody else. No. The one I had today, he was asking about going to California. I said, “Well, great. What’s prompting you to move? Is it a job? Are you from there? Tell me about your trip to California and this new chapter in your life,” and then, all of a sudden, it all just comes tumbling out. In allowing them to talk and then, at the right time, knowing when to—and you’re not going to know until you know.

Now, every human, luckily, is different and all that good stuff, and some people are your very Excel Spreadsheet-of-the-World, some are the technical people, some are more like, “Where’s the pictures?” or whatever, but you don’t even know what they are so stop trying to sell that until you even identify what it is.

Jason: Do you feel like, over time, you’ve become really astute at understanding different personality types? Because what it sounds like what you’re saying is you’re taking some time to get to know them to build rapport, but it sounds like you’ve kind of categorized people a little bit in your head as certain personality types.

Patty: I did.

Jason: Give us some examples of some different personality types that you maybe come across that are different like this gentleman from California. How would you categorize him as different than somebody else that you might talk to?

Patty: He was right to business. He doesn’t want any—he’s no fancy-pants. He just wants to know, “All right, am I going to make my numbers? Is this going to work? What is my involvement in this?” He was just so cute so when he talked about himself and told me about what his needs were, what he did for a living, and all these kinds of things. Every human is different.

Now, I don’t mean to stereotype, but you have to figure out who your audience is. “Well then, great. Now I know what’s going to make this guy happy. We have this portal. Everything is there for you. You have electronic filing cabinets. You’re going to have monthly statements,” and then you go down what they’re really after that’s going to make them happy.

If it’s a person who is more about, “Oh my gosh, I’m so worried my house is going to be torn up,” or if their baby, and they just built, and they picked out every cabinet and all that kind of stuff, it’s a different, softer approach because now you’re dealing with the emotional side of the client. So you have to figure out where they are because you don’t know how to make them feel better unless you know whether it’s making them anxious.

Jason: Got it. Some people might be a little more on the analytical side, they might be a little more concerned about the numbers, you might have some people that are a bit more on the emotional side, maybe the property is connected to a family member or there’s some history there emotionally or there’s some sort of pain that they’re in, emotionally, that is connected to this.

One of my favorite follow-up questions during the sales process after I initially connect with people and get familiar with their situation is to ask, “Why now,” which is a great question just to identify, like, “So you’ve had this property for a while. Why now? Why is this an issue now?” and then I get a whole different set of answers a lot of times.

Why now? Why now are you reaching out to get property management? You’ve obviously had this for a little while and maybe you’ve been self-managing. What’s sort of driving this? Then you’re going to get even more insight they’re going to share with you, and that’s where, usually, I get the real pain answers, when I ask that question.

I’ve heard anything from, “I have cancer,” or, “My family member just died.” To not know that information and to just keep plowing forward in the sales process almost seems insensitive sometimes when you get to the bedrock of what’s driving their decision-making to reach out for help right now.

Patty: Absolutely. Now, this guy, obviously, he’s very excited. He’s got a position in California so he’s changing coasts. He’s not happy about having to pick up and move his family, but it’s okay because he’s leaving winter behind. He’s happy to get rid of our cold. We’ve got more snow coming. That makes him very happy so that piece of it is good for him but then with that move comes the hardship because his brother is here. You have that to go with. "Maybe I can just have my brother do it,” and that comes into play as your why.

You’ve just got to be yourself, be a person and listen. If you’re just a person listening versus this façade as some person who’s just doing their job, walking in, you’ve got to be confident and you’ve got to care.

Jason: All right. If you’re confident and you care, what are some other ways that you are creating opportunities to start these relationships? Because I think a lot of people are like, and I hear this all the time, “If I just get people on the phone, I can close them. I close everybody,” which usually means they’re closing all the word-of-mouth leads, which are easy to close, but the real concern they have is, “How do I get more conversations?” How are you creating opportunities to have these relationships instead of just waiting for them to come to you?

Patty: You’ve got to put yourself in positions with other people so I do that through teaching. I’m giving away a value to a lot of different offices. I’m giving away a value. I do a lot of different speaking engagements for free, no charges, because, in doing so, then, one, they look at you as an expert, two, you’re willing to give your free time and to help people and talk with them, and you’ve just got to find places in your communities to rise above and be there to volunteer.

I look at it as I’m a farmer. It took me a long time to grow up and figure out, “Where am I going to be? I’m a farmer.” I like to grow businesses. I like to grow relationships. What’s a farmer’s duty? There’s different kinds of farms. You can farm neighborhoods. You can farm HOAs. You can manage those if you want to. I personally like HOAs, and a lot of people do manage those. Are you doing more of a commercial management or residential? There’s different audiences. Are you looking for investors?

You have to think somewhat here, and maybe you want to level up, but you’re going to have to set a plan to decide where you’re going to farm and where you’re going to get these people from. Then, once you do it, one of the duties or tasks, if you will, of farmer is you get animals now. Okay, property managers, what kind of animals do you want? Are you raising these investors? Are you doing accidental landlords? Are you looking for trustees?

I’m one of them. One of our animal’s realtors. Some of those are big brokers, but I do go to a lot of real estate events and I do a lot of talking and a lot of chatting. You can do NARPM events. You can do realtor associations. There’s just so many different places that things are happening. You’ve just got to get out of the chair and be out there where the people are because they’re not going to find you in your seat while you’re still there talking on the phone.

Jason: Right. I think one of the big challenges is that there’s so much opportunity in the property management industry. There’s such a high percentage in the US that are not using property management that are self-managing and yet you have so many property managers that are just looking over their shoulders back and forth and everybody else going, “What are you doing to wait for leads and wait for business to come to you?” They’re hoping that they can take money and just hand it to a marketer and suddenly people will just walk in the door and say, “Take my money.”

You’re out there actively doing what a coach likes to do. You’re actively out there creating business instead of waiting for it to come to you.

Patty: Eventually, it comes to you. Once you get enough to go in and you become—yes, you can get that going. Every day, you should have prospecting time, whatever that is. If you’re going to spend two hours every day or whatever it is you want to grow to or do, that’s your call. But you’ve got to have that dedication and that discipline to do it because if you don’t, then time just slips on by.

Jason: Let’s create a little bit of perspective here. It’s taken you a little while, but when you start out in a new market, which you’ve done several times, and you decide you’re a farmer using this analogy and it’s time to farm, and you’re looking at the field and you feel like you need to get things started, how much time do you start spending in a week on prospecting or maybe in a day?

Patty: Today’s world is so different from what it used to be. You’ve got meet-ups, you’ve got Crowdcast, you’ve got podcasts, and you’ve got all this stuff out there. So you’ve got to quiet the noise down, and you have to start somewhere. Don’t be afraid to start because that’s the other problem. Maybe you can just say, “I’m going to pick this neighborhood.” Okay, great. “In this neighborhood, I could do a little research and see that there are 5000 thousands in this development so how do I reach out to these people?”

Okay, maybe you go and you meet the HOA people. They’ve got different events that happen so you’ll want to be part of all that. There’s usually some businesses nearby that you can be part of. Let’s say you’re going to take this area, you want to at least be putting in, at a minimum, at least three hours a day. If you’re going to do eight hours, let’s just say, I think there should be at least three hours of that as prospecting.

Jason: So, probably about 15 hours in a week?

Patty: Depending on how much you want to grow and how fast you want it to go because sometimes growing too fast isn’t good.

Jason: Right, so then you’d be able to handle it, and manage it successfully, and deal with each new property to bring you on each—bringing on board and effectively.

Patty: If you’re going to promise something, better do it.

Jason: Right. Yeah. They can start farming neighborhoods. They can start reaching out. They can start hitting up some groups in the area. How much time are you spending now that you’ve kind of primed this engine in the business that you’re in now towards prospecting?

Patty: Probably at least the same, if not more. There’s very little internet need-leading or any of that going on. At this point, I’m curating it. I’ve got people coming in and I talk to some, need to nurture some and all that kind of stuff, but you can never stop this. You can’t ever get happy like, “Oh well, I’ve got these three coming so I’m all good,” like a realtor will. “Oh, I’ve got these few commissions. They’re going to close them and I’m all good.”

You can’t sit back and relax. There’s no relax. You’ve got to keep it going and, sometimes, it’s evening weekends or whatever it is and, of course, they’re seasonal in this, too, so you have to be watching that, but you can never stop prospecting because even if you’re happy and maybe your goal is a hundred doors and you’re happy with a hundred, they’re not going to stay with you. That rollercoaster’s going to start moving. Somebody’s going to sell. Somebody’s back. It’s constantly changing.

Jason: Right. The sales has to outpace the churn, and the doors getting sold, and so on. I think you bring up a good point in that if you don’t have consistent prospecting and consistent lead-gen systems in place where you’re doing it consistently, then what ends up happening is, usually, it creates a sales slump, and those last for maybe a month to 90 days, typically, and they’re difficult to crawl out because you’ll build up the pipeline and then you have deals closing.

If you get comfortable and turn that off, what you’re doing is you’re creating a problem a month or two months later in which you’re going to have a sales slump. You’re going to have less cash flow coming in and you’re going to have less new clients coming in, and it’s going to get quiet and then you’re going to hi ho Silver. You see salespeople, "Hi ho Silver," they jump on the horse and they’re like, “I’m going to ride this hard and I’m going to figure this out and do sales, sales, sales,” and then they come across almost needy.

Needy in sales is creepy and then the problem is it starts to get carry for them.

Patty: They’re panicking.

Jason: They start to panic, and so they can avoid these sales lumps by creating some consistency even if they’re only able to dedicate a small number of hours a day or even just an hour a day, as long as they have some consistency throughout the week that they don’t just shut it off for half the month or shut it off for a month, they should consistently be able to generate leads. They have no control when those deals will really close. If they aren’t doing it, those deals won’t be closing.

Patty: Yeah, they’re zero. In the classes that I teach and things, I might get one or two leads that day and then I don’t know what’s coming. You cast out the net and you see what it brings in. I didn’t want to do it. It was early December. It was a bad time of the year, but they really wanted me to come do this and I was like, “You know what? Absolutely. I’ll be there.”

Now, I didn’t think there was going to be much of a turnout but you never know, and it turned out there were four people. I was like, “Whoa, that’s pretty cool. That’s all right. I could do four. It doesn’t matter.” Out of the four, I got three so who would’ve known? It was awesome. Even the lady that was doing the events, turns out she was convinced and she decided to give me her house to manage. You never know what’s out there and if you’re not out there, you’re not getting anything.

Jason: I think there’s a direct ratio between the level of connection and the level of intimacy in a sales situation and the close rate, and so it’s not just about numbers. It’s not about how many people show up but, like you said, it’s about how well you’re able to connect with those people. The smaller the group, the more intimate that communication can turn, like if you’re working with one-on-one with somebody, I’m sure it’s a very intimate conversation. It’s personally about them and their pain that we talked about in the beginning.

You get three or four people, it gets a little bit more broad. If you’re doing it through an entire room, there’s some authority there and that’s nice, but you’re going to then have to do follow-up to create that intimacy and create that connection afterwards, which is really important in those situations, but you then are getting to do one of the many sales and establish yourself as an authority in front of them.

Patty: And you didn’t cancel. They never expected that you’re going to cancel and bail. That would stop you from getting the next gig. These are all gigs. We’re constantly going after these gigs. You cancel one and, “Yeah, do I really want to get out there? It’s 7:00 at night. Could I maybe do more work on the site? Yeah.”

No, being in front of people makes a huge difference. I’ll tell you: Some people don’t think about it, but if you’ve gone on a meeting, you’ve tried and you’ve lost, you need to ask why. At this point, “Oh, that’s fine. I have another company.”

“Okay, you tell me so I can make better my business. What is it that made you decide to go with them and not with me?” It’s a hard question to ask, like, “Why don’t you like me?” but you have to ask the question. “What was it? Was it my perfume?” But you have to ask because if they say, “Well, the other guy seemed more confident.”

Now, you know what to work on. You need that constructive criticism, but most people don’t want to ask because they just want to feel, “Ah, they didn’t fit anyway. I don’t want them.” They may or may not but if you don’t ask, you never know and then you can’t improve.

Jason: Feeling safe asking for feedback is a huge superpower. I feel like, for business owners, not being willing to palate or not being able to palate, digest, absorb or take in feedback is a dangerous thing. I honestly feel like I’ve built my company on thousands of failures, and so being able to get feedback, make mistakes and to keep moving forward as a business owner is huge. If you don’t get a deal, there’s some awesome feedback waiting for you that you could potentially gain from them so I love that idea.

Sometimes, it’s just simple as just sending an email follow-up. “Hey, honestly, could you tell me why you went with this other company? You won’t hurt my feelings. It would help us. If there’s anything that you can do to help us improve, it’d be great,” and people love sharing advice.

Patty: If you put it that way, “Look, I just need a favor. I know that you’re going X, Y and Z, but I would just so be appreciative if you can give me some constructive criticism. What exactly was it? Was I 10 minutes late and you didn’t like that? Don’t you like our pricing? What is it? What swooned you? What was it?” and maybe it was just, “I have no idea. I just like this guy better.” Okay, that’s fine. I’m okay with that, but if I don’t ask, I never know, and if you don’t know, you don’t improve. It’s kind of like those, “Listen to your sales pitch,” and nobody likes to hear their own voice and no one wants to hear why they’re not picking you but you need to.

Jason: Yeah. If we’re really honest with ourselves, we really do want to make money and we really do want to know. We really do want to know why they didn’t go with us, and so being willing to be vulnerable and ask for that feedback can be really powerful.

Surprisingly, when you do that, it gives you ideas. It’s like, here’s how to win more business, and sometimes it’s the things that they use. The deciding factors are so simple and they’re so simple that you’re kicking yourself. You’re like, “Really? That’s it?” I mention that on every call. It’s really simple.

Patty: You're not going to know if you don’t ask. You've got to ask.

Jason: One of my favorite tactics, though, if I don’t get a deal, is to lead the door open for the future. “Why’d you go to somebody else?” Great, I really appreciate that feedback. “If things don’t go well with this company, you have any trouble or this happens to this, we will still be here, ready and willing to take your business and help you in the future.”

I love just leaving that door open. I don’t want them to feel like, “Well, they shut the door on me and they’re dead to me.” I’m creating that anchor for the possible future because I’ve had clients go with another company, they have happened exactly what I had explained to them would happen, and they come back and like, “You were right and I would love to work with you guys.”

Patty: Because they’re not ready to hear it yet. They haven’t reached the point what you’re telling them. They can’t absorb what you’re telling them yet.

Jason: They don’t believe it, they haven’t experienced, and they have to go experience that. They have to go try out the cheapest property manager, the cheapest website company or the cheapest whatever, marketing firm.

They’ve got to try out somebody and test out stuff because they believe they know better and then, as soon as they realize that they don’t know better, they didn’t know something, something blindsides them or they’ve run into a snag that you had kind of mentioned or foretold, you’ve created this powerful anchor that they’re going to remember you the moment that happens.

Patty: Yeah, and it’s great because—you have to leave it open to the point that they’re not going to—a lot of people don’t want to ask the question why they didn’t get it. It’s the same thing; they have to be comfortable to come back to you because you’re not going to say, “I told you so,” so it has to be very open. I always say, “Look, I’m a sounding board. If anything happens in the future,” and sometimes, they’re like, “I’m going do it myself.”

You have those people in the world and you have those that go to the bare minimum bones. “I’m glad they can help you for that price. It’s not something that we can do, but if something should change down the road, if you have questions or something odd comes up, you’ve got my number,” and I sit there with them. “Can you put me in your phone please?” and I make them do it while we’re there.

Otherwise, they’re not going to put you in there. You’re gone. They’re going to forget so I say, “Here, put me in there,” and I watch them put my number in there if it’s not already, and if it is already, I just say, “Just put, next to my name, ‘Call her.’” He’s like, “What?” I say, “Well, down the road if something comes up, you can say, ‘Oh, yeah. It says, ‘Call her.’ You can search and find me.” They’re like, “Okay?” but it works because they do.

It’s kind of like when you have a little child that they’re just not mature enough to understand maybe how to tie a shoe or whatever. They just mentally can’t do it. It just can’t happen. These people are not going to be able to get where you’re at yet, and you’ve got to understand that and it’s okay. They will mature eventually and we’ll see what happens, but making them put you in their phone is like, “Oh, I’ve got to be in that phone because they’ll never find me if I’m not on their phone.”

Jason: Such a little hack and I can see how effective that would be. Yeah. As soon as you have this problem, you’re creating this anchor. “As soon as you have this problem, if you run into this or if you run into any issues, I am available for feedback. You don’t even have to remember my name. Just put, ‘Call her,’ in here and, remember, call her and just plug it in.”

You walk them through, making sure they get it into their phone. They’re going to do it. They want to finish the conversation, they want to be done and you’re hanging out with them or you’re talking with them. “Enter this into your phone.”

Another tactic is you could say, “What’s your phone number? I’m going to text-message you right now and then you have my phone number. Enter this number in,” or however you want to do it and just make sure you get them into the phone.

Patty: That’s the new Rolodex.

Jason: Then, send them a follow-up email after that and say, “Just in case you ever lose my contact details, here is my information. Here is my direct number. Reach me if you run in any problems.” I love the idea you mentioned of being a sounding board. I think a lot of property managers are so focused on getting the deal, but what they really need to start with is being a resource.

Patty: Yes. Yeah. I always tell them, “You’ve got my experience at your disposal.” You’re doing your research. That’s great. We all have availabilities on our computer to do some research. “Great. I'm planning to get a roof, I’m going to do some research,” whatever it is, and that’s all great. Hey, absolutely. I'll do the same thing. I said, look, if you hear something from one of the other companies that you’re shopping or something doesn’t make sense because you’ve got to peel back some onions to get down to—how you’re really comparing here, apples to apples, call me and I’ll answer whatever it is. There’s no cost to you. You’re just going to call me and ask me a question.

Usually, they do. Maybe you’ve met with them or they’re not going to be moving in for six months or it could be one of these long nurtures or whatever, they’ll come up to something. They’ll go, “Hey, someone told me this but you told me that, by the law, it was this so what really is it?” I’ll say, “Oh, absolutely. Let me send you the statutes,” and, all of a sudden, you’re on top again because they’re constantly doing the comparing. Guess what: I’ve got the law that states this is what it is. Now, Patty wins. I like it when Patty wins.

Jason: I’m sure, in some of those situations, you’ve gotten the deals just because you actually showcased your expertise. They gave you that chance.

Patty: Yeah, it’s amazing. Even in today’s day and age, how much out there is just make-believe and fluff. “Well, our agent said this was it,” or, “This one said this is it,” and, all of a sudden, that becomes a new law and it’s not, and there’s a lot of it out there. Unfortunately, people get away with doing stuff and they keep doing it, but they don’t invest in themselves enough to continue the training, go to classes, just become smarter or at least be updated or something.

Those agents, even when I’m working with them, I can look them up at our MLS system and I look and see when something starts–you get that gut feeling. I’ll look them up and I’ll just say, “Oh, okay. Well, they haven’t done a rental deal since 1997 so now I know how better how to work with this agent to make this deal get through.” Knowing what you’re dealing with helps.

Jason: How much time do you invest in making sure that you’re on top of the industry, that you know what the latest laws are, that you know what’s up with property management in your state? How much time are you investing on a regular basis towards this? How do you stay connected to all of that?

Patty: I’m probably obsessed with it more than most because if we’re here—my job is to protect your property and protect you. How am I going to be done if I don’t know what all this stuff is? Actually, I was on the phone yesterday with one of the attorneys and a simple little thing, as an example—every state’s different, but the pet addendum that’s used in our state does not have a sentence it’s needed to be there that says, like a tenant signing off, “Pet does not have a bite history.” One sentence, that’s all we need. That’s it.

To give the insurance companies all of our emotional support, our services and all of this, they’ve gone away from that dirty dozen. They’re not barring any animals anymore. They’re going by bite history. Why doesn’t our farm have that? I’m like, “Hello? Boo.”

I do volunteer with those associations. I volunteer on education committees, on the fair housing task forces, the forms committees, all that kind of stuff, so that knowing where we need just makes sure it’s pushed through, one. Two, finding out what they’re up to and what we’re going to get is another and fighting for what we need.

If you’re staying in two and you’re involved in these organizations, it’s all volunteer so you don’t have to pay for this kind of stuff, but you volunteer in NARPM and other ones. I’m heavily involved in NARPM and trying to make sure all that’s going through, but you’ve just got to find out what’s around you, volunteer and get into it.

I guess I’ve never really sat down how many hours it takes; some of it just comes up and you know there’s a need for it so you know the right people to call and say, “How do I do it?”

Even if you don’t know, maybe you’re brand new, and just moved here, “Okay, who’s the wielder association? Who’s the property management companies? Where’s the NARPM groups? Where’s this? Where is that?” Some of it is research. You’ve got to find out how do you know and who do you know to call. You find out and then say, “How do I volunteer to get to the meetings?” and then, pretty soon, it just builds its way from there.

Jason: I’ve heard you mention a few things. You’ve mentioned you talk to an attorney so you’ve got some attorneys that you’re connected to that you leverage as resource, you mentioned NARPM which you use as a resource, you mentioned real estate or realtor association and being connected to those, and then you also mentioned doing your own research.

Overall, you said you’re obsessed, and I think it’s important that if there’s one thing you should be obsessed about as a property manager, it’s being able to effectively solve people’s problems. That’s this, is to solve some of these problems. If you are obsessed with doing it correctly and solving people’s problems, that gives you a lot of confidence going into a sales conversation, I would imagine.

Patty: Yeah, and there’s so many chat groups, Facebook groups and all this, but the other thing, too, is make sure that you’re not listening to the players of the world. If I’m listening to people telling me things that aren’t the real source, then I’m learning it wrong, which is the only reason I teach and I have my own real estate school is I teach it right, but if you’re listening to the wrong sources, then now what?

I had a call today from a fellow. He used to own a property management company, I’ve known him for years, and he was a meeting. I won’t say which company he’s with now. Anyway, he’s just doing real estate; he’s not doing management. He goes, “Hey, I thought, years ago, when we did this and this, we weren’t allowed to give out the credit reports,” and I said, “It depends on your contract.” He said, “Yeah, but they’re saying dah, dah, dah, ” and I said, “Who are you listening to? Wait a minute. Why am I on a speaker there? When’s the next meeting?” and that was my question to him.

He goes, “Oh, absolutely. Okay, can you do April?” I said, “Give me a date, Baby.” When I find out and it doesn’t matter whose name’s on the doors. When I find out that there’s stuff happening that I know is incorrect, based upon me being around the right sources and the smart people, then I want to go fix it before they all start it because when we’re running these properties, we’re very real estate-driven. Everything is done through the MLS here, so I’m going to bump into these agents. I don’t want them doing it wrong because it makes my job harder plus I want their referrals.

Jason: As soon as you identify that somebody is inaccurate in maybe landlord-tenant law or in process, you leverage that as an opportunity to go and speak to them, educate and to teach, which then feeds you referrals.

Patty: I attack it. I’ll bring the cookies, I’ll bring the donuts, and whatever. Let’s go. Give me a date now.

Jason: They have a question and you’re like, “You have an audience? I’ll come answer that question and I’ll give even more value.” I love it.

Patty: It’s funny because it all just kind of evolved. When I was doing the franchise pieces, I met a lot of great people all over the world, literally all over the world. It was special over every country and it just became—they would have something come up. “Patty, can you give me a hand? Can you help me?” “Yeah, what’s going on?” and, because we were the same franchise, it was easy for me to answer a lot of questions so I kind of became the 911 or the 411 when they would ask questions.

It was awesome and then I started training with them, too, and I enjoyed it. I enjoy fixing people’s problems. I’m one of nine children so I’ve got on-the-job training, you see. My dad’s an engineer and my mom’s incredible so you learn this stuff. There’s a lot of realtors here that have called me on different things and when they call or when you work with a realtor on something, if you are dealing with them, ask them.

You’ve got to ask, “What do you guys do for training?” and they’re going to come back and say, “Well, what do you mean? All we do is a rental deal.” “I know, but you do guys property management in your office?" Are you asking these questions because there's another opportunity or a source. Most people get the deal done, they move on and don’t even think twice about it, but you can get feedback.

Jason: Right. You’ll ask them, “How are you handling leases? How are you handling property management-related things?” and as soon as you notice there’s problems, you use that as leverage to say, “Hey, maybe I should come teach a class for you guys. Let me come share some ideas with you.”

Patty: All I need is a little crack in the door.

Jason: “Got it,” and then you’re in. It’s a magical and powerful thing if you can immediately shift yourself with any prospect or referral partner into the category of an advice-giver. As soon as you’re there, you are in a position of authority and a position of trust, and that is what creates sales.

Sales happens at the speed of trust, and so you can skip right to the top simply by shifting yourself and positioning yourself into a position of being able to give them advice, and that instantly establishes you as a trustworthy person in their mind that you can now give them information and value. They’re receiving information and value and once you give them value, then it’s a lot easier for you to get value from them.

Patty: Yeah, and then you're going to find out too—let’s say you go to their April meeting. Okay, you’ve done their meeting. “So, can I come back next April? When’s your next meeting?” That’s usually the one you can’t stop. It’s follow-up. Our laws in Virginia change every six months. I need to come here every six months so that I can keep you guys abreast of it, right? Because the brokers don’t want to do it. You have to make sure you’re cycling there every six months.

Jason: Don’t just give up. After you do it once and you’re like, “Wow, I did this. Hurray!” you might be leaving a lot on the table if you don’t just simply ask, “Can I do this again? The laws are always changing. Things are always coming out. I’d love to come right back, and I’ll put you in my calendar and follow up with you, and let’s just do it again,” and they’d probably say, “Yeah. Well, this has been great. It’s been a good experience. We would love to.”

If you don’t ask, then, odds are, they’re going to be focused on their own problems, on their own business, and their own things, and they’re not just going to go, “Maybe we should invite Patty back. I wonder what’s going on in property management law lately.”

Patty: They’re not going to call you unless there’s a problem. It’s like when you go to a dentist. Before you leave, they have you booked. “How are you doing in June?” or whatever. They already had you booked for the next one. Before you leave that office or whatever groupie you’re doing, you should be already booking your next event. It’s a new gig. Get that new gig set up.

Jason: Cool. Really smart. What do you do at these events to make sure that you’re able to follow up and connect with people after the event?

Patty: Some events, I do registrations so that I have all the information. Some don’t so if they don’t, I need to sign up. I always give a raffle giveaway put their cards in. If they don’t have cards, I have index cards that they put all their information on it. If it doesn’t have an email and a phone number, it doesn’t count; they can’t be pulled.

If they want the freebie, they’re going to have put them both in, and I want them both. I want their cell phone and I need an email. Otherwise, whatever. I can find the rest out in the internet as to where you live and all that kind of stuff, but it depends on the audience. If I’m with realtors, they love their toys. They’re going to hand me their cards. I do a lot of stuff, too, that’s landlord lessons so I do a series with landlords. I have all kinds of different people come join me, different partners I’ll partner with.

If it’s just a landlord, they may not have a business card. Maybe they don’t want to give me their work stuff so I always have index cards and I have them already ready to go. Phone, email, name—boom. It’s all you need. Otherwise, you can’t win this $100-giftcard and everybody wants a $100-giftcard so in they go.

Jason: Cool. You’re gamifying the whole situation a little bit here just to make it joyful.

Patty: Yeah. People like to want to do stuff and they want to be told. They do, too. Kids will tell you they don’t but they do. They really do and adults do, too. Did you go to the DMV? I know we don’t have to go anymore, but when you did go, I always feel like a DMV person when I'm doing the W-9 form, is they would highlight that one spot. They highlight where your name is, your phone number and all that kind of stuff.

It’s great so it’s like, “Okay, here’s what I need,” and they just look at you like, “Oh, she said so,” and they fill it out and they give it to you, just tell them to do it.

Jason: Yeah, they do it. “This is what I need from you. Here you go,” and they just do it. They’re like, “Okay.” You’re like the Pied Piper.

Patty: Well, one of the biggest compliments I ever got and I didn’t even know is my son has become a realtor, which is crazy and I told him that. I didn’t know he was listening. You’re in the car, you’re his mom, and you hear all this stuff, and you figure they’re not listening. They do listen. Anyway, I used to tell him—I’d be talking to someone and when I had papers that need filled out that I’m actually meeting in person, I highlight everything; it’s all ready to go.

He’s eating his pie. “Here’s your pen. Follow the yellow brick road and everything is all done.” I heard him repeat that and I was like, “Oh my, gosh.” There we go. That’s one of the biggest compliments you can get, is when somebody repeats what you said. He goes, “Well, I told him to follow the yellow brick road.” That went on his first listing with him and that’s what he told the client. I’m like, “Yes.”

Jason: Yellow highlighter. Follow the yellow brick road.

Patty: Yes, that’s all I need, is these signatures.

Jason: Patty, I think you’ve shared several cool little hacks and ideas. It’s really clever and I think all this is very helpful for property managers who are seeking to cultivate relationships which eventually lead to contracts. Are there any other recommendations or any other challenges you’re noticing among property management business owners that are struggling to grow that they should be paying attention to?

Patty: One hack that I’ve seen that’s not good that is out there that they might—I don’t know if they’re aware of it or it’s happening near them, but it’s not for growth; it’s more for protection. A lot of people have identity theft. It’s all over. What a lot of people have done to save it instead of paying money to some of these companies is they’ve just frozen their credit. They’re not buying anything. They just freeze it.

Therefore, they didn’t protect it, but what’s happening is we have people who are putting applications in our—there’s 5 million different software out there, and most people doing applications online actually agree with that. The application comes in and what’s happening is the people with really bad credit are freezing their credit. So when we pull the application and we run it, it comes up as, ‘N/A.’ We don’t see that they have 14 late payments. We don’t see that they have two charge options, three bankruptcies and all that kind of stuff because it comes up as, ‘N/A.’

People assume, “Oh, well, based on the birth date, they just don’t have enough credit established so it’s coming up as, ‘N/A.’” Not true. They’re freezing it so they’re bypassing our system, which is pretty smart when you think about it. It’s pretty slick. What I’ve done and everybody can do is just add one sentence to your application that says, “Have you frozen your credit? If so, please unfreeze before applying,” because if they’d lied on the application, now that affects them getting released, but it’s a pretty slick little smart way.

I’ll give them credit for that because, by freezing it—and I can’t tell you how many people have gotten by with it because most owners—so, if I’m telling you, Jason, “Well, they don’t have any credit based on the score and they really don’t have any debt. They just haven’t established yet according to the agent but they’re making this much money and they’re going to come in and take care of your house, and the property manager’s telling the truth.”

You might buy that, but if I tell you their credit score’s a 420 and they have 18 collections and all this kind of stuff, you’re going to say, “No way,” so I give them an A for effort. However, they’re not getting past us.

Jason: Yeah, if they have a credit score of 420, what then…

Patty: You’re probably going to say no. If I tell you, “N/A. They just don’t have any,” versus a 420, you might be willing to accept the, ‘N/A,’ but you’re not going to take the 420 so it’s a pretty slick little racket they’ve got going on, but the way […] one question in the application and then now you’ve got it.

Then, the other part, too, is there are some people that we have a lot of military government being here near DC so we have a lot of people moving and they maybe forgot they’ve frozen it, and I don’t want to run the credit and then it comes up nothing then we have to go back again.

By asking that question, if it’s a legitimate person that has done so, they can see on there, “Oh, wow. We froze it. We’ve got to fix it,” and they’ll fix it before they apply so it’s a good thing, but it’s been used in a little interesting hack, if you will.

Jason: Got it. All right. Patty, all this has been super informative. I agree with you that property management is about relationships. People need to be getting out there, creating relationships, connecting with people. There’s so much blue ocean and opportunity available that’s just waiting for leads to come to you. It’s probably not a great growth strategy in general, and I know you’ve had phenomenal growth in all the businesses that you’ve been affiliated with because of these methods so I think everybody should pay attention and listen to Patty.

If anybody has some questions for you or wants to reach out to you, how can they get ahold of you?

Patty: My simplest email is realtorp@gmail.com or you can reach me on my cell number. I’m on Facebook. I’m on your staff, of course. I actually was thinking, Jason.When I was back with OpenPotion, did you live in Idaho or somewhere at the time? Is that where it was?

Jason: Yeah, I’m in Southern California now.

Patty: I know, but was it in Idaho? I want to try to remember.

Jason: Yeah.

Patty: Gosh, what year was that?

Jason: I don’t know. A while ago.

Patty: A long time ago. It’s so cool to be old enough, to have a relationship with someone like you back then, and you had the dreams and the ideas to do this, and then to actually see you do it is awesome.

Jason: I appreciate that. I think we’ve probably known each other for about a decade, realistically.

Patty: Gosh, we probably have.

Jason: Yeah, because I helped my brother, Bryant, with his business originally, probably back in 2008.

Patty: I was going to say ’07 or ’08, probably.

Jason: And then you were one of the early clients, I think, that we’ve worked with.

Patty: And you often have.

Jason: Exactly.

Patty: Back then, even. See? When you were just starting out on this. It was awesome.

Jason: We’ve learned a lot since then. A lot.

Patty: Yeah, it’s crazy.

Jason: Like I said, a thousand or more mistakes.

Patty: No, it’s all good. We don’t fall; we don’t get up so I’m glad it happened.

Jason: Yeah, always learning. Patty, it’s been great having you on the show. I appreciate you coming out and I wish you continued awesome growth and success.

Patty: And yourself as well. Thank you.

Jason: All right. Thanks, Patty. Okay. Cool. Everybody watching this show, please be sure to check out the community that we have going on online, which Patty had sort of mentioned on Facebook, which is our DoorGrow Club. You can get to that by going to doorgrowclub.com, and if you are a property management business owner and you are looking to add doors and grow your business, that is an awesome community of people that are helpful.

Then, if you want some help figuring out how to grow your business, you want to align and clean up your sales pipeline, clean up the major leaks that are limiting organic growth and preventing you from being able to really capitalize on a lot of the things that Patty was discussing, then reach out to us at DoorGrow. This is what we focus on. It’s helping you align your business so that you can create new revenue, create more growth, and maximize each door that you have.

You can get to us just by going to doorgrow.com. I’m Jason Hull of the DoorGrow Show and until next time. To our mutual growth, everybody. Goodbye.

Download this Episode

Apr 9, 2019

How should property managers deal with mold that affects air quality? How can they create a healthier indoor environment for their tenants? The key is to have a “green” professional perform tests and offer solutions.

Today, I am talking with James Armendariz of Green Home Solutions TrueEnviro. He shares a new perspective on how to handle molds and odors, as well as add healthy bacteria into the environment.

You'll Learn...

[03:23] Property managers usually try to get rid of mold by spraying a porous surface with bleach, which is 99% water that continues to feed the mold.
[04:30] Property managers often have to deal with odors left behind by tenants, including cannabis, cigarette, cat urine, and other smells.
[05:55] Painting cigarette-stained walls or using bleach only masks or covers up smells temporarily; TrueEnviro eliminates odor molecules from the environment for good.
[06:42] TrueEnviro removes allergens, pathogens, mold, odor, and bacteria to maintain and establish a healthy, indoor environment that smells like fresh air.
[07:33] Eat Dirt: Shift balance toward beneficial bacteria vs. bad bacteria.
[08:37] Good or bad, bacteria seeks a food source; TrueEnviro’s probiotic service eliminates food source that bacteria thrives on.
[10:09] Tenant may not pay rent due to illness and environmental factors that impact their ability to work and generate revenue; take action to decrease sickness, turnover.
[11:22] People travel from all over to India to drink water from a river that’s viewed as magical because of its strong flora of healthy bacteria fed by waste and sewage.
[12:48] TrueEnviro’s mold remediation product is Oceanic, which kills every pathogen and fungi; it has earned approval for use in hospitals.
[15:02] TrueEnviro can remove less building material, if it's not structurally compromised; instead of cutting mold out, the company cleans it to reduce client’s costs.
[15:46] Pre- and post-tests are conducted to obtain results and protocol for treatment.

Tweetables

Create a better way of life with a healthier indoor environment.

Bleach is not the best strategy for dealing with molds.

Property managers deal with odors left behind, especially the smell of cannabis, cigarette, and cat urine.

Resources

TrueEnviro

Green Home Solutions

NARPM

Eat Dirt: Why Leaky Gut May Be the Root Cause of Your Health Problems and 5 Surprising Steps to Cure It by Dr. Josh Axe

DoorGrowClub Facebook Group

DGS 72: Insurance Buying in 2019...Understanding Your Options with Vicky Methven 0

Transcript

Jason: Welcome DoorGrow hackers to The DoorGrowShow. If you are a property management entrepreneur that wants to add doors and expand your rent roll, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are DoorGrow hacker. At DoorGrow, we are on a mission to grow property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, expand the market, and help the best property managers win.

If you enjoy this episode, do me a favor. Open up iTunes, find the DoorGrowShow, one word, subscribe, and then give us a real review. Thank you for helping us with that vision. I'm your host, property management growth hacker, Jason Hull, the founder of OpenPotion, GatherKudos, ThunderLocal, and of course, DoorGrow. Now, let’s get into the show.

Today's guest we have James Armendariz from Green Home Solutions TrueEnviro. Did I say all of that correctly?

James: Yes sir, you did.

Jason: Welcome to the show James.

James: Outstanding. I appreciate it Jason. How are you?

Jason: I'm doing great. You and I connected briefly at the Los Angeles NARPM Chapter. I was there presenting and speaking. They brought me in to speak, you were a new member there or something, and you got to do your little presentation. I think I handed your card and said, “Hey, let's get you on the on The DoorGrowShow and showcase what you guys do.” I would love to get a little bit of background just on you. Tell us a little bit about who James is and how you got into this.

James: Yeah. Our company’s called Green Home Solution TrueEnviro. My name is James Armendariz, I'm one of the owners, franchise here. I just got into the opportunity to own a franchise, really control our own path, help people managing, and create a better way of life, a healthier indoor environment.

Jason: We're going to be talking today about mold remediation and air quality. What challenges have you seen that property managers are dealing with related to this that your company help solve?

James: Well, that indoor environment. You turn up mold, you have some sort of water intrusion come in that may not get dried out in time. We had a client report it, threw some towels over it, and thought it was good, but mold grew. Somebody was reporting [...] or something like that. It’s really a pesky situation that tenant, property manager, landlord situation and if you can have somebody who can come in and provide testing and solution for that mold, or whatever the case may be, certainly in a timely manner, with the green background, it's a great solution for property managers.

Jason: What do property managers typically do to try and take care of these problems?

James: Well, some of them, Jason, they throw bleach on it. One of their first things is to have a maintenance guy go out, spray it with bleach, and hope that it's taken care of, when in all actuality, bleach is 99% water. The water content absorbed into that porous material, essentially feeding the mold and then bleach does what it does, it kills the color on the surface and they think it's gone, only to come back two or three weeks later and say, “Gosh, this mold hasn’t gone away. It’s back.” Well, it never really left. You just got it embedded, stole the color and that’s a lot of [...] to take care of the mold for you.

Jason: Bleach is not the best strategy for dealing with molds.

James: No sir. Only on a nonporous surface. If you're dealing with bleach in a fiberglass shower that's hard, that’s not going to absorb water or anything for that matter, certainly bleach is best. If you're dealing with anything that's a porous surface, you do not want to use bleach.

Jason: What are some other challenges that you're helping property managers with besides just the mold situation?

James: Odor is certainly relevant in a property manager’s life. You have somebody moved out, they lived in that unit for several years or whatever the case may be, and there is an odor left behind. They know walking in to do that evaluation after somebody's moved out, “I am not wanting this unit with that smell attached to it,” so they give us a call and there’s the four C’s, cannabis, cigarette smell, cat urine, and gosh I can't remember the other one we had, but those are some very pesky odors and were able to actually eliminate all three and other one. Seriously, the tough smell would be [...] from the cabinets, but those are some tough odors we can get rid of, and we've got a very efficient and affordable way to remove those from the environment.

Jason: I was going to ask about smoking, that’s a tough one. You'll come in and you use your materials or your systems and you can remove these odors in the property. Then we'll be able to rent much more easily. Rent for a higher dollar amount, most likely, than if it had these potential problems scaring off prospective tenants.

James: Correct.

Jason: What do property managers typically do to deal with the odor things? What are they trying to do on their own? They might have their own little ozone machine. What are they typically doing and how is it different than what you guys might provide?

James: Generally, we’re trying to take care of things the most efficient way possible as far as money involved. I've seen everything from people try to paint over orange cigarette stained walls, hit it with [...], bleach is always a go-to whether it's mold or odor. Those are some of the ways they're trying to but it's really just masking it or covering it up. It’s a band aid. We have a way to go in and eliminate that odor molecule scientifically, removing it from the environment and leaving behind nothing, just that smell of a fresh unit.

Jason: Mold, odor, does that cover the bulk of what you guys do? Is there is some other things that Green Home Solutions TrueEnviro will help with?

James: Yeah. We’re able to remove allergens, pathogens, mold, odor, bacteria. We're really able to help maintain and establish a healthy indoor environment. We have different services that we can offer. One of the things we're most excited about is our probiotic treatment and [...] machine. What that does is just flood an environment with healthy probiotics, creating the healthiest microbiome possible.

Jason: That sounds really interesting. I read this book called Eat Dirt. The author of this book was talking about the benefits of having healthy bacteria and how all these things that we do to try and kill bacteria, create an environment that doesn't allow for the healthy bacteria to remain, and even in environments that we might consider dirty or unsanitary like subway systems and things like this, there's this organic or this healthy biome that exist, that maintains this healthy stasis of bacteria. The bacteria is always going to be there, so if you can shift the balance towards healthier bacteria versus bad bacteria.

In the book, he even talks about literally not maybe eating dirt or different types of things that expose you to beneficial bacteria, or allow your kids to be exposed to bacteria in ways that your immune system can develop and stuff like this. This is a really interesting idea to spread probiotic. I haven't heard too much about that. I doubt there's too many property managers spraying pro bacterial sprayers, whatever, throughout a unit. What are the benefits of putting probiotic into a building or into a unit? How's that become a thing? I find that fascinating.

James: Good or bad, a bacteria is looking for a food source. If they have something to thrive on, it can swiftly take off. If you imagine for example the air ducts. The air ducts along any indoor [...] whether office or home, it’s really circulating good, bad, indifferent bacterias, particles throughout the home. If we can eliminate that food source that a bacteria will thrive on by flooding that environment with good probiotics, there's really no way that that bad bacteria whether it’s staph, MRSA, whatever it is, can thrive and really take off an environment.

This also means allergens, pet dander, all of these things are sources of food for good or bad bacteria. When something in an environment is completely overwhelmed with those healthy probiotics, there's really no chance for a bad bacteria or any sort of infection to take over the environment.

Jason: I would imagine one of the leading reasons why a tenant may end up not paying rent or suddenly is not able to pay rent might be due to illness, sickness, things that have affected their ability to work, and generate revenue. By having something like this in place, I would imagine that the property in general, I would imagine there would be some stats over time that would showcase the properties that have this treatment done if it works effectively, but they would then be in a situation which they had a lower sickness, or a lower turnover rate, or a higher instance in paying rent.

James: Yes, exactly. The other thing that people lose sight of is that a lot of odors are contributed to bacteria. If you think about that, a moldy sponge that sits on your sink, after a few days, that thing will start smelling. It’s due to the bacteria. Not only is it going to help create a healthier environment, but it’s going to cut down significantly on things that are lingering around.

Jason: Another interesting case that kind of connects to this just in my mind is, there's this major river in India. In India, people are just putting their waste material into that, they're putting all kinds of stuff, but the water is clean. It has this flora of bacteria that's so strong and powerful in it, it’s a good bacteria that it just feeds on any sewage, or soil, or any stuff that comes into it, and it's able to transmute it basically into something positive. People will travel from all over just to drink this water.

In India, they view this water as magical or amazing, because it's got this really strong flora of healthy bacteria. It’s fed constantly by waste and stuff that we would normally find would destroy water, but it's because the bacteria is able to convert that, and it converts it really quickly and effectively. I find that fascinating. We've covered the odor. We've covered the probiotic stuff that also can help with odor remediation, removing mold. Is there anything else that we're missing here?

James: No. That indoor environment, allergens, pathogens, those are all encompassed in that indoor environment. The products that we use are really what separates us from our competition. The mold remediation product is called Oceanic. It’s been fully vetted by the EPA. By fully vetted, I mean, they put this thing through 570 individual tests. Within 10 minutes, it killed every pathogen and fungi, mold being a fungi, earning an additional approval for usage in hospitals.

How safe is it? How effective is it? So much so that they will use it in a hospital. This product, we apply it as a bomb, on the surface and in the air and it will remove the mold and mold spores, not only from the surface, but within that air quality, and that’s the problem. Just because you see a mold and you cut out mold and remove it, doesn’t mean the mold is gone. It already put spores into the [...] and that it. What you can't see that is going to cause a problem, somebody gets sick or whatever the case may be. Now the property manager or landlord is dealing with the situation and really want to know about it.

Jason: Yeah, it makes sense. That’s this Oceanic product. That's part of why you're called Green Home Solutions. It sounds like these are all products that have been tested safe, they are largely green solutions that are friendly to the environment, and they're safe to be around humans and pets, correct?

James: Yes, that’s correct. The Oceanic is a plant-based enzyme, it’s catalytic in nature, it’s whole purpose in life is to kill mold source. The difference also is that you can go out and kill a mold source, but that can still cause an allergenic threat, or cause somebody to have an asthma attack. Our enzyme, what it actually does is breaks down the three protein layers that make up the mold source and break it down and leave behind a [...] thus removing that mold source completely from the environment imposing absolutely nobody any health concerns. That's really what separates us from our competition.

With that being said Jason, we're able to remove less building material. Just because something has mold, we’re not cutting it out. As long as it's not structurally compromised, we are going to clean in place, which means a tremendous savings. That’s really why people enjoy us. We’re green, safe for everybody that lives in the environment, and we're saving your home.

Jason: Right. There's nothing destructive about it and you're not having to replace as much. I love it. What are some of the main questions besides the safety of the product, besides what you guys do that potential clients have questions or concerns about, that we maybe haven’t covered?

James: Well, one of the concerns that we see is, we need to have testing. “I see it’s mold, you're telling me it’s mold, why do we have to do testing?” The testing is so important because we need to understand the scope of the job, how much of the air, if at all, has been affected? Without a firm understanding of that, we can't properly treat that environment, and do a clearance test saying, “It's clear to go [...]” the mold level is down to a healthy state and tenants are safe to be in that environment.

I cannot give you that guarantee without proper testing, done. It's really not worth it to cut the corner and say, “I'll skip the testing, just please take care of the mold.” We've got to do testing so we can provide the proper protocol and give every [...] that that environment is [...].

Jason: Alright, so part of what you do as part of your process is you'll test the before and you’ll test the after so that you can verify with confidence that there's a difference. Whether it goes to marketing or any sort of product or service that you're using, you want to be able to showcase or prove that there's been some sort of change, because that's why a product or service exists, it’s in order to impact some sort of change.

James: Yes. The testing, we’ll do pretesting. The conflict of interest to verify our work. We have a third party that does that, but we're not done until the test, the client’s test shows what [...] to show.

Jason: You don't even do the testing yourself. You use an independent third party to do the testing to verify the results and where they're at.

James: The post testing. We will do the pretesting. Use whoever you need to know for testing, but things you should consider, what protocol do they follow. I've seen people walk in with a petri dish and say, “We’re going to leave this here for a certain amount of hours and if it turns whatever color, you have mold.” Well, we’re [...] well of course it’s going to show whether there’s mold, what kind of mold are we dealing with? Is it a waterborne, watery mold, or is it just common mold spores that are out there right now that we are breathing in? That petri dish isn’t going to tell us something.

What protocol are you following and then who are you sending this to. Make sure that the lab’s accredited. Worst case scenarios, somebody ends up having to [...] and come to find out the lab wasn’t accredited at all and now we don’t really make a stand on it, if you will. Make sure that that lab is accredited. Make sure that the protocol is on point where it needs to be, and that will give you peace of mind that the job has been done perfectly.

Jason: Fantastic. Now you guys have a franchise location in California, you target the LA market, and maybe you're expanding out from there. How can people in that market get a hold of you and how can people get a hold of you if they're outside of that market. We've got listeners all over the US. How can they get in touch with the corporate entity?

James: We cover all of Southern California. If you're in Southern California, you can go to trueenviro.com and look us up. But for anybody anywhere in the country, go to greenhomesolutions.com, type in your zip code that you need [...] the proper channel so that it fits your assessment, you get your problem taken care of.

Jason: Awesome. James, thanks so much for coming on the show. I appreciate you sharing with everybody maybe a new perspective on dealing with mold, dealing with odor, and even adding healthy bacteria into the environment. I think it's been really interesting and I appreciate you being here.

James: I appreciate you and the opportunity, Jason. Thank you very much. I hope everyone has a great day.

Jason: Awesome. For every property manager that deals with order, you deal with these sort of situations, and you want to make sure that a property is safe and healthy, because you care about the families and the people that you're putting into these homes, then if you're in California you can check out trueenviro.com. If you are outside of Southern California, then you can go check out greenhomesolutions.com as James have mentioned.

Those of you that are new to the show, make sure that you subscribe if you're checking this out on YouTube or on iTunes. Make sure that you leave us a review. If you're listening on iTunes, we would love to get your feedback and hear what you think of the show. It helps us out and motivates us to do more and to provide this free service to you guys. Also make sure you get inside our community at doorgrowclub.com and check that out.

If it's been a while since you've had your website done, or tested, or since you focused on your marketing, you may want to just test your website out, go to doorgrow.com/quiz and test your website. This will help you see your website through my eyes a little bit more from a marketing perspective, whether it's effective at making you money and converting deals. You could potentially be missing out on tens of thousands of dollars in the future ROI every month from every deal that is being missed by your website not being effective. Check that out, test your website, and make sure to join our DoorGrowClub community full of awesome property management entrepreneurs. Apply to get in it, the group's free, but you can get to that at doorgrowclub.com. Bye everybody. I appreciate you tuning in. Until next time, to our mutual growth.

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Apr 2, 2019

If you own a company, then you probably have insurance to help protect you when something goes wrong. However, have you ever experienced shock and dismay when you submit a claim and have it denied because your insurance doesn’t cover it? You thought you were covered, but didn’t truly understand your insurance policy.

Today, I am talking with Vicky Methven about understanding your options when buying insurance. She helps clients understand risk on all levels: What they bought, why they are buying it, and what they actually need.

You'll Learn...

[03:04] Insurance has changed because business has changed; traditional go-to commercial general liability policy is mostly for brick-and-mortar businesses.
[03:57] Different types of insurance policies and how they are structured; beginning gives you a lot, middle takes most of it away, and end gives you back something.
[04:25] People don’t read their insurance policy; decide to tell agent what they need.
[04:50] Delivery of Insurance Policy: Agent’s obligation to explain it to you effectively because no policy covers everything.
[06:03] What you need vs. what you think you need vs. what an agent tries to sell you.
[07:26] Personal insurance policies are built on the law of large numbers; commercial insurance is based on many more variables.
[08:45] Licensed realtors must carry errors and omissions (E&O) insurance to pay a claim when they make a mistake or neglect to tell client about their policy.
[09:55] Vicky views cyber risk as biggest challenge for property owners; property owners don’t buy or believe it - they’re dealing with other problems.
[16:57] Crooks gone phishing for plethora of data by hacking companies of all sizes.
[22:23] Don’t let professional actions negatively impact personal life; make sure you’re doing everything legally necessary to keep protections in place.
[23:42] Property managers need to put basics in place; may include general liability, lawsuit protection, E&O insurance, cyber policy, and a good lawyer.
[27:50] Every entity should be separate; avoid one business assuming risk of other one.
[30:39] Potential pitfalls in property management industry include master policies.

Tweetables

Talk about risk on all levels.

Policy: Beginning gives you a lot, middle takes most of it, and end gives you back something.

Delivery of Insurance Policy: Agent’s obligation to not only give you the policy, but explain it to you.

Insurance policies are built on the law of large numbers.

Resources

Methven Agency

Vicky Methven’s Email

Vicky Methven on Facebook

Equifax Data Breach

Yesterday’s mass-login attack on Basecamp is another reminder to protect yourself

Have I Been Prwned?

INSUREtrust

Hiscox

DoorGrowClub Facebook Group