At this point in the year, it’s still early enough to make some plans to level up your property management business. One of the best ways to learn new strategies is by masterminding with other professionals. In this episode, property management growth experts Jason and Sarah Hull talk about the importance of strategic time as a business owner as well as some upcoming events for property management entrepreneurs. You’ll Learn [02:06] The concept of your default future [06:43] The four reasons for having a business [10:26] 2024 events for property managers [16:51] Why masterminding matters [19:44] The ultimate event for property management entrepreneurs Tweetables “If you're working with any business, they should be helping you change your future outcomes.” “Worse is still different, but not probably the change we were hoping for.” “I never want to be the smartest person in the room. If I am, that means I'm in the wrong room.” “They say you're the sum of the five people that you are around the most or something like that, but I think your business will be the sum of the five property managers are the most connected to.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: They say you're the sum of the five people that you are around the most or something like that, but I think your business will be the sum of the five property managers are the most connected to and to be connected in our mastermind to other mastermind members  [00:00:13] Welcome DoorGrowers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you are open to doing things a bit differently, then you are a DoorGrower. DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many real estate think you're crazy for doing it you think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow we are on a mission to transform property management business owners and their businesses. [00:00:53] We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. We're your hosts, property management growth experts, Jason Hull and Sarah Hull, the owners of DoorGrow. Now let's get into the show. All right. [00:01:11] So before this show, we were talking about what we should be talking about in today's episode. So what are we going to talk about today?  [00:01:18] Sarah: We will talk about getting ready for your 2024 and prepping, getting your schedule ready for some events that we've got coming up. [00:01:27] Jason: Okay. It is January 26. January 2nd. Sorry. I don't know why I said that January 2nd. What's wrong with you? I don't know. I don't know. I think I saw the clock. All right, so it's January 2nd The new year has just started. This episode will probably come out on the main podcast a little bit later, but we wanted to kick things off for the new year. [00:01:49] Make sure that everybody gets in momentum. I think 2024 is going to be a wild year. Every election year is. It's going to be interesting. So let's talk about your property management business, how you can get more of what you want and grow. So let's talk about some of the stuff coming up. All right. Where should we start? [00:02:06] Sarah: Let's first start about talking about what did your 2023 look like? Was it what you wanted it to look like? Was it maybe a little different where there's some curve balls that came at you in the middle of the year and threw the whole plan that you had off balance and if so, what are you going to do differently in 2024? [00:02:26] So if you change nothing, if you do nothing different, your 2024 will look probably pretty similar to your 2023 if not worse because the market is totally different, at least part of 2023. The market was good. The real estate market was pretty decent. It's not so decent right now. It's a little bit cooler. [00:02:45] In fact, we're really close to it flipping over to a buyer's market.  [00:02:49] Jason: Okay. And for those of you listening, I think you'll really enjoy this concept. This is one of my favorite closes when it comes to converting people into clients or customers. And we call it the default future versus created future close. So it's important to take a look at your default future is. What you're going to get in the next year, and you can easily base it on what you did the last year and the year before that, and the year before that, you should have a pretty good idea of what your default future looks like. And if you're working with any business, they should be helping you change your future outcomes, right? They should be helping you improve your future. So for you selling to your clients, they should have a default future if they continue to DIY, do it themselves, manage their own property, work with the crappy property manager they've got now, whatever their current future is. [00:03:36] They should have a different created future if they're working with you and you need to help them see a different alternate future reality that includes you. So we run into people all the time that have had a very uncomfortable default future in property management. They have not grown for the last sometimes 10 years. [00:03:55] They've struggled. We have a client we just got on. He's been around 50 units for a decade. So that means it's a grind. That means there's a lot of churn, losing a lot of customers while you're adding customers and you're just not growing, right? Some of y'all are down in doors because I've heard the excuse of the pandemic or people, a bunch of my clients sold or whatever. [00:04:15] So a lot of you might be down in doors. And so your current future, default future looks even worse than last year or the year before, right? So we want to shift you towards a created future. Yeah, so how do we do that. Okay you do that with DoorGrow, right? So we are really good at helping create a different alternate reality for you a different future That includes us. [00:04:39] And because we've been able to coach and support so many, like hundreds of property management, business owners, we have tactics strategies that we've developed over time that we're always. Honing, improving, figuring out that have allowed us to increase our client's door count, make their operations smoother, improve their team, lower the entrepreneur's pressure and noise, decrease their stress, make the business more fun so they feel like they're more of a business owner. [00:05:07] And so these are the things that we do. At door girl. All right. And we've got a bunch of events that we do throughout the year that help to facilitate our vision in helping transform property management business owners and their businesses.  [00:05:20] Sarah: Now is a really good time to plan out "what do I want my year to look like this year? Do I want it to look like more of the same? Or do I want it to look different, but positively different" because it can still look different, just maybe worse. Worse is still different, but not probably the change we were hoping for. Yeah. So if you want your business and your life and your income and your team and your day to improve, then you may need to just be open to doing things a little bit differently than you have before. [00:05:52] And I think being that we're at the beginning of the year, this is a really good time to set some time aside for you. Set some time aside to make sure that you're prioritizing the things that you really want to get out of the business or out of your life. And how do we do that? There's a few events that we have coming up throughout the year. [00:06:12] You can find all of our events, all of the details on doorgrow.com/events. And that will show you our event calendar. What event, who it's for, what the cost is, where it's located, the dates, all of that kind of information is on there. And if you go all the way to the bottom, there's a quick little video I recorded with even more details. [00:06:34] So you can watch the whole thing. It's only a couple minutes long, or you can skip to the part that talks about the event you're interested in.  [00:06:41] Jason: Okay, cool. So for this new year, I would like to recap the four reasons, because I think. It's important to take a step back and assess your business through the lens of these four things. [00:06:55] We have a fifth reason, so maybe the five, but we want to take a look at your business through this lens and make sure you're actually headed in the right direction. Because it's very possible to be making more and more money in your business and become more and more miserable. And that's not the goal. [00:07:09] We didn't start businesses to become more miserable. We thought we started them to make more money, but what we really want is what more money can give us, right? We're hoping more money can give us more, number one, fulfillment. We get to spend more of our time doing the things we enjoy doing. More and more freedom. [00:07:24] We feel free. We don't feel trapped. We don't feel stuck. We don't feel like we're controlled. We don't feel like our business runs us. We don't feel like a slave or servant to our business. We feel free, right? Freedom. The third reason is Contribution. So if we have freedom and fulfillment, usually then we want to make a difference to others, right? [00:07:44] We want to benefit other people too. It's just innate I think in entrepreneurs, we want to change the world. We want to make it a better place. We want to improve things. We see problems and we're like, "I can make money solving that problem, right? That's contribution. That means making a difference to your family, to your team, to your clients, to everybody that you can have impact with and so contribution, I think, is one of the greatest gifts we can give ourselves. It feels really good to benefit others. And then the fourth reason is support. It's really difficult to have fulfillment, freedom, contribution if we don't have a team because then we end up doing and wearing all the hats that we don't want to wear and we should only be wearing the hats. Eventually, if we had the ultimate business, it gives us the ultimate level of fulfillment and freedom. Then we are only spending our time wearing the hats that we most enjoy wearing, which would mean we have a really good team that supports us and they enjoy wearing the hats that they're wearing and they take those off of our plates. [00:08:41] So we don't have to wear those hats. And so those are the four reasons. Now there is a fifth reason, and this is important to recognize. This is what your team members want more than the four reasons, typically. This is what your clients want often more than the four reasons... they want safety and certainty. [00:08:58] They want peace of mind. And so this is why a lot of people are willing to give up fulfillment, freedom, even contribution. They're willing to give those up and trade them in order to have safety and certainty. This is why they will go get a job. This is why they want to do what they're told to by maybe the media at times, right? [00:09:17] They want to be safe and entrepreneurs were a little bit, we're wired a little bit differently. We care more about having our freedom than safety and certainty, but we also want that too. And so having our business built out in a way that gives us all five of those things gives us the ultimate business and it allows us then to make a real impact and to have a really good team and to have less stress. [00:09:39] And so this is our primary goal with DoorGrow is to move you towards that. So take inventory. How do you feel you rate on each of these five areas right now? Do you feel you have safety and certainty? Do you feel like you have support and a really great team? You really feel supported in your business? [00:09:54] Do you feel like you've got freedom and fulfillment? You get to do the things that you really want to do. You're really enjoying your day today. You feel like you're making a difference out there and contributing in the best way. If you don't have those things, even though you have a bunch of money coming in or a lot of doors, you built the wrong business. [00:10:11] And it doesn't mean you need to change businesses or industries. It just means you need to change what your role is in that business. So 2024, let's move you towards more towards the four reasons. All right. So should we talk about some of the events we have coming up? Yeah, let's do it.  [00:10:26] Sarah: Let's talk about the events scheduled for 2024. [00:10:29] By the time this airs, it'll still be early in the year. So you should be able to mark your calendars for the things that sound interesting to you and make sure that you prioritize your business so that you are set up for success so that you are able to grow so that you are able to get more of the day to day stuff that you just don't enjoy the stuff that bogs you down off of your plate because this is not the life that you need to live, but it's really common for property managers, so make sure that you prioritize this stuff. [00:10:59] So let's talk about some of the events that we've got coming up this year. What's first? Okay. The first thing we have, this is for our clients only. It's in January this month now. And that is open to all of our current mastermind clients. We're going to San Diego, California. So these type of events if you join the DoorGrow Mastermind, you'll have access to them. [00:11:20] So what our tribe events are. They're usually smaller events. They're not huge with, like 100 people or more. They're smaller, more intimate events. So if you're a little bit more on the introverted side, then this event might be really good for you because you get to create close connections with people. [00:11:39] So Jason and I attend these events as well as some of our clients. So you'll get to network and spend some time with other property management business owners. And what we'll be doing, this event, we do a little bit of business and a little bit of fun. So we have some activities planned out there for the day and either before lunch or at lunch or probably both because that's what happened last time is we're going to be, talking shop, talking business, what's working, what's not working, what's your plan? [00:12:07] What are you working on? How can we help support you in that? So that's our first one.  [00:12:11] Jason: Okay, cool. Now we have some other things happening in January. [00:12:13] I'll just throw out there. If you're hearing this later and you miss this stuff, we might have recordings that you might be able to get access to if it's one of our public things. But make sure that you stay connected to us, follow us and are connected to us on social media or you're inside our Facebook group at doorgrowclub. com where we broadcast this and stream it live so that you don't miss out each week. January 11th in a week, we are going to do with our clients a jumpstart 2024 call on zoom where you can 10x your year. And we're going to talk about 10xing your growth in your property management business. [00:12:47] What's next? [00:12:48] Sarah: Okay. So the next event that's coming up will be open to everyone So if you're currently in our mastermind or not yet in our mastermind, or you were formerly in the mastermind, this will be open to everyone. We have our boardroom event that's coming up March 13th and 14th. It will be in Round Rock, Texas, which is just north of Austin. [00:13:10] And that event, we actually launched a lot of these events for the first time last year in 2023. We've had some success with them. Clients really enjoy these style of events, so we carried them on into this year. So the boardroom event, it is a smaller event. We will probably limit it to about six clients, like six businesses total. [00:13:35] For that reason, because we really want to be able to go deep. If the event gets too big, then we have to stay granular and more topical and this event, we call it boardroom because we sit on each other's boards, it's a two day event. And what we'll do is we'll really get in and we'll like tinker with your business and see, where are you spending your time? [00:13:55] What does your team look like, what does your profit margin look like? What does your revenue look like? Where are you struggling? Where are you succeeding? So we really get in and we go deep with clients on the smaller style events. So spots will be limited. If you're interested in attending any of our events or getting more information, just go to doorgrow.com/events. [00:14:15] All of the information is there.  [00:14:17] Jason: Yeah. The last boardroom room event that we did was pretty awesome. So everybody walked away with a really solid set of clarity and to do items to take their business to the next level. And what was interesting is, a lot of them were really stuck and couldn't see where they needed to go next. [00:14:34] And so this allows us the opportunity to really go deep with the business owners. And so they get a lot of value from this.  [00:14:40] Sarah: So that one is coming up March 13th and 14th. It will be in round rock, which is like North Austin here in Texas. That one is very focused on business. So we do break for lunch. [00:14:52] We do go for dinner. But it's boardroom style events. So we're in session almost all day. It goes from about nine to five  [00:14:59] Jason: is serious stuff. All right  [00:15:01] Sarah: Yes, cool. All right, then this one personally is my favorite is our premium mastermind events we also launched that last year for the first time and This one for me, it's just so fun because it mixes the two things that I love, which is business and travel. [00:15:16] I'm like all about both of these things. So if you're looking for an event that allows you to travel, do something fun, explore the area and really dive into your business in that same depth that we offer in the boardroom, then this event will be for you. So this we do reserve for our current and former mastermind clients only. [00:15:38] It's not open to everyone. But what we do is we get a luxury Airbnb or rental of some sort and we will rotate where they're held. This one that's coming up, it's April 9th and 10th. It will be in Bentonville, Arkansas. Very random spot, but the home is beautiful and it's huge. So we'll do some fun stuff in the area. [00:16:01] What we do, it's about a day and a half event. So we come in, we'll do a mastermind during the day, and then at night we spend some time just, hanging out at the property and getting to know each other and really connecting. It was really interesting because we did this last year in April, and then in May, we had our DoorGrowLive and the clients that attended our premium mastermind, oddly enough, they all also attended our DoorGrowLive, they were like their own little group of people because you just know each other so well, like you've spent time with each other. You really get to know each other's businesses and like business model and what are they doing and what are they all about? [00:16:39] So it was like so worth it for me. And it was amazing to see that at our DoorGrowLive. So if you are a current or former mastermind client, then. This might be a really great event for you.  [00:16:51] Jason: Yeah. These are super fun. It's more of a more personal, more of an intimate setting. [00:16:56] We're hanging out together in the same house. And so the conversations are just, they're just really great. And this allows you to create some relationships and friendships. They say you're the sum of the five people that you are around the most or something like that, but I think your business will be the sum of the five property managers are the most connected to and to be connected in our mastermind to other mastermind members and our mastermind members are different. They're just different than the typical NARPM crowd or the typical crowd of people that are involved in property management. They like love what they get to do and they've shifted more towards the four reasons. They have a much healthier mindset because we've installed a lot of mindset things. This is why we want to bring mastermind clients to these, they're just a different crowd and being able to hang out with other people that are playing a similar game that have a similar mindset is just like next level. [00:17:45] And so the relationships that are created, I think will last a lifetime, which is really awesome.  [00:17:50] Sarah: And I think that's a really good point is there's a lot to be said about who's in your circle and, who you're spending time with. So if your circle is doing things that are either similar or if they're even a step ahead of you, that's fantastic. [00:18:06] You're in the right circle. So I never want to be the smartest person in the room. If I am that means I'm in the wrong room.  [00:18:12] Jason: I like being the smartest person in the room sometimes, but not all the time  [00:18:15] Sarah: No, it's like when we run the events, yeah. I'm talking about when we attend.  [00:18:19] Jason: Yeah, we invest a lot. [00:18:20] We invest a lot And we're a part of groups and have mentors that are like beyond where we're at here at DoorGrow. And being able to create that for clients and facilitate that, is really awesome. We love being able to experience that as well. So great leaders, I think are also great followers. [00:18:36] And I think that's why we're able to deliver so much to our clients is because we go join programs and events and do things like this, where we're the student, where we're learning, where we're connecting with people, where we're masterminding, we want to bring the same value to those that we serve. [00:18:49] So we've gotten really great benefits. We've done some really cool trips, different places, hang out with other entrepreneurs, and we always get a lot out of it. Even when I don't think I'm going to, I'm like "it might be fun." But then it like, sometimes it's changed my life. It's been really impactful. [00:19:04] All right.  [00:19:05] Sarah: Next, we've got our DoorGrow Live. Okay. And as an added kicker this year, if you are a current mastermind client in our super system tier you get your own special event. Yay, so we're tacking it on right before DoorGrowLive, that way it's not additional travel, it's not really like hard to do, it's just gonna mash in with DoorGrowLive, so it will be the day before DoorGrowLive, which is, I believe it's a Thursday, it's May 16th, this is for our current SuperSystem clients only, we will be diving into all things SuperSystem, all things operations at this event. [00:19:41] Jason: Okay. So now DoorGrowLive. The DoorGrowLive is our ultimate event. This is where we get everybody to go, clients, non clients. It's our biggest event of the year. This is fun, interesting. We've got speakers, there's lots of interaction. We've got a lot of fun stuff going on. So this is going to be at the Kalahari Resort in Round Rock, Texas, which is the North Austin area. And it's a super cool resort has a huge indoor water park. It has a bunch of restaurants.  [00:20:11] Sarah: It is Friday and Saturday. It's May 17th and 18th. This is open to everyone. So whether you are a current, former, it doesn't matter. You are never in our mastermind, never a client at all. [00:20:21] Does not matter. It's open to everyone. This is our big event of the year. So we bring in a bunch of different property managers. We bring in some vendors, we bring in some speakers, like it's a two day event. And we're holding it in again, North Austin. So Round Rock, Texas. And the resort is really, it's really great. [00:20:43] It's very nice. The rooms are nice. They have plenty of restaurants to choose from. We did our DoorGrowLive last year there, and we liked it so much. We decided to go back.  [00:20:54] Jason: Yeah. Some venues treat you really well and some treat you really not well. And this one was really good. We really liked it. [00:21:00] Yeah, so make sure you get tickets to DoorGrow live. If you're wanting to just initially put your foot in the toe in the water to see what is it like around the DoorGrow culture? What is it like around DoorGrowers? What is it like around people that are involved in their ecosystem? This would be a great way to decide whether or not you should be spending a whole bunch of money with DoorGrow, right? [00:21:22] Is come hang out at DoorGrow live and see the magic that's going on and learn about the DoorGrow code, learn about people that are scaling up, talk to people that have their different lanyard colors with their different belt levels. Like we've got a whole program of ascension and, just like in martial arts, and so come check it out. [00:21:40] It really is a different thing. This is not your usual conference. Let's say it like that. This is like the ultimate conference We've decided like we want to make these the best that we can make them. So sometimes NARPM events are okay and sometimes NARPM events... maybe they're not. Some of them though, we like we've even had clients say well on some of them our event and NARPM event were right at the same time and they said "there's no way I would skip DoorGrowLive to go to a NARPM But what we've done is we've done everything that we could to make these conferences, the best conferences ever for property managers. [00:22:16] Sarah: There's a lot that goes into it like every little detail that we put into it, we really try to make sure that this is so beneficial and it's the big event of the year. It's open to everyone. So if you're thinking, "Hey I don't know what event I should go to," this would be a really good one to go to because it's so big and there's just so much that goes into it. [00:22:36] You'll get a lot out of it and it's not the boring conference that you're going to go and sit and fall asleep. And go, "Oh God, is it lunch yet. Can I go home now?" It's not like that at all. It's very exciting. There's a lot going on and we always provide really good opportunities to meet and talk with other people too. [00:22:55] So it's not just like you're in session all day long. There's a lot of opportunities to network with other property management business owners.  [00:23:02] Jason: Yeah we actively try to facilitate that because we know that that's one of the biggest benefits we've gotten from going to events. It's just the connections that we actively facilitate that. [00:23:11] I think what makes, the DoorGrowLive events stand out is that it's a bit more holistic. We're not just focused only on property management. We're focused on improving you and your life and focusing on entrepreneurship, focusing on taking things to the next level. So people get a lot out of it and it really can be life changing instead of just business changing.  [00:23:30] Sarah: So that's our big one. Now, if you like vacation style events, this one is a newer one. So we're testing this out this year. This is going to be our first one ever it's DoorGrow retreat. Yeah, so this will mix a little bit of business and lots of vacation style. [00:23:47] So this is open to your family to your kids to your spouse, whomever wants to join you and let it be like a business trip on a tax write off for sure So we will still do some business stuff and it's vacation style event, and that is going to be July 17th through 21st. And it will be in Punta de Mita in Mexico. [00:24:10] Yay. Super excited. So you will need a passport.  [00:24:12] Jason: Get those passports ready. Get them now. We're going to mexico. So yeah, and this is gonna be a nice resort.  [00:24:19] Sarah: Oh, it's yeah, it's very nice.  [00:24:21] Jason: We go to nice places. All right. Yeah. Cool. A little picky. All right. All right.  [00:24:25] Sarah: Then, second half of the year, we just mirror what we do the first half of the year. So for a lot of things, not for everything, but for a lot of them, we like to have a spring session and a fall session. [00:24:35] So our tribe meetup, we do two per year, one in January and then one in September. And again, this is for our current mastermind clients only. It will be September 11th will be our next in person tribe meetup location to be announced. Why? Because if you're a mastermind member, you guys get to submit your ideas and vote on it. [00:24:52] Then we have another premium mastermind event. So again, spring session, fall session, our fall session will be October 22nd and 23rd. This is open for our current and former mastermind clients. Only this one will be in Water Sound, Florida. We've got a really nice place there lined up. And then boardroom. So again, spring session, fall session. Our fall session will be November 20th and 21st, and we'll hold that here in round rock, Texas. Those are our events that we've got coming up. I'm super excited for all of them.  [00:25:21] Jason: Yeah. I don't know that we've ever talked about all the different events and there's a lot of virtual events and online things we do for our mastermind members as well, besides all of this. [00:25:29] And we've never really talked about this. I don't think as much on the podcast. So I'm sure there's people listening. They're like, "Oh, I didn't realize DoorGrow did all this stuff or had all this stuff going on." We've got a lot going on. Yeah. In fact, one of the consistent pieces of feedback we get from Mastermind members is, "wow, there's a lot." [00:25:44] There is a lot. It can be a little overwhelming in the beginning. So we really hold people's hand to make sure they can navigate everything in DoorGrow Academy, all of our events, all the online classes, everything that we've got going on to make sure that it is geared towards what they need most and they don't get distracted by all the shiny objects everywhere. [00:26:02] So it's important. But if you're interested in any of this. You're interested in coming and jumping into the DoorGrow ecosystem. We have plenty of free trainings we would love to throw at you based on what your current challenges are, so you can get an idea of how we can support you, how we can help you. We've got a lot of case studies and testimonials. [00:26:18] I think over a hundred now on our playlist on YouTube of our case studies you can check out. See if you can trust these DoorGrow people. And once you're beyond the paywall and you're in with our clients, you'll get it. It's pretty awesome. But between now and then, feel free to join our Facebook group, which I mentioned earlier, go to DoorGrowClub.com and you get access to our podcast live. You get access to our masterclasses that we promote. That are free, you get access to a lot of really cool stuff and we've got a bunch of stuff, cool stuff in the file section there as well. It's available.  [00:26:51] It's a great online community. And if you join it and you have to put in your email address, answer the questions and if we give you access, it's for property management business owners. We reject 70 percent of applicants. So it's a little bit exclusive, which makes it really cool. But if we give you access, you'll also get five emails that are sent to you. Like a fee Bible we're gonna send you gifts, we're gonna send you some free stuff.  [00:27:15] I think we've covered all the events. Sarah's always coming up with more ideas, so there might be more stuff that we're going to be doing. [00:27:21] But yes, this is a pretty good overview.  [00:27:22] Sarah: If you can give me the opportunity to travel, I'm probably going to take it.  [00:27:25] Jason: She'll add it to the program for sure. All right. All right. So we appreciate everybody hanging out with us. We hope that this has opened your eyes a little bit to some of the cool stuff that's going on in DoorGrow, inspiring you to get plugged into our ecosystem. [00:27:37] And we are all about helping property management business owners take their business to the next level and grow. And until next time to our mutual growth. Bye everyone. [00:27:46] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:28:12] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Tax season is upon us. Every property management business owner knows the struggle of trying to navigate IRS regulations each year and find the best outcome. In this episode, property management growth experts Jason and Sarah Hull sit down with Mo Hussein with Balanced Asset Solutions. You’ll Learn [02:05] Talking tax code and regulations [10:02] Why you need an accounting tool/software [18:38] Reducing your tax liability [23:21] Writing off education costs [26:24] A few more tips for the road Tweetables “The experts are worth a lot more to me than software.” “You're going to pay for everything in business, whether it's going to be in time or in cash.” “If a handyman shows up with only a multi tool instead of a toolbox to do a job, the property manager is probably not going to call that guy back.” “There's certainly a wrong way to do taxes, but there isn't a right way or one way to submit your taxes.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Mo: I think what's most important is having a single source of accounting truth I think that's probably what one of the biggest things that a lot of businesses struggle with, especially when it comes to tax season.  [00:00:10] Jason: Welcome doorGrowers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives, and you are interested in growing a business and life, and you're open to doing things a bit differently, then you are a DoorGrower. DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners, and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win. We're your hosts property management, growth experts, Jason Hall and Sarah Hall, the owners of DoorGrow. Now let's get into the show. All right.  [00:01:08] And today we have Mo Hussain back on the show. What's up Mo? [00:01:12] Mo: Hey, doing well. Pleasure to be here.  [00:01:15] Jason: So we're going to be chatting a bit about tax strategies today. Yes. All right, cool. So let's dig into this. This is something that is near and dear to Sarah's heart, which is super weird.  [00:01:25] Sarah: I hate paying taxes. Fun fact, I don't want to give more of my money away if I don't have to. [00:01:31] Jason: I know if I see something on Instagram about a tax strategy, I should just send it to her and she'll find it interesting. Like she just gets into this stuff. So Mo, what do you got for us today?  [00:01:42] Mo: Yeah. Sarah, you are definitely probably the first person I've come across that has actually made a comment that you actually love going through this entire process. [00:01:50] Taxes is one of those things that, there's a saying, there's two things guaranteed in life, death and taxes.  [00:01:55] Jason: And I'm trying to avoid both. So how do we avoid some of the tax?  [00:01:59] Mo: I don't know if we can help with the death part. Maybe over time.  [00:02:01] Jason: We'll probably all be somewhat avoid some of the death maybe. [00:02:05] Mo: Unfortunately, the tax code is very thick. It's honestly created an entire industry of professionals like myself and other CPA firms that are specifically just dedicated to decoding it and maximizing savings with our clients and with taxpayers in general, there's, there's a litany of information that's on the IRS website. [00:02:22] It's very difficult to parse through and and there's also consistent changes that are happening each year. I think probably the biggest changes that are happening this year that a lot of property managers are being impacted by is the new 1099 filings and the IRS portal. Prior to 2023, you'd be able to file your 1099s via paper as of 2023 now, for any filers that are filing more than 10 returns, those have to be filed electronically on the IRS has created the iris. The IRS has created this new portal called the IRIS and allows for you to be able to submit your 1099s electronically. And there's some changes that have happened between the fire system that a lot of folks were using before and the new IRIS system, of course, making things more and more, more, more complex as usual. [00:03:07] Jason: Got it. Why would they make anything easy? Yeah, it's definitely not the goal to be audited next year. Now, it seems when it comes to tax strategies, you've got every everything ranging from across the spectrum from risky, maybe not even actually viable strategies all the way to really safe and conservative. [00:03:31] And some will save you a lot more on taxes on the risky side, going towards more conservative. How do you balance this?  [00:03:39] Mo: Good question. Medium. Good question. The interesting thing is although our CPA firm will file taxes on behalf of our clients. And there'll be another CPA firm maybe the client was working with before that filed taxes the year before. And maybe even though the deductions or maybe other things haven't changed significantly the return and the actual filing and the composition of it is different. And but it doesn't necessarily mean 1 way to do it is wrong than another way. There's a lot of different strategies, especially when it comes to things like depreciating assets and taking advantage, for example, of a bonus depreciation. [00:04:12] And just give you some context, bonus depreciation was a tax incentive that was enacted by Congress and in 2002 and it basically allows for accelerated business tax deduction on a large asset over an accelerated period of time versus over the duration or the lifetime of the actual asset. [00:04:30] Real estate is a great example of that. In 2023, you have bonus depreciation of up to 80 percent that can be taken advantage of, and then it drops to 60 percent in 2024, 40.25%, 26%, and 0% thereafter. However, a lot of these deductions, you may not want to take advantage of depending on where your revenues are at, so you can actually minimize your tax liability. [00:04:53] And so there's a lot of strategy around in different ways that a tax account or CPA will file your tax. And so that's where we see the variation what you mentioned about risky. There's certainly a wrong way to do taxes, but there isn't a right way or 1 way to submit your taxes. [00:05:09] And that's why you see a lot of different tax accounts and CPAs have different ways and strategies of submitting their clients' taxes.  [00:05:15] Jason: Okay. All right. What are some things that property managers should be paying attention to this time of year here at year end? Yeah. Max this out. [00:05:24] Mo: Yeah. All right. One thing that we always urge our clients is the tax season shouldn't be an annual kind of activity or flurry at the end of the year, but a lot of folks wind up doing is nobody really thinks about taxes until after the new year and it's February and you're looking at March and April when the tax deadline is due for both your business and your personal taxes. [00:05:44] And honestly, that isn't the best time that you should be thinking about it. You should be thinking about it throughout the duration of the year. You should have some accounting system that's keeping track of all your expenses with the path act that got enacted in 2015, real estate agents and brokers have some additional relief when it comes to business related purchases that got that made changes to the IRS section I believe 179 deduction. And for example. In the tax year 2023, you can expense or write off up to $28,900 of the price of a new car for the tax year in which you bought it another certain limits of the type of vehicle that qualifies for this tax break. However, these limits are part of allowable deductions. [00:06:21] And if you're thinking about your taxes throughout the year, certain decisions that you'll make about acquisitions or things that you may be purchasing for the business may make a material impact at the end of the year on kind of your tax implications. And it's important to keep a log of all your receipts, expenses and everything throughout the year. [00:06:37] A lot of times when clients wait until February to start putting together all the prep work and the receipts and everything for their expenses, a lot of times you'll miss things and we always suggest you should take your time and file an accurate return. Versus just trying to be beat the deadline and not get hit with a potential fine you have in April when the taxes are due, but you can always file for an extension. And if there is a tax liability that's assessed, there will be interest that will be accrued during that period of time. But again, it's better to be accurate and maximize your deductions versus being in a hurry. [00:07:08] Sarah: Got it. Are there any deductions or obvious tech strategies that you would recommend for property managers or real estate agents in general?  [00:07:18] Mo: Yeah great question. Some of the most common types of deductions for agents and brokers and property managers are marketing expenses, such as sales, open house signs, flyers, web development, business cards, mailers. [00:07:31] If you're leveraging a service, like DoorGrow, just consider real estate coaching and training. Those are considered education cost. Licensing and renewal fees. Things like association dues for MLSes, brokerage desk fees, any type of transportation kind of expenses, whether it be automobile maintenance or repairs, gas, mileage, travel, home office expenses, and even gifts, although there is a limit on gifts of a 25 dollar deduction for per client per year, and so there's a lot of different things that you can deduct. And a lot of times what happens is, you may be a broker or a property manager that's going to show a property and you need to go buy some flyers or handful flyers or something like there's some type of piece of marketing collateral. [00:08:13] And so you may go to FedEx and just use your credit card. And although at the time, it's registering in your head, that may be something that you forget to enter into the accounting system later. And so you're not leveraging that and as an actual viable business deduction. [00:08:26] And so this is why it's important that you're logging kind of your accounting activity and have a easy system to use something to use that's on the go as well. So you can easily kind of catalog and log these expenses. All these minor costs add up over time. And, you need to make accounts so you can maximize your deductions here. [00:08:43] Okay.  [00:08:43] Jason: What do you think is the easiest system to use?  [00:08:46] Mo: To stay away from words of easiest system or things like that, because it's very subjective, right? It's, we're all creatures of kind of habit. And some folks are tethered to their phones and are okay with using a litany of different applications. [00:08:57] A lot of our clients will use kind of QuickBooks for their management system, and for their to manage the kind of their corporate books, there is a mobile app can easily log things as you're going. You can connect that directly to your bank account and your credit card. And so as transactions occur, you can make sure that those are logged correctly. [00:09:13] I would say that, having a system that has an integration to whatever banking and credit cards that you're using and reconciling that account on a monthly basis to ensure that you're logging all the transaction. And then also keep in mind in scenarios where you're paying out of pocket for something or loaning something to the business, even though you may be the sole owner and want to take advantage of those. [00:09:33] There's a lot of different pieces of software that are out there that can help with that. We usually suggest for clients is, if you're already using some type of a property management and accounting system to manage your business, let's say Appfolio, there is a way to also manage your corporate books. [00:09:45] A lot of these property based accounting systems also have the ability to manage your corporate books. And it's not only specifically for real estate. They're an accounting system at the end of the day. And you can just create kind of things like a fictitious property labeled your corporate business and run all your financials and keep track of your finances that way. [00:10:02] Sarah: Now would be a really good time to send a reminder to property managers that your property management software is probably not the best software to do your internal accounting. So a lot of times clients are like, "Oh yeah, I have software for that. I use Rent Manager or Appfolio or Buildium. And that's fantastic to manage your client's accounts, but it's not the best system to like internally manage your accounting, it's not going to have the same functionality as something like QuickBooks would.  [00:10:36] Jason: But you're saying some that's what they do. [00:10:39] They use a lot. That's what they do.  [00:10:41] Mo: What I'm saying is that so these accounting systems. So the main difference. So if you think about something like a QuickBooks, it's a general accounting system. So it's meant for any business. The chart of accounts is very malleable, if you will, something like property based accounting system there is no such thing as like a business. There's a property, there's tenants, there's owners, there's vendors. Now, you can finagle or manipulate and come up with work around so that you can manage your books there. However, you'll have kind of an entire different chart of accounts for your corporate business, which would be different than, what shows up on the financial owners. [00:11:13] And so there's a trade off. You can use another system that's maybe tailored specifically to your business, like a QuickBooks and you have the flexibility of things like integrating credit cards and stuff, which is a nuance when you come to property based accounting systems. But then you have to manage 2 different platforms, or you can figure out some work arounds and try to manage and keep track of your financials in 1 of these property based accounting systems. [00:11:35] But then have to keep in mind about some of these work arounds, like reconciling, like a credit card, which isn't the same thing as reconciling like a bank account. But. So there are trade offs. But I think what's most important is, what we say having a single source of accounting truth I think that's probably what one of the biggest things that a lot of businesses struggle with, especially when it comes to tax season. Is that. " Oh, I have a bunch of receipts and stuff that are in my inbox. I have some screenshots on my iPhone. I have, this random Google Drive folder with other information. I need to call Sally, who's my, maintenance supervisor or whatever about some other transactions and stuff," and there isn't a single place of accounting truth. And having that will definitely save a lot of time, especially when it comes to prep.  [00:12:15] Jason: I would think that grown up property managers are probably at least using something like QuickBooks because at some point they really should be on the NARPM standard accounting, standard of accounting chart of accounts. There's just some advantages. [00:12:29] Especially if they're wanting to exit that business someday, having clean books that are not commingled with your client's stuff inside Appfolio, for example, would make your business a lot more appealing and you'd probably fetch a prettier penny.  [00:12:44] Sarah: And I think a lot of times people think, "Oh this is an accounting software because it does all of the accounting for my clients." [00:12:50] And there are differences for sure between how your PM software and how something like QuickBooks doesn't have to be QuickBooks, but we use QuickBooks. I like it and I can use it and I don't like technology. So something like QuickBooks functions, there are differences. And the other thing to keep in mind is if you have a team and your team has access to your property management software and you're putting all of your bookkeeping and accounting and financial data in there, your team has access to it and you may or may not want that. Some people might be very open and they have an open books policy and they don't care at all. [00:13:30] Some people, they hear that idea and they go, "there is no way I would do that." So if you're one of these people who's using your property management software as your own internal accounting system, you might want to think about doing that maybe a little differently.  [00:13:44] Jason: I think this is where there's a challenge in business and in this industry that a lot of business owners don't recognize the differentiator between all these systems that you need in order to run a business. [00:13:55] You definitely need something like Property Ware, Appfolio, Buildium and Rent Manager, Rent Vine, whatever as a back office. And as a billing system as the main system for getting paid basically, and then you need an accounting and financial system. And those are different, the accounting and financial system, you need a system for how to manage money, how to do finances. So for example, Profit First is a nice baby step for a lot of businesses that are just getting started and have Frankenstein accounting as Mike Michalowicz calls it, and then you need a sales CRM system, which is usually very different than the CRM, which they're calling their back office where it's focused on bringing clients into the business. They're like "I have a CRM. It's Appfolio." And it's not the same thing. And and then there's several other systems that you need in a business process system, planning systems, et cetera. [00:14:47] When people start to think that they have a one system, they're like "I've got Appfolio, so I've got every system I need." This is where they struggle then to be able to scale their business because they don't have the knowledge, the insights and the transparency that they would need in order to get to the next level. [00:15:03] And they don't have the right tool to do all these other jobs. It's not the Swiss army knife. And what's funny is I sometimes equate this to the little multi tool that a handyman might have on his belt. If a handyman shows up with only a multi tool instead of a toolbox to do a job, the property manager is probably not going to call that guy back. [00:15:23] "Oh yeah, I've got a hammer. It's right here." It's not the same. It's not the same. So same thing in business. You can't just run it off of one system. There's no magic one system. Everybody has to build a stack of tools. I'm sure in your business, you have a stack of tools that use as well. [00:15:37] You don't have just one system, right?  [00:15:39] Mo: That's right. It's all about using the best tool using the best tool to get the job done. That's an example that you mentioned about the handyman. At least when it comes to business, it's a huge cost when it comes with time and you're going to pay for everything in business, whether it's going to be in time or in cash. And where you take shortcuts on investing in certain systems, you're going to pay for it in the amount of additional time it's going to take for work arounds and manual things and processes, which is also brings up another point that we always stress to our clients is always consistently read like evaluating the business and your processes and the tooling that's being used so that you can constantly as we say, evolve forward. [00:16:15] Jason: Yeah, it's interesting. I had a mentor and he taught me this concept he called the five currencies. And basically there's five currencies you have to invest in life and in business. And it's time, energy, focus, cash, and effort. And what's funny is there's you get early on stage entrepreneurs that I think are trying to just avoid cash. [00:16:35] They're like, "I want to be cheap. I want to not spend money." And these are the ones that struggle to grow the most because they don't understand that their money is something that you can renew and earn. But time, as far as our life goes, is the scarcest resource. And what's really crazy to me is that our team members, we're buying their life. We're buying chunks of their time. They're trading time of their life for money. And they're trading probably the cheapest commodity for the best, or the trade and the best commodity for the easiest to get it seems like, but that's where they're at. And so as entrepreneurs, our goal is to move beyond just giving up our time and to get money. [00:17:16] And, we can invest more effort. We can invest more focus. We can limit the stuff we're focused on to grow faster, but in business, same thing with these tools, if we think we are saving money by only using one tool, we've got our crappy multi tool instead of building the ultimate stack, [00:17:36] then usually they just end up spending more on payroll. There's having to buy more time to do less stuff. And get less stuff done. So technology is a lot cheaper than people. That's I'm sure everyone listening realizes that, but.  [00:17:49] Mo: Yeah, there's a difference in business when you're looking at things from the lens of a perspective of an expense, versus looking at the total cost of ownership for a particular solution or process or something like that. [00:18:02] And and and in that regard, you can actually, assess the amount of time that's wasted and there's always going to be some opportunity cost. You are a business owner, nobody gets into real estate because they want to do accounting or because they want to work on taxes and whatnot. [00:18:16] And so there are professionals out there who's, sole service and focus and business models is focused on that. And and that's not something that's going to differentiate you from your competition. So those things that are not going to differentiate you, those are the things you should be outsourcing and the things that you should be seeking help to take off your plate. [00:18:31] So you can focus on the things that actually drive your business forward. And allow for you to be able to grow your portfolio.  [00:18:37] Sarah: Yeah, for sure. All right. Now I know this won't be the same for everyone because taxes is this crazy like mishmash of information and what works for you might not work for me and vice versa. Knowing that there's no one size fits all here. We're not shopping like off the rack. This is all tailored. What are some strategies that property managers should at least look into? Now, it might not make sense for everybody, but what are some things that they should at least look into and see "hey, does this make sense for me to implement this? I love learning right? So I love learning especially like how I can save money on taxes. So what are some ways that they can look into and see if it's right for them?  [00:19:18] Mo: Reducing their tax liability Yeah, no, great question. . Of the biggest nuances are just things in accounting is that, there's no such thing as being a creative accountant, right? There's always a right way to do things. [00:19:27] But there isn't just one right way to structure your business. And so one thing that we see a lot of clients struggle with is, they'll create a business initially, most folks don't start off in property management or they're either doing, they either own a brokerage firm or they're an agent and whatnot and they're doing actual real estate sales. [00:19:45] And then they'll try to, get into property management and maybe they have also they're doing in house maintenance and whatnot and maybe like a leasing only service and and maybe they also have assets on the side that they own themselves. And one common-  [00:19:56] Sarah: yeah. They're like, "I do all of these things." [00:19:59] Mo: I do all of these things, but they're doing it all under one entity. And so it's " hey, you should have a separate entity and LLC. There are liability reasons or mitigation for liability that you want to do this. And also, there are some potential tax benefits you can have an actual main corporation and you can have a sub entity or an LLC." That's your brokerage business. A separate LLC, that's the property management business. A separate LLC, that's the leasing only business. Separate LLC, that's the maintenance only business. And that, for example, that corporation can tax each of those sub LLCs, like a licensing cost, just to be able to actually use the name. [00:20:32] Of course, it may be the same ownership structure, but that's a potential way of of having a tax savings. A great example is you have the largest Companies like Apple and Nike and stuff like that, they have separate entities that are outside the US that tax licensing fees, just to use like the check mark with the entity that exists, that's actually transacting with the customers. [00:20:49] And then the other benefit of having all these entities that are separated out is that if you ever want to have a portion of the business that you wanna sell, you can demonstrate what the profitability, the profit and loss looks for that business. And you can have a separate valuation metric for that particular business and spin it off, especially if you have assets of your own, you want to have that in a separate entity, because you'll be able to take advantage of bonus depreciation. And that bonus depreciation essentially allows for you to be able to, take a rental property and take an immediate 1st year kind of deduction. If it's in 2023, you can start at 80 percent and whatever the bottom net losses on that particular asset, or that particular business that owns that asset that can now be offset the excess income. That's liable to taxes to offset against another entity. And so there's some strategies around that. There's also ways to be able to loan a particular asset or for example, if you have a car, you can rent it out to 1 of the entities, even though it may be the same individual that's using it. [00:21:49] There's a way to structure your taxes so that. Even if you own the property, you can technically lease it to 1 of the other entities and that can be a business expense and write off against another against 1 of your other entities. And so there's a lot of kind of small things like that that can make a material difference when collectively put together. But what it will ultimately we suggested something that we don't see too much. And usually we see a lot of clients struggling with is rather than having all your different enterprises and your sales activities, just revenue generating activities wrapped up into 1 entity to separate them out based on business lines. [00:22:22] And this also gives you as an owner perspective on what is working, what is not what needs help and attention and things that sort of be a little bit more prescriptive and data driven and how you make those decisions.  [00:22:32] Sarah: Like that. For sure. Yeah. And then it's. Different P and L's to see, "Hey, what part is actually profitable here and what part, if any, is taking a loss. Where does my attention actually need to be? Because what makes me the most money?" Instead of going "I think this looks pretty good."  [00:22:47] Jason: Things get mixed up. People make bad decisions. It's funny. Just for example, we'll get somebody that says, "oh yeah, I'm getting plenty of leads" and they're spending thousands of dollars on internet marketing. [00:22:57] And I'm like, cool. And they justify it. But I say, "where are you getting the leads from?" The majority were word of mouth. And so you're spending a bunch of money and I'm like, "cool, let's separate this out. What's your acquisition costs on ones you can attribute to the internet marketing stuff you're doing? [00:23:11] And sometimes they're like, "Oh yeah, it's 3- 400 a unit to like, to get on a client." And I'm like, that's ridiculous. And then they're like, "cool. I'll sign up for DoorGrow." I'm curious about the education costs and here at the end of the year, how do we help people justify signing up with DoorGrow leveraging education costs and getting that tax deduction? [00:23:33] Sarah: Such a good question because that's R and D! Research and development.  [00:23:36] Mo: Yeah, it is. It is. Yeah. Real estate coaching training and education costs is considered an expense. It can be considered a deductible expense at the end of the day, especially a lot of the insight and kind of value that you guys add to the community is something that I think is priceless. [00:23:52] And if it's going to make a material impact to clients, bottom line, the thing is that none of us can be experts in everything. And so kinda the reality in business is you can learn in two ways. You can either learn from somebody else's mistakes or learnings, or you can learn the hard way yourself. [00:24:05] The latter is going to take more time, which you're not going to get back. And so the folks that are able to accelerate and grow their business, take advantage of like coaching and training and educational type of costs, I would say, "how do you justify that expense?" At the end of the year, if you're going to have an excess of income, that's going to be tax liable. And in these educational costs, and so you might as well invest instead of giving that money to Uncle Sam, give it to Uncle Jason and find a way to maximize and grow that kind of that ROI. I would say that's probably something that a lot of novice kind of entrepreneurs don't probably put too much emphasis on when they're 1st, embarking on their entrepreneurial journey it's just the importance and significance of education and insight, especially from those that have blazed the path before you, or have exposure to a lot of other folks that are in your same shoes.  [00:24:49] Jason: It really is probably one of my greatest secrets in how we've scaled and built DoorGrow and the success we've had is once I finally stopped being the idiot that thought they could do everything and watch all the videos on YouTube and read books and figure it out myself. [00:25:05] I started to collapse time significantly when I got coaches and mentors and we shell out a lot of money to coaches and mentors and I've got some amazing ones right now, like really amazing coaches and mentors. And what it does is, yes, I'm spending more money, but I'm decreasing time. So it's collapsing time for me significantly. [00:25:24] I'm making a lot less mistakes. I'm not having to figure it out because every stage of business, you're stepping into the dark. And it's nice if somebody has already been there before you 'cause they're not in the dark about it. So they're like, "Oh yeah, just do this and do this. I've already tried that and that, and it doesn't work." And I was like, that's what I was going to do. And the same thing, the majority of the people that come to me are like, "I'm having trouble growing my business." And I'm like, "cool. What do you, what have you been trying? Or what are you planning to do at the startup stage?" [00:25:50] They're like, "I'm going to do internet marketing and SEO, pay per click," they're going to do everything. All the biggest companies that they're competing with are already spending way more money than them doing it. And they're just going to do it worse. And that's their strategy. "I'm going to do what the big companies are doing, but worse. And I'm going to try and charge less money. I'll be cheaper. And I will somehow provide better service." And I'm like, "good luck with that." And so we don't know what we don't know. And we make mistakes at each stage. And the secret to collapsing time is to spend money and invest in yourself. You get that back. [00:26:21] There's a big ROI. All right. Thanks for helping us sell door. I appreciate it.  [00:26:24] Sarah: All right. So if you're looking for tax write offs at the end of the year, sign up with DoorGrow, we can help. Yeah. Don't give your money to the government.  [00:26:31] Jason: And then we'll help you make more money. Nobody stays with us unless we're helping them make more money. [00:26:36] Sarah: Yeah, they haven't helped me yet.  [00:26:38] Jason: Taxes are not giving you an ROI.  [00:26:39] Sarah: Next year when we audited them, they're like..  [00:26:42] Mo: Another thing that I wanted to comment on, actually, a lot of people may not be aware of is between the COVID period of time, there's a Biden had released this this new initiative to be able to give back payable taxes. [00:26:53] And so if you had full time employees, between 2020 and 2021, I think it's up to $25,000 for each employee for each year, and that you can potentially be entitled to up to that amount. And so if you had full time employees, and that's free money, that's not free money. Technically, those are Payroll taxes that your organization already paid, but the government is literally just give it back to you as part of this initiative. [00:27:16] I'll take my payroll taxes back. That sounds great. The only requirement is that you had, you kept people on full time payroll during the 2020, 2021 year. And that those folks were with you for at least a year. And that those were actual W2 employees, not 1099.  [00:27:31] Jason: Okay. That's worth talking about it. [00:27:34] Oh, she's up on all this.  [00:27:37] Sarah: I don't know. Did you think I would have missed that? Okay. I'm telling you, I'm like-  [00:27:43] Jason: She has some strange hobbies. Alright. I do, I know. Mo this has been really interesting. I appreciate you coming and hanging out on the show. Why don't you tell us a little bit about your company and how you can help people with some of this stuff if they're listening to all this going, "man, this is a bunch of gobbledygook I really could use help making this all make sense, and I thought Appfolio was an accounting system for my business" and they're just trying to figure it all out. How can they get ahold of you?  [00:28:07] Mo: Great question. Before I comment on that, one, one thing that I do want to the misconception of Hey, just because you bought accounting software doesn't mean you bought accounting experts. [00:28:14] Sarah: Okay. Oh, that's so good. I love, I'm going to use that.  [00:28:18] Jason: The experts are worth a lot more to me than software.  [00:28:22] Mo: And usually there'll be priced a lot higher too, because the software, the proper application of it, it's like buying, It's like buying a seesaw or hammer or some tool, it's much cheaper to actually buy the tool versus buying or having the expert that's actually going to be utilizing the tool to build whatever. The peace of mind to me is priceless. So it is. I lead a group, a consulting group balance asset solutions been over for a little bit over 7 years. We are a CPA and technology advisory firm assisting clients with accounting, CFO services, like taxes, acquisition, disposition strategy, software implementations we're partners with a lot of the accounting systems like Yardi, and Appfolio, and Propertyware, and Buildium. We also help with Department of Real Estate audits and forensic accounting customer reporting, fund management. We're here to help maximize the value out of your subscription, streamline your business with technology and software, and give you time back to spend on the things that matter to your business, which is growing kind of your top line and working with your tenants and owners. We have clients in over 35 states and we have deep expertise when it comes to the trust accounting gap, the department of real estate compliance representation. So consultations are free and you can find us online at www. balancedassetsolutions. com.  [00:29:33] Jason: Man, that's an awesome combo, nerdy accountants. [00:29:36] That's like the best combo ever, right? All right. Super cool. All right. So hopefully some people are reaching out to you right now when they're watching this and we appreciate you coming on the show.  [00:29:46] Mo: Of course. Thank you so much, Jason. Take care.  [00:29:48] Jason: All right. Take care. If you are a property management entrepreneur, you're wanting to grow your business, reach out to us at DoorGrow. [00:29:54] We would love to help you out. You can check us out at doorgrow.Com and join our free Facebook group at doorgrowclub.Com. Bye everyone. [00:30:00] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:30:26] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Learn from property management growth experts as they chat with Nick Friedman, founder of College Hunks Hauling Junk and Trash Butler. Topics include entrepreneurship, daily trash removal, vetting team members, and junk removal services for property managers. Discover how culture, behavior, and execution play key roles in business success.

If you’re a property manager, you know that property management is a tough and demanding industry at times. Property managers often feel pressure to make owners and tenants happy.  In today’s episode, property management growth expert Jason Hull sits down with Logan from Virtually Incredible to talk about how property management entrepreneurs can improve their company’s customer service. You’ll Learn [03:41] Making big impressions as a small business [10:39] Does every other property manager suck?  [18:52] Things you can do to improve your customer service [25:59] The importance of process documentation [32:46] Importance of culture when hiring remotely Tweetables “If you are letting yourself get bogged down on the stuff that you can delegate and the stuff that doesn't need your immediate attention, you're going to be limited on the big impact stuff that really deserves your attention.” “If you avoid investing cash, then you're going to have to invest more time and effort.” “Phone calls are probably the biggest source of interruptions and the biggest source of staffing expense in a property management company.” “Automation shakes hands with customer service.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: Phone calls are probably the biggest source of interruptions and the biggest source of staffing expense in a property management company. And we've been able to cut some of our clients staffing costs in half just by convincing them to not do phone calls  [00:00:17] All right. Welcome DoorGrowers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you are open to doing things a bit differently then you are a DoorGrower, DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. [00:00:42] Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income at DoorGrow. We are on a mission to transform property management, business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show. [00:01:19] And I'm hanging out today with Logan Breen of Virtually Incredible. What's up, Logan?  [00:01:25] Logan: What's going on, man. Thanks for having me. It's good to have you.  [00:01:28] Jason: So in our topic today, we're going to be chatting about small business, big impressions: mastering customer service for a professional edge. So before we get into that, Logan, why don't you give people a little bit of background on yourself? How did you get into property management? And give us some backstory.  [00:01:51] Logan: Okay. I'm third generation in property management myself. A lot of people might know my dad, Todd Breen. He is a pioneer in outsourcing and the property management industry. And I'm sitting today. I usually work from my home office, but I wanted to make sure I had a nice, bright background for our podcast today. So I'm sitting in our property management office here in South Florida. And I grew up with my dad being a one man show and running a small business without a lot of the automation and tools and outsourcing that has come with technology. And I can recall as a kid cleaning this same office with my sister. If we wanted to use the family company vehicle, part of our chores was to make sure all the office was clean and we would see stress pills and we would see a heart monitor what is it? Heart pressure monitors and stress tea remedies all over the place and we made a blood oath that we would never get into property management because it was way too stressful. And now fast forward to today, she's the broker at our management office and I'm helping hundreds of property managers across the U S implement the same best practice strategies, outsourcing strategies to make life a little bit easier. [00:03:10] Jason: All right. So what was the consequence of this blood oath?  [00:03:13] Logan: There's a little bit of an exaggeration, but we promised that we would not be in the family business, but you know what? It's a complex business and we learned it just through working with dad growing up, we worked in a variety of ways in the management company. [00:03:30] And with the tools of outsourcing and having a good team, it's not as stressful as it once was.  [00:03:35] Jason: Yeah. And now you're helping alleviate everybody else's stress, so they don't need stress pills and yeah. So let's talk about this topic, small business big impressions. And I think when entrepreneurs are starting a business, they all want to appear big. They all want to because their insecurity is they're small. Yeah. It feels small. And they're like, "people are going to know that I'm small. And if they know that I'm small, they're not going to want to work with me and trust me because I'm small." I remember feeling that way when I started my web design business decades and decades ago. And so I was like, "I got to make this sound really big and really official." like, you know, as openers, they're like adding the word group to the end of their business name. There's no group.  [00:04:17] Logan: That's great. Yeah. Yeah.  [00:04:19] Jason: So one of the things we would help with is we help them have branding website, like stuff to look like they are a larger, more established or more reputable company. And it does, it helps trust, but let's talk about customer service. How does this really play into people's perception and trust? And as everybody's heard me say on this podcast, a million times, sales and deals in this industry and every other happen at the speed of trust.  [00:04:47] Logan: I think you're right when you say that it's a mental thing as well, because there's benefits of being a small business and a level of personal touch that a small growing business can give somebody who's trusting you with their biggest asset. [00:05:02] Depends on who you're working with, right? If you're talking about a big investor that has multiple pile of bricks that makes them a few bucks. If you're talking about somebody who, is an accidental landlord, that's just trying to be financially responsible with this asset they're trying to hold on to, having somebody they can get ahold of having somebody they can talk to, those are all strengths if you want to do a concierge side of thing, but regardless of how big you want to get and what your goals are, it comes down to time management. And if you're tripping over, what's that saying, tripping over dollars to pick up dimes if you are letting yourself get bogged down on the stuff that you can delegate and the stuff that doesn't need your immediate attention, you're going to be limited on the big impact stuff that really deserves your attention. And it's really going to help you meet your goals.  [00:05:53] Jason: Yeah, there's really this interesting dichotomy between the cheapos, as I call them, that are being cheap while trying to start a business in order to save money versus being smart and spending effectively so they can have even more money. [00:06:10] Logan: Yeah. Yeah. There's definitely something to be said about, being smart with your money. It's something to look at. You need to monitor where your labor costs are going. For instance one of the biggest things we did at our management company. Is we started looking into the labor costs in our leasing on a micro level to where we're looking at each property, how much it's costing to rent it and the labor costs going towards it. [00:06:38] And if you're not taking reports of your call volume per property, your super competitive properties are very likely exceeding your leasing fee, the labor costs to be able to rent them. So there's tools out there. And in fact, that's one thing we do at Virtually Incredible is when somebody is using phone tenders, or 24/7 call center, we give them a breakdown of their call volume per property. [00:07:01] So that way you can look at, "okay, This really competitive three bedroom is getting 40 percent of our calls. We need to yank the phone number right off of that sucker because we're not going to make money losing money by exceeding our leasing fees on that specific one." And on the opposite side of the fact, if we're getting a really low call volume on a specific property, that's a perfect opportunity to tell your landlord, "Hey. You're losing more money than this place is sitting vacant." but if you don't take the time to invest in these tools and these procedures, and you're just spending money blindly or saving money blindly by doing it yourself, you're going to be time poor. Time poor is something you can't invest. You know what I mean? It's something you can't regain or build. [00:07:41] Jason: Yeah. I talk about five currencies. I learned this concept from Alex Charfen and five currencies are time, energy, focus, cash, and effort. We have to invest some of these in order to grow and scale a business. And if you avoid investing cash, then you're going to have to invest more time and effort. But I think one of the biggest secrets that we have at DoorGrow is instead of time management, we get our clients focusing on energy management. We get them on which things give them life and energy and which things drain them. And the things that are usually the lowest level tactical type of work. [00:08:19] It's not this strategic stuff of planning and being a visionary and dreaming about the business and learning new stuff. It's the stuff that's like detail oriented, nitty gritty stuff that should be offloaded and it's usually low dollar work, right? I think the very first person, any entrepreneur should hire, and usually they will get something the business needs. [00:08:42] Not what they need. They'll get like a maintenance coordinator or they'll get something. But I think the very first thing that every entrepreneur should get is an assistant for themselves. They should take care of themselves and get rid of the stuff that's draining them because then they have so much more energy. [00:08:59] And I think the biggest challenge I see in this industry and in any industry is that usually entrepreneurs in the early stages try to build the business around what the business needs. They started to build the team around what the business needs instead of building it around what they need. And so then eventually they end up with a business that maxes out their level of miserableness and they have an entire team. [00:09:24] Yeah, so by default that means they have the wrong team because they should be getting more freedom and more fulfillment If they were doing it correctly. Even though they have more money, they have less of those things and so what we have people do to figure out what sort of assistant and what they could do is we just have them do a Time study and put plus or minus signs next to everything like does this give me life or take it away? [00:09:46] Logan: I love that and you know. When people decide that they want to be an entrepreneurs versus have a J O B and, clock in, it tends to be because they want the freedom and they want the energy and then they end up giving themselves a job. And if you've given yourself a job, I wouldn't call that prime entrepreneurial. [00:10:03] You know what I'm saying? Yeah. That's so cool. Yeah. Yeah. Yeah. Yeah. Delegation buys you freedom and it's a skillset. If your slogan is, if it's to be, it's up to me, you're giving yourself a glass ceiling. And so yeah, we're on the same page. I agree with you.  [00:10:20] Jason: Yeah. So why don't you let everybody know, how do we master customer service for professional edge? How do we solve this problem? Because customer service in this industry is generally considered to be pretty shitty. Yeah, property management has a bad rap. Yeah, most property managers I talk to, especially the startups and they always tell me, " I started this business because I had some rental properties and all the other companies sucked in my market." But it's never them. [00:10:52] Nobody ever thinks they suck. Everybody else sucks. Yeah. So what do you think needs to happen there? Like, why is that?  [00:11:00] Logan: It depends on your goals. Okay. I talked to hundreds of management companies, maybe dozens every month, we'll say on what their goals are with their portfolio. [00:11:09] If their goal is to have a not real demanding, residual income to just supplement a retirement or something like that. I would say, keep your current clients, the owners happy. And and, try to reduce turnover. So nobody's losing money. If their goal is growth and building, then it's going to come down to meeting the needs of your market. Now, what we're seeing in most markets right now is that our leasing market is getting back to normal. Okay. And what I mean by that pre pandemic, we had these seasonal fluctuations where summer was red hot. [00:11:49] And fourth quarter and into the first quarter was a little bit cooler, and everybody tried to make their leases end in summer for quick turnover. And then 2020 was dead, but then 21 and 22 was a red hot leasing season. And people took leasing for granted. If you ask me. And what I mean by that is it was going to move, right? [00:12:13] In most markets you were going to get that, and there's different theories as to why that is. I think part of it is people were a little weary to move if it was already in their agenda anyways in 2020. 'cause they didn't know what was going on. But then we had this super surge of a lot of different areas and people started working remotely. So they weren't really considering in 21 and 22 necessarily geography distance between them and their careers because a lot of people remote work when went way up. So I think that kind of played into it as well. [00:12:46] But this is the first year that i'm seeing that we're back into this seasonal dip where people are having long times on market. And fourth quarter which to me is signifying business as usual again but you know a lot of people in my opinion treat leasing as their red headed stepchild because, you know when it's a healthy season, it's something easy to overlook as long as you know screen the applicants appropriately everything goes well. But when a leasing season gets tight that, separates the men from the boys if you will on how you're going to do it because when somebody's showing up and they need a property manager, it's generally not because they have a awesome tenant that's paying rent on time in place and they just are looking for somebody to split the money with. They're looking for somebody who's going to give them a good long term return on their investment. And when they're deciding who they're going to park their best investment with, they need somebody who's going to answer the phone and really juice every bit of leads when these tight leasing markets are happening. [00:13:47] So that's one aspect. And then the other aspect, Jason, and I know this, in fact, we've talked about this before, but somebody who dumps a bunch of money and to getting management leads, but then lets those leads go to voicemail. Yeah. It's like cranking your AC all the way down and leaving the windows open. [00:14:05] Yeah, that's a good analogy. Yeah, it doesn't make sense. We do a secret shopping campaign where we call management companies across the U S and we document how many of them answer the phones. And we call as both an owner. And as a prospective tenant and even for owner calls, which I would argue if scaling or even maintaining a door count matters to you, the management leads matter to you. And less than 50%. In fact, I think it was even less than a third. It's been a minute since I've looked at the numbers, but less than a third of people are answering that line live. So it's not really hard to stick out and do well. But if you're bogged down saying, "I don't want to spend any money," and "if it's to be, it's up to me," and "I'm the only person that's going to run the show," then you're limited and you end up letting what you consider low importance tasks fall off. [00:14:59] And then, the cycle of suck that you just mentioned that nobody can answer the phone, give me good customer service. I'm going to start my own management company. You'll end up doing that to yourself.  [00:15:08] Jason: Yeah. It's a cyclical thing because if they're spending money on marketing and they're not answering their phones, and a lead's only good for maybe five, 10 minutes max, and then it drops I don't know, 80 percent in conversion rates, right? So then you're right. It's like leaving the window open with AC on. And then because they're spending all this money on marketing and they're allowing these leads to fall flat and they're not getting a good ROI, they're spending a bunch of money. [00:15:34] Some companies spend 20, 30 percent of their revenue. And a lot, there's a lot of property management companies that don't even have that percentage of profitability in their business. And so they're wasting money on marketing. They're not answering their phones. And then that's going to lead to a lack of cashflow and a lack of cashflow means they can't hire good or enough people. [00:15:56] And then there's bad customer service. And then it makes the problem worse. And for some reason they just bounce around like this rock in a tumbler rolling at the bottom when they could be flying, like it could be a lot better. And so that's interesting. So I'm curious what else you're, people that you're talking to are seeing right now. [00:16:16] Are you seeing people in some markets, I've heard some complaints that it's becoming more and more difficult to get renters. Others, I think are like have a scarcity of property. And I think maybe it could be due to like migration. There's been a lot of migration, migrating happening due to, from COVID people gravitating towards States with more freedom. [00:16:38] Logan: As far as the limitation of properties, that's going to vary a lot more market to market and I think that the higher interest rates on sales and deflating what sale prices are, is going to lead to more people holding on to their investments to regain their equity again, which I think that'll bring that back around if somebody's having a hard time finding accidental landlords who, for, I'd say the majority of our clients. [00:17:07] I have people that work with hedge funds and people that work with big time investors, but would say the majority of our clients, our own management company is designed on the one off two off handful, maybe 34 units that somebody is a small time investor. And I think that for us has always been a good long term strategy of somebody just keep it being happy at splitting their money with and getting rid of the headache with a property manager So on that side of things, I think the interest rates are going to bring that back now when it comes to the leasing leads yeah, I do think politically and stuff like that, that can that likely has a lot to do with some of the inflows and stuff like that. [00:17:45] But I think that we're getting back to the norm of people don't want to move during the holidays, especially you get up north of interstate 40. That'd be brutal to move in the winter up North during the holidays and in that time. And I think we're getting more into the steady flow. I'll tell you with leasing, I think that's a more quickly moving market, which is why those call stats that I mentioned before are so important. [00:18:13] Like down here in Florida, we've had huge influxes and huge rate increases on both rent and own, and purchase prices. Yeah. Yeah. And being able to see the call volume in real time per property. Allows us to really make micro changes and what the market's doing on a seasonal basis and all that. [00:18:37] Jason: Yeah. And that's from calls coming in on these vacant properties or up for rent properties that that your team are fielding. So this is an advantage using Virtually Incredible that you get data and metrics and insights that you just probably wouldn't be able to gather otherwise.  [00:18:52] Logan: Yes, it's a perk that we use. [00:18:54] I'd imagine that somebody could make a system to do it. That is a big perk that our clients enjoy. Yes. Is that they get a call breakdown for their leasing calls per property and for mainline calls per caller type, for instance, at our own management company when we first started looking at our mainline calls, we noticed that current tenant calls made up almost 50% of our call volume. Meanwhile, we're using cutting edge management softwares with tenant interfaces, and yet people would still rather pick up the phone. So we took that insight and we created a newsletter that said " hey, it's in your best interest to be communicating with us in writing." In reality it's in our best interest too because we're saving on the labor costs and the time management and all that comes with it. But we were able to reduce that down to 12 to 15%. And if you're not looking at those stats, you're not looking at the opportunity to save on the labor cost. [00:19:49] Jason: Yeah, it's interesting because phone calls are probably the biggest source of interruptions and the biggest source of staffing expense in a property management company. And we've been able to cut some of our clients staffing costs in half just by convincing them to not do phone calls and to figure out ways to do things through text and email so there's a record kept in a lot of instances. Now, and I've read some books on customer service recently, and nowadays people do prefer to be able to self serve like that would be better, but they always look for whatever's easiest. And if they can't figure out how to self serve easily, or they don't know, they're just going to pick up the phone because making a phone call seems like the easiest option. But a lot of people, especially the younger crowd today, they don't like talking on the phone to human  [00:20:38] Logan: beings.  [00:20:39] Automation shakes hands with customer service, right? So the more that you're able to supplement a "do it yourself," frequently asked questions, texting, whether it be, any interface like that with portals is absolutely great. [00:20:57] And it allows you to have the budget for the customer service where it matters. For instance, you mentioned earlier, a management lead goes goes down in value you say in five minutes, I say in the moment that the voicemail is hit. The moment, because if it is a referral that you're getting, maybe that person wants to work with you more than anybody else. [00:21:23] But if this was just a, if you're just a company they found online due to whatever marketing advertising, you have good reviews. That'll be a plus, obviously. But if they hit a voicemail, the immediate thoughts that they're thinking, "Is this company still taking on more management accounts?" Yeah. "Is my property even going to be a fit to their portfolio?" [00:21:45] " If it's hard to get ahold of them right now, is it going to be hard to get ahold of them about my investment later?" And they're thinking all of that while they're scrolling down to the next lead and calling them. So yes, I think that having the do it yourself is key to be able to have the budget to put the customer service where it really matters. [00:22:04] Jason: So what are some things that property managers can do based on what you've seen to improve their customer service directly? And then what are some ways in which virtually incredible could help do that?  [00:22:17] Logan: So it's going to depend on the goals and it's also going to depend on their size. Okay. Usually one of the first questions when I'm sitting down with a potential new client and I'm doing a outsourcing consultation. [00:22:30] On what would be best for them is I get an idea of their team size, their door count, and their goals. So the two options that we then discuss from there is either phone tenders, which is our 24/7 property management call center that's divided up into three departments where we have a leasing call center where we pre qualify, answer questions, and schedule showings. We have a main line where we answer any call with custom scripting and escalation that would come into a management office. So we have custom scripts for current owners, current tenants, applicants, vendors, whoever would come in and however we can best assist them, answer their frequently asked questions, and escalate them to the right person if that's what they end up needing. And then we have the emergency repair where we're available for after hours maintenance emergencies to qualify the emergency and troubleshoot it with them over the phone, seeing if we can delay it and that sort of thing. [00:23:32] And the cool part about that particular service is it, the minimum subscription cost is 97 bucks a month and you have 24/7 coverage on all of these departments. And then based on your usage, it can go up from there on a per minute basis. So somebody who is really wanting to grow, doesn't have the need for a full time person yet, and really wants to grab time management and and grab control of their life and their, their work life balance, that's a great first place to start. [00:24:03] Then from there, if you have an idea that, "okay, I've got all my systems in my head. I really need somebody who isn't just fielding these calls for me and helping me with time management, I need somebody who's going to help me and executing processes and taking the process from what's between my ears and making a policy, procedure, and systems," because I'll tell you right now, most people that start their management company from the ground up, it all starts right here. It's all going to be between their ears and if it's to be, it's up to me because it's going to take longer for me to train somebody how to do it than it is for me to just do it myself. [00:24:43] That's all the limiting beliefs that I find a lot of people who have not mastered the power of delegating, that's what's blocking them. That's what's limiting their imagination here. And so what we do is we train each one of our virtual assistants, how to take a screen recording, and we give all of our clients a subscription to Screencast O Matic or Loom or some other screen recording tool where they just demonstrate a process over the computer and it hooks up to their microphones. They dictate anything they're keeping in mind while demonstrating that process. And then our virtual assistant will review that video, create a step by step outline and then file it in their network next to the video to create a handbook process and procedure on everything they're doing. And it serves as a point of reference for our virtual assistant to be able to refer to later or it as this person scales, whether it be in their own. [00:25:40] Whether it be locally they scale or remotely with remote team members and virtual assistants, this serves as a starting training manual. On everything that they do. So we're helping them bring everything from here and lay it out to really get over that hurdle of scaling. [00:25:59] Jason: Yeah. I think it's important to get that first level of process documentation done, and a lot of entrepreneurs mistakenly think they need to do it when they're usually the worst person to do it. So it just show somebody how to do it and record it then they can give that to them and then give them the challenge of creating that process documentation. [00:26:20] The second level after process documentation level two is like process checklist. This is where you're using maybe a tool like Lead Simple or Process Street or something where now people have to run through some steps and check things off to complete a process. And the third level is something like DoorGrow Flow. Which is a visual workflow and it has the ability to have checklist, but it's something that everyone understands and it's a lot more intuitive visually and workflows are how humans think about process or flow charts and so you're building a flow chart to build your processes. Anyone can check this out at doorgrowflow.com this is new but if you're following the process visually and you map it out that way, it's super intuitive. Everybody on the team understands it. And it doesn't have to just follow a linear path because a lot of processes in property management are not just linear. There's things happening concurrently. So there might be decisions to be made and building that stuff out in checklist based software is really complicated. You have to be like systems nerd. And then once you build that, no one understands it, but you. But if it's visual, it could be like, "do they have pets" go down this path. No? This way... back together." and so you can do more complicated stuff and everybody can look at it and go, "Oh, this makes sense." [00:27:43] Logan: Yeah, absolutely. Getting that systems out in a way that's navigable, but navigable by everybody else. I'd say that's the biggest hurdle to scaling.  [00:27:51] Jason: Yeah, in order to scale rapidly, you need a really good process system. You need a really good people system for hiring. And if you're not, you don't have that developed yet and you're playing Russian roulette, it's good to start with some agencies to get help, right? [00:28:06] Yeah. Your first initial hires, you're going to learn a lot just by working with agencies like virtually incredible because they're going to walk you through the process. They're going to ask you a lot of questions, things you haven't thought about yet. They're going to help you avoid some of the common pitfalls and mistakes. [00:28:22] Like I call it the clone myth where everybody, when they're starting out, thinks they need to go find themselves. Yeah. You go find a clone. And later they learn that in order to actually duplicate yourself as an entrepreneur who wears every hat in the business, you need 10 people to actually clone yourself and not do anything. [00:28:39] And so that's the clone myth. But then yeah, so I think getting all these things mapped out and then being able to get the help that you need early on. Then you can graduate to having your own hiring system if you want to but you're going to need really great people to help you run that as well. [00:28:55] Logan: So when you're doing it yourself when it comes to hiring somebody remote, there's a couple big pitfalls that I make sure to talk with clients about because we have recruit direct options. So there's traditional virtual assistant placement is basically a version of a no compete contract, right? [00:29:17] It's a staffing company that says, "I want to be the middleman forever and ever, amen. You'll never work with this person except through me." And then over the last few years, we've seen an evolution to like recruitment to where somebody helps you pick the right person and helps you with all the different processes, maybe some of the training and they do an initial upfront fee, and then you pay that person the hourly rate that they take home. And the pitfalls with that is there's only so much that's in their control after they hand you the wheel. So they give you like a 90 day warranty on turnover. And if hit bumps in the road and lose the person after that, start from scratch, you've got some of the training materials. [00:29:57] "Here was a list of best practices. Good luck." And so that inspired our hybrid model, which is that people are welcome to work with our staff member as long as they like through us on a month to month basis. And if they ever decide that they like their person, but for whatever reason, they'd like to take advantage of the savings and work with the person directly or they don't see the value in the different tools and free replacements that we offer and they're welcome to take that same person they're experienced in working with and not only will we allow them to hire that person direct, but we will coordinate it with them and we will have an orientation and we will walk them through the process of offboarding from Virtually Incredible and onboarding directly with them. Some best practices and we do it at a discounted rate for the longer that the person has worked. With that person through us.  [00:30:52] Jason: Got it. So the longer they're using you as an agency to have this team member, the less it costs to buy out their contract or to have them just move over to paying you directly.  [00:31:03] Logan: Even less they have to pay if they use the promo code DoorGrow, where they get 5 percent off on the hourly rate and the per minute rate. [00:31:11] Jason: Yeah, there you go. Say that discount again. A discount promo code is DoorGrow D O O R G R O W. And if you have any technical difficulties, just talk to Logan and he'll make sure it's it's applied for you when you're doing it, but it's pretty simple. There should just be a spot for it.  [00:31:28] Cool. So get your discount. [00:31:30] So yeah, if you're in the early stages, you haven't had a lot of success in hiring, or you've been around for a while and I've seen larger companies, they're still playing Russian roulette when it comes to getting team members. And if you have not successfully had several experiences yet in the outsourcing, getting people from Philippines or Mexico or anything else, I highly recommend to anyone listening, you leverage an agency. [00:31:55] They're going to help you manage that relationship. They're going to help you manage cultural differences. They're going to help you make sure there's a stronger level of accountability and they back it up that if they, you need to replace the person, they can help you do that quickly because there's a lot of potential pitfalls, a lot.  [00:32:10] Logan: There is. And one of the biggest ones that I see people that they just haven't even thought of is with the growing industry of freelance work and Fiverr and all these other things. You don't want what I would call a mini entrepreneur or a freelancer. [00:32:28] Somebody who's building their skillset and then is going to just keep their resume out for a couple of bucks an hour more than what you're paying them. Because I don't care whether you're talking about hiring somebody local or you're talking about hiring somebody remote. Turnover is the most expensive part of staffing. [00:32:46] Jason: Yeah, I want to own the team members attention if they're on my team. And so one of the biggest challenges I'll see when people are hiring freelancers, and I've hired lots of different types of people right in the past from lots of different areas. And I've learned the costly mistake of hiring people that are not focused on your business. [00:33:06] If somebody is a freelancer, And they're working maybe part time for you and part time for somebody else. They have their primary focus is getting jobs. Their primary focus is their own life and business. Whereas if they are full time with you or dedicated just to you, even if they're part time, cause that's all the bandwidth they wanted to like to focus on you have their full attention. Their focus becomes your business, which is what we want. We want them to be focused on our business to help us improve our business, not constantly working on their own agenda and their business. And that's the big differentiator that I've seen. And I want team members that are thinking about DoorGrow in the shower. [00:33:50] I want team members that are giving me their discretionary time, believe in what we're doing. And they're excited about it and they're doing something that they enjoy doing, right? I want them to be a culture fit for DoorGrow, personality fit for the role, and a skill fit, meaning they've learned what they need to do in order to be successful. And then we're winning and I think that's the greatest secret in business is that it doesn't matter how many processes you have, it doesn't matter how many KPIs you have, it doesn't matter how many metrics you throw at your team... if you want a team to perform well, it doesn't even matter how much money you throw at your team members. [00:34:26] A lot of entrepreneurs mistakenly think team members behavior will improve if they throw more money at them or bonuses. And that actually tends to go get worse for most team members. That may be entrepreneurs and salespeople. Most people don't actually deep down like money. I know that sounds crazy. And so we need to make sure that we are building an effective team. [00:34:47] An effective team is the secret sauce to having great customer service. That's the secret sauce, is to have a great team that like, buy into you, believe in you, and are not just what I call a hider employee, where their secret goal is to do as little as possible if they could get away with it, get paid as much as possible if they could get away with it, and complain about you and live for the weekend. [00:35:10] Logan: Yeah. Yeah. One of the first things I ask in an interview regardless of the position is what motivates you? And it's super important to be able to speak somebody's motivation language. You throw money at somebody who cares more about work life balance or who cares about accommodations. [00:35:27] A lot of people on my team we make sure that everybody's very well taken care of and money's not overlooked by any means, but reassurance and it's no secret that we do the majority of our hiring out of the Philippines and one thing that is a beautiful thing about their culture in the Philippines is how naturally it meshes with customer service and the wanting to please. Okay. And in fact, one of the training modules. that we have is that your job is not necessarily your identity, which means that when you have a tenant that is so frustrated because when they moved in and just spent all this money and it wasn't exactly how they wanted it, or, something happened and they need to they feel that they, that breaking their lease is the way they need to do it. [00:36:23] And they want everything the way they want it when they want it, we found that a lot of our really rockstar virtual assistants that were just great were getting high burnout because their level of empathy with these people and having to enforce was just hurting, crying. And so we have a, "Hey, you're not your role." [00:36:42] And when you're at home and when you're with your family and your friends. We love your culture and what you're driven to just always be such a helpful, great person and do that when you can, but it's okay to say no, and it's okay to enforce policies and to not take that personally. [00:36:58] And until you understand the nuances of the culture that you're working with, if you're not working with a professional who has a leadership team that shares that same culture and values, you're going to have burnout that you don't even know why you're burning out. Because you'll hear. "Oh, I have a sick relative. [00:37:19] Oh, I have to go move and I have to go take care of this and I can't work with you anymore because I don't want conflict and I don't want you to feel bad about yourself, so I'm going to tell you that I have to leave because of something that's out of your control and in my life." And so people are sitting there beating their head against the wall, not knowing why. [00:37:37] Jason: Like, "why do I keep losing all these Filipino team members? Yeah. And they're all having all these problems?" No, the problems you and you need to be a better boss probably. Yeah. Yeah. Culture in a team and in a business is everything. You cannot have a great team without great culture like that. And culture, it means you shared values. You have to find people to share your values. Otherwise you have hiders and hiders are trying to get money from you and do as little as possible and, or they're going to quit and leave because they don't believe in you. They don't believe in the company. [00:38:09] They don't believe in what they're doing. You need believers. Yeah Logan, this has been fun. And you've told us a little bit about phone tenders. You told us about your mainline service, the emergency repairs service. Line, it sounds like it's pretty affordable for people to get started. [00:38:25] How can people reach out to Virtually Incredible and find you guys?  [00:38:30] Logan: So info at virtuallyincredible. com, Logan@virtuallyincredible. Com. My direct line is (561)-323-7039. I should be a better person to know our mainline office number, but I'll re I'll answer that one too. But it's on the website virtuallyincredible. com and if you are interested in the idea of outsourcing and you're not really ready to talk with somebody about it, but you're just curious. If you go on our virtual assistant page, we have something that's pretty interesting. We have a list of people. These are not examples. I'm not just shining up our brightest and best and and have a sample of resumes and voice recordings. [00:39:14] We have a live list that's updated automatically every 10 minutes with candidates that are ready to get started and have already started training. And there's voice samples where you can hear what they sound like. And there are their resumes where you can see the difference experience and stuff that they have. [00:39:33] And then there's a little note that mentions based on our experience, what their ideal role would be. It's like a catalog of humans. You can just go on there and listen to them. And  [00:39:43] yeah, that's pretty cool. It's just a job. Yeah. It's something that these people have already been vetted. [00:39:48] We've already done all the background checks. We've already validated their resume, contacted their previous employers. And so if anybody on that list looks interesting then reach out to me, we'll chat about it and we'll start talking about scheduling interviews.  [00:40:04] Jason: So go to virtuallyincredible. com and start window shopping some virtual team members. All right. All right. Thanks, Logan. Appreciate you being here on the show.  [00:40:14] Logan: Thanks, Jason. Appreciate you having me.  [00:40:15] Jason: All right. So if you are a property management entrepreneur that wants to grow your business, you want to add doors, you want to figure out when is the right time to hire, how do I scale my team? [00:40:25] How do I start adding and scaling doors without wasting any money at all on advertising? How can I do this? We have clients that are scaling rapidly. We just need really good property managers. So if you feel like you're a good property manager and you just need the right system. We've got the system and we call it the DoorGrow code and the DoorGrow code is our roadmap and our system for scaling businesses. [00:40:49] It's like a martial arts style belt system going all the way from white belt, stepping onto the mat with your first door to yellow belt with your first 50 doors on and on until black belt, a thousand doors. And we confidently know that we can get you to a thousand doors in the next three to five years, even starting from zero, if you will follow the code and do what we say, you can do this. There's really only two ways to 10x the growth in your property management business. That's through acquisition or that's through doing our strategy of organic rapid growth. It's not going to be through advertising. [00:41:25] It's not going to be through cold lead marketing. It's not going to be through SEO or pay per click or content marketing. So if you want a 10 X to grow through your business and be like one of our recent podcast guests, Kent Hardman, who added went from zero to a hundred doors in six months, investing only 10 to 15 hours a week, two to three hours a day towards making some phone calls, using our strategies. [00:41:47] We want to help you grow, reach out to us. We can help you scale your business. And if adding more doors right now sounds uncomfortable or not fun for you. It means if you add another a hundred or 200 doors, it would increase your stress level. And you have a business that's not scalable. So reach out to DoorGrow. [00:42:04] We can help you turn this around, turn around your team and turn this into a scalable business. You probably believe what we call the process myth, but it's not true. You don't just need more processes. You need a better team and we have a whole training on this. We're happy to give to you for free. Just comment on any of our social media, the word myth, or say you would like our process myth training. [00:42:27] And we're happy to send you that for free. It might blow your mind and change your thinking forever. So reach out to us. We would love to help you figure out how to get more leads and how to solve the process problem in your business. And you will become infinitely scalable and you can grow rapidly. And just like our clients are doing. So we'd love to support you and help you out. Reach out to us at DoorGrow. com. Bye everyone. [00:42:50] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:43:17] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Learn how strategic planning and utilizing the quieter winter months can lead to growth in the property management industry. Discover the importance of planning and overcoming challenges, as well as building the right team for success. Explore how Satorgra can help property management entrepreneurs achieve significant growth through coaching and mentoring.

One of the biggest questions we get from property management business owners once they start building out their team is “How do I compensate and recognize my team members?” In this episode, property management growth experts Jason and Sarah Hull discuss the different kinds of compensation structures for different personality types and roles on your team. You’ll Learn [02:15] The difference between you and your team [07:56] The problem with giving out percentages [12:13] How to set up commission structures [21:23] Recognizing your team effectively [25:44] Giving out raises and job titles Tweetables “Business is a more effective vehicle than even a charity at creating lasting and impactful change.” “When you dangle the carrot in front of a great salesperson, they will jump off a freaking cliff to get it.” “Your discomfort in giving somebody a raise should be equal to their discomfort in asking for it.” “Recognition costs nothing.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: They need to be invested in like committed to helping you grow this business and helping you move it forward, otherwise they are just dead weight and you're creating a bigger and bigger monster of dead weight as the business grows.  [00:00:14] Welcome DoorGrowers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrower. [00:00:31] DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management, business owners. And their businesses, we want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win. We are your hosts, property management, growth experts, Jason Hull and Sarah Hull, owners of DoorGrow. [00:01:11] That good? Now let's get into the show. All right. We were trying to change the intro right before we did it. And sometimes she's not on it. Sometimes she is. She's mostly on it now. So. Anyway, here we are. So our topic today, I'm getting a lot of questions, a lot of questions, and this has been going on for a long time, but we're getting a lot of questions about compensation. [00:01:37] This just keeps coming up and we see a lot of mistakes when it comes to compensation. So the challenge with compensation is that entrepreneurs think differently than most people that they are paying, and so they make mistakes in how they compensate people because they think it's going to help them get more of what they want and they actually create the opposite. [00:02:00] And so I want you to pay close attention to this today. If you watch this you should not ever ask if you should be giving out a commission or percent sign to somebody or whatever So let's talk about a couple of things here. So where should we start?  [00:02:15] Sarah: Well, I think the best place to start is probably from just for background. [00:02:20] What is the difference between someone who has a sales mindset or entrepreneurial mindset versus someone that may not.  [00:02:30] Jason: Cool. Let's talk about that. The two types of team members that you're going to have. There's two types of people on the planet, those that like money and those that don't. And I know you're thinking, "man, no, everybody likes money." [00:02:42] And you'd be surprised. And so if you had all of your team members take a DISC assessment, there's usually on a nice DISC assessment, a section called the values index. And one of those values is the economic or financial score. And so on the economic or financial score, what you will see is that the score is low, then they don't like money. [00:03:04] And I know that sounds weird. They're not focused on money. They're not trying to get money. Money is not a big part of their psyche. It's just not. And I know entrepreneurs, you don't get this because you like money. Sarah and I do not hate money. We don't hate money. Okay,  [00:03:20] Sarah: I need that shirt. This is the one t shirt. [00:03:22] I'll wear the capitalistic pig shirt  [00:03:24] Jason: Right and so we don't hate money. You probably don't hate money either. If you do hate money and you're an entrepreneur Then you are probably struggling to have money, right. Money is the ability to change lives, make a difference and have impact. This is why business is a more effective vehicle than even a charity at creating lasting and impactful change in my opinion. [00:03:47] Okay? Because it has healthy motivators connected to it. Right. And money is the energy and currency of what everything moves through to happen. Right. So let's talk about this. So if the economic score is low, what does that mean? I'll tell you whose economic score is high. If your economic score is high, you are probably an entrepreneur or a sales person, right? [00:04:11] Those are probably the only two personality types or people that you should be paying out more money or bonuses or commissions to incentivize better behavior. That means most people, you should not be paying bonuses, additional financial compensation to try and motivate or change behavior. Now, if you just want to be generous and it's Christmas, that's different. [00:04:36] But if you're trying to consistently compensate somebody and motivate them, the motivators need to be connected to what your outcomes are and most people are doing it incorrectly. Now, if the economic score is low, this is what this means, they would rather what they most value is recognition. They would rather be recognized. [00:04:55] And recognition costs nothing. It costs nothing. And if you don't give them recognition, but you give them bonuses, it's often the opposite, it has the opposite effect. There's another values index called the charitable score. If they have a high charitable score, which means they might want to volunteer to soup kitchen. [00:05:14] They want to like donate money. They want to give money away, not get money. They want to give money away. And then they have a low end economic score. That means if you pay them more money than what is comfortable for them. You pay them more than that. They will start to become a worse team member. They will start to self sabotage because they feel guilty. And then they're going to project that and externalize it because they have to justify it. They're taking more money. They don't want to give up the more money, but they feel guilty. If Sarah was my boss, it'd be like, "Oh, Sarah's giving me more money. Well, all right. I have to be worth this. So I'm worth this more money. And you know what? I'm entitled now. And maybe I deserve even more because I'm developing this kind of cancerous blind spot of I deserve this money because I feel guilty. So I externalize it. And I blame that uncomfortable feeling on my boss. Oh, well, my boss is like terrible and doesn't do this stuff. So I deserve that more money to compensate for it." And so they start to find fault with the boss and they start to justify them taking this more money cause they feel bad so that they can feel somewhat okay about it. And then their behavior starts to show that and they start to perform worse. [00:06:23] I know entrepreneurs, you're like, "that makes no sense." But that's how a lot of people think. Most people do not enjoy seeking money. This is not their goal.  [00:06:33] Sarah: There is a caveat team members, they have to have enough to be comfortable, right?  [00:06:38] Jason: If they're starving, broke or hurting, they're not comfortable.  [00:06:42] Sarah: In pain or like worried, like, "Oh my God, I might lose my house or I can't feed my kids." [00:06:47] Like. Yeah. We're not saying, Hey, like give them no money, they'll work for free. That's not the case at all. Right. They have to have enough to feel comfortable to make sure that their needs are met and make sure that they're able to provide for themselves and anyone else or anything else that is important to them. [00:07:02] Once they reach that level though, and I think studies have been done on this, which is really interesting to me I don't know if they just surveyed Americans. Don't know, but I think $75k was like that magic number or $65k. It was something like that somewhere in that ballpark is that's like where people feel like they have most people feel like they have enough. [00:07:25] So once they feel like they have enough money to live and be okay and make sure their needs are met and bills are paid and things are taken care of and like Johnny can do soccer and whatever they, you know, they want to do, they don't then go, "well, now I want a hundred and now I want 200." They don't keep trying to climb that ladder. [00:07:46] Once they feel comfortable and they have to make sure that their needs are met, then they're not interested. So if you take it from 75 to a hundred, they're like, "it's okay."  [00:07:55] Jason: Okay. So the other piece to this, another challenge that I see is that because business owners want people to have skin in the game and they want them to, they think everybody wants money, they hand out percent signs. [00:08:08] This is one of the most dangerous things to hand out. We even made a silly video called, what's it called?  [00:08:13] Sarah: I think it's called Percentage Breaks the Property Manager for the Property Management Business.  [00:08:19] Jason: Yeah. So you can check that out on YouTube. But the idea we're playing this, these roles and I'm a business owner and I don't have money in the beginning, so I'm going to pay her a percentage of all the doors that I get in. [00:08:29] We made it ridiculous, like 50%. Right? Which means if you're handing out a percent sign, and we see this all the time, say Sarah's my employee and I'm the boss, and I hand out 50% or whatever to a property manager.  [00:08:42] Sarah: Or even if you're like, "okay, here have 30," because like even 10, 30, 40, I still, I see the that a lot. [00:08:48] Sometimes I see 20.  [00:08:50] Jason: It doesn't matter what the percentage is, right? The challenge is in a business, some property management companies don't even make 10 percent profit margin. And so handing out percent signs is really dangerous for businesses. So what they'll do is hand out a percent sign. So let's say I give her 50%. [00:09:06] That means my 50%. My, the other half, all of the expenses have to come out of that. And usually if a business has 50 percent profit margin, that's pure expense. So then I'm broke. So what happens is she's making more and more money because she has all upside. It's pure profit. And I have all the expenses do not give a percentage to a broker. [00:09:28] Pay them a flat fee of like five, 600 bucks. Do not pay a percentage of broker. If you don't have your broker's license, don't create relationships or situations where you are giving up a percentage to a property manager. "Hey, you get like 50 percent of each door that you get on when you get a 30 percent of each door," whatever, right? [00:09:46] Because then what happens is these property managers, if they're the personality type of handling property management, instead of doing sales, they are not going to be focused on getting more business on. They're going to be focused on just helping run the business and you're giving them more and more money the more doors you get, which means you're making less and less money, right? They're making more and more money, the more doors that you get. And they will get more and more lazy and more and more comfortable because there's no incentive for them to go work harder or hunt or chase to get money. You need to make sure if you're handing out a percent sign in any capacity, that's like giving out ownership of the business and they need to be invested in like committed to helping you grow this business and helping you move it forward, otherwise they are just dead weight and you're creating a bigger and bigger monster of dead weight as the business grows. This is why a lot of people join a franchise and then regret it later on because they're paying out six to eight percent, which is a lot, of their gross revenue not of profit not of what's left over for you. And some business owners. [00:10:56] That's their whole owner payout. Yeah, that's like top one. Some business owners, that's what they take out like you're giving away that to basically to a team member that's not really adding value. I could go on and on about franchises. You can check out my YouTube video about franchises. [00:11:12] I'm obviously like not a fan of the franchise model because I believe it hurts the entire industry. There he said it. All right. So don't hand out percent signs. Do not get into a relationship with a business partner and give them a percent sign unless they are the type that wants to hustle and grow and make money. [00:11:33] The challenge is I see a lot of business partnerships are like, "here's a percent sign" when they should have just said, "here's your salary. You can be the operator." So operator personality types, for example, systems, process, whatever, they don't usually want ownership. They're not often that entrepreneurial type. [00:11:51] They just want to make sure they're getting paid enough and taking care of enough. Now there's exceptions to this, right? But you don't want to be handing out percent signs to somebody unless it's like super critical for growth. And I do not recommend. I recommend in any way possible, don't hand out any percent signs to anybody ever except to yourself and maybe a salesperson. [00:12:13] Now, let's talk about commissions, right? Let's say somebody is money motivated and they can help you make more money. So if they're money motivated, then you need to be using them to help you make more money. If you're going to pay them a percent sign, but you're not going to pay them a percent sign residually. [00:12:30] Because then you're motivating them to not do more work. What you want from a good salesperson or a BDM, a business development manager, or a BD business development person. What you want from them is what? You want results, which is more doors. You want them to add more money to the business. That's the result you want. [00:12:49] So you're going to pay for them to get more business, not keeping the business because keeping the business is the rest of the team. And that's fulfillment. So don't pay them a percentage residual. You pay them a percentage of maybe the first month or the, like some sort of commission upfront. [00:13:07] And it could be a percent, or it could just be a flat fee. Like, "Hey, we'll give you 200 bucks or 300 bucks or 500 bucks or per unit that you bring on." and give them an incentive. So that means they have an incentive every month. They stay to hunt and to chase. Now, another mistake people make with salespeople is like, "I want to get a salesperson, but I want to have zero downside and I want all the upsides. [00:13:33] So they create another unfair structure where they're like, I will pay you pure commission. And if you don't hunt and kill, you starve. And if you hunt and kill, I make money and we both make money." so I need to address this. That only makes sense if you are giving the salesperson, all of the leads, they have a great follow up and nurture system, and all they do is show up to calls and close.  [00:13:56] Sarah: Now, can you clarify what giving them the leads means? Because you're like, "Oh here's the leads. Like, here's a list of 10, 000 people."  [00:14:04] Jason: Okay. That's not what I mean.  [00:14:05] Sarah: So yeah, exactly. So let's clarify that.  [00:14:09] Jason: Okay.  [00:14:09] Sarah: So 18, 000 people in my CRM. Here's your leads. [00:14:13] Jason: If somebody is going to be paid pure commission, which means they're just paid for basically closing deals, they should not have to go find potential clients. They should not have to be hunting for potential clients. They shouldn't be spending any time doing any of that stuff. They should just be taking appointments, somebody else scheduled for them and closing deals. [00:14:33] Then they're a closer. Everything that happens before that would be handled by a setter and the setter would be cold calling, following up, like all this stuff. Setting appointments. Setting appointments, rescheduling.  [00:14:46] Sarah: Making sure people show up. They don't show up. Right. Calling them again.  [00:14:49] Jason: Feeding the closer. [00:14:51] Feeding the closer. Then the closer can be peer commissioned and the setter would be paid a base, mostly a base, plus a small percentage for each like appointment they set or some sort of results. So they're motivated to get more results and they should be a little bit money motivated, right? Now, most people are going to hire a BDM and expect them to do both. [00:15:11] And if you're going to hire a BDM and expect them to do both, you need to pay them a base. I would recommend at least maybe 20 to 30 K, something like this of a base that covers their setting activities. And then they, the rest, they should be able to make somewhere annually about maybe six figures should be possible. [00:15:30] So work it backwards, but there should be a commission structure that if they're adding 10 to 20 doors a month, they should be able to make. Some sort of six figure sort of salary would be the goal. So figure out a commission on top of that base. Because what you're doing, if you say it's pure commission, you're expecting a closer who lives or dies by whether they hunt or kill and create some money, you're expecting them to starve for at least two months, usually. Because usually three. Because it takes about 90 days to build up a sales pipeline. So they're going to have to do networking and prospecting and outreach and they're working for free and. If they're starving for 90 days, they're just going to quit. [00:16:10] I've seen so many BDMs burn out and it sounds like this great model. "Well, I'll pay you basically nothing in the beginning." And you might get somebody to agree to do that, but they might be stupid if they're willing to do that. And then they're going to be like starving and not figuring it out. And then you don't give them a good system. [00:16:26] If you plug them in to DoorGrow, we can get them making a lot of money. We have an amazing system. Like we had a client in just 10 to 15 hours. We go from zero to a hundred doors in six months. And he didn't spend any money on ads and he was a solopreneur. He was all by himself. This is absolutely possible. [00:16:44] We can help BDMs crush it. We've helped some BDMs add two- three hundred dollars in a year. That's absolutely possible to do but they need to be able to dedicate their time to that and you are not going to get that kind of result if you just pay them a commission because they will only focus on the closing type of activities or the commission generating activities, and they won't do what the leading activities that actually generates the opportunities to close. [00:17:12] And so you're putting too much attention on the wrong thing. They need more attention. Most of the attention should be on the leading activities. Phone calls, outreach, networking that leads to this and then deals will happen. They don't even have to be super amazing at closing if they're doing enough leading activities And so we want to make sure we give them a base and then we give them an incentive to move those things forward.  [00:17:35] Sarah: Okay. Now with the base, this is the big one. "Well, how much is the base supposed to be Jason? I don't know?" [00:17:41] Jason: 20 or 30 K. Maybe  [00:17:42] Sarah: You need to find an amount that would be uncomfortable if that's all you made. It needs to be comfortable enough that if that's all they made, they're not going to be starving and eating out of a dumpster. [00:17:58] And it needs to be uncomfortable enough that if that's all they made, they wouldn't be happy and they would be hungry for more.  [00:18:06] Jason: They need to be hungry. They got to be motivated. It's financial compensation is all about motivation, right?  [00:18:13] Sarah: With a salesperson, when you lay out their commission structure and you let them know like, "Hey, this is your base and I'm giving you this base because of these reasons. I don't want you to be starving. I want you to be motivated. The real money, it's over here. This other piece, I'm going to give it to you because there's things like phone calls and settings and appointments and you know, all the stupid crap that you don't want to do, but that you will do because it leads to deals." [00:18:38] And they're like "yeah, I get that. But the real money is over here. So when you close deals, that's when you start to make money." And when you dangle the carrot in front of a great salesperson, they will jump off a freaking cliff to get it. The problem is if you just give them the carrot and you're like, here, have a 50, 000 base, have 100, 000 base, have a 200, 000 base. [00:19:03] They're like "Yeah. I don't need to work that hard. I mean, if I do nothing, I still make 50k." We just at the boardroom event, we had a client whose BDM has a 50, 000 base.  [00:19:13] Jason: And then he was wondering why they weren't super motivated.  [00:19:16] Sarah: She doesn't really, she closed like two doors a month. And I'm like, well, yeah, cause she's comfortable. [00:19:22] She's super comfortable there. So she's never going to be motivated to work harder and do more and stretch herself and go above and beyond. Because she doesn't have to, you gave it to her. I have to work for it. There's a difference. And the other thing is salespeople who they love the challenge. They don't want you to give it to them. [00:19:43] They don't want it. Like they'll tell you like, "Oh, I'll take 500, 000 a year for doing nothing." But they wouldn't really be fulfilled by that. They'll probably take it because they love money. I mean, who doesn't, but they wouldn't be fulfilled by it. Yeah. If you give them 500, 000 for doing nothing versus if they make 500, 000 because of the work that they did and because of their efforts, there's a big difference. [00:20:06] They're going to feel really proud of that and they're going to want that. So they're going to chase it. So you have to dangle the carrot and make it something that's interesting enough. You have to, you, and you have to set it up so that they have the ability to make at least six figures because that's what sales people want But don't just throw it to them.  [00:20:24] Jason: And to be clear No, bdm should be making five hundred thousand dollars.  [00:20:28] Sarah: That's not accurate at all. [00:20:30] Jason: There's really great bdm. Maybe if they're helping do some acquisition deals If they're adding 500 a year, maybe all right So but if your bdm can live comfortably without adding 10 doors a month, your commission structure is wrong. They should be minimum adding about 10 doors a month as a full time BDM minimum. [00:20:52] And they should need to do 10 doors a month in order to just reach comfort. And if they're really motivated, they'll do even more than that. They'll do even more than that because then it gets exciting, right? Then it's the game, right? It's the hunt. Okay. So we talked about compensation. [00:21:08] Is there any other challenges or mistakes we see people make compensation wise?  [00:21:13] Sarah: I think those are the big ones. I think let's though, before we wrap up, let's talk a little bit more about the recognition piece and then we'll close it out. Okay. Because people are like what do you mean recognition? [00:21:25] Like, "Hey, I see you." [00:21:26] Jason: So recognition is a process of just helping the team members be seen, especially in front of other team members for doing good things or accomplishing things. So the way that we do that in DoorGrow and in our operating system, DoorGrow OS. Maybe you've heard of like EOS or traction or some of these things. [00:21:43] DoorGrow OS is better. And what we do in DoorGrow OS to increase the amount of recognition is in every meeting we share wins. So if it's our weekly commitments meeting, we're sharing what wins did we have last week and everybody adds to the list. What did we do in our monthly goal setting? [00:22:03] We share wins for everything we did the previous month. Same thing with the quarter and annually, and it's pretty awesome. Like, we're building these lists and everybody feels great. And then even in our daily huddle meeting, which is like a 15 minute, 20 minute meeting we do every morning, I guess we do ours in the afternoon, but we do with our team. [00:22:21] We do Caught Being Awesome and we allow team members to share their wins or to highlight somebody else. And so our team are highly motivated because most of them are recognition motivated. So we're recognizing them. If we do give a bonus, like say for the holidays or something like that, we do it in a way that the focus is we wanted to recognize you because of what you've done for us this last year. So it's still about recognition and appreciation. And so that will get you team members that are incredibly loyal to you, that love being part of the team, that feel a sense of belonging, and that means a lot more to most of your team members than getting more dollars. [00:23:04] Is that good?  [00:23:04] Sarah: They want to feel important and they want to feel valued and they want to know that you care about what they're doing and especially in an industry like property management because it's tough. Yeah. Everybody has those like really awful days because let's be honest, sometimes owners or tenants or vendors and sometimes life just happens, right? [00:23:27] So it's tough and sometimes it's tough. All the time or it's tough for a while. This is not an easy industry. So when you've got this pressure all the time and this like annoyance, like, "Oh, that tenant's going to call me and yell at me again, or, Oh, like, Oh, I have to have this uncomfortable conversation and tell my client that we need a $15,000 sewer repair. [00:23:50] I don't want to do this." The it's the little things that will keep your team going and make sure that they understand like, "Hey. I know it's not the most glorious thing. I know it's always not super exciting, and it's not always super easy. However, what you're doing really makes a difference. It really is important and this is like the bigger mission and vision of the business and you contribute directly to that vision and what you're doing matters." [00:24:22] So that way it's like, Oh, you know, it's not this grind and this drain and we don't have a lot of churn on our own team and burnout and you know, bad team members that are like, "Oh, I hate my job." Right. Because that's super easy. It's easy and then you make it even harder. It's easy just by itself and then you make it harder because it's property management. [00:24:43] So it's super easy in property management to have that. So let's combat that. And just by recognizing them and saying like, "Hey, I saw you took care of that thing. Like, hey, oh my god, you got all the leases done. And hey," like, and it could be the littlest things. It's things that they do. Anyway, it doesn't matter. [00:25:00] They don't have to do anything that's like spectacular. "Oh my God. You like cleaned all the bathrooms today, Sally. Thank you. That was amazing. Like you didn't have to do that." It's little things and it's things that they're going to be doing anyway, but just let them know, "Hey, I see it. And I appreciate it." [00:25:16] Jason: All right. So the other thing I'll say about recognition is you might be thinking, well, salespeople and entrepreneurs, do they like recognition? The answer is yes. They like it too. We still like it. They like it too. So if you're giving them recognition that adds more fuel to the fire, right? And so you need a system like DoorGrow OS in which everybody gets recognized for their accomplishments and everyone will perform and behave better because they feel seen by everyone. [00:25:42] And that has value, right? Now one more point I want to make is you might get somebody, an assistant, you're like a VA, you're like they're amazing. I love them so much. They're so awesome. I don't want to lose them. And then you are like, because you're hardwired to be so money focused, you're like, I'm going to pay them a whole bunch more money. [00:26:02] I see this happen so often. Be very careful about just giving out raises prematurely. Be very careful about this because what I've seen over and over again, I've been in masterminds, multimillion dollar business owners, we're hanging out together and they're like, "Hey I just got this assistant. She was super amazing. So I gave her this big raise 'cause she's so awesome. And now she's showing up late. She's not like getting things done. She seems like entitled." This is what happens when you compensate people financially, instead of giving them recognition and doing it based on how you think instead of what they want, you then sabotage their efforts or they start to sabotage their efforts. [00:26:43] So don't start paying somebody more just because you like them, right? There needs to be a justifiable reason and they need to be able to justify that reason. And so they may need to come to you and be like, "Hey, here's why I deserve more compensation." And you're checking in with them regularly and saying, "Hey, how are things going?" [00:27:01] And if you have an open communication with your team members, they're going to tell you when they feel like it's time that they deserve some more money. And it's going to be really uncomfortable for them to do it if they don't like money, it's going to be so uncomfortable to have that conversation, but it's also uncomfortable for you to spend more money. [00:27:17] Team are the biggest expense. Your discomfort in giving somebody a raise should be equal to their discomfort in asking for it. It's my thought. And so they need to be reaching out. To some degree, and you may recognize somebody deserves more pay, you know, deep down they're being paid too little. [00:27:36] So then you can give them a raise, but be careful about handing this out.  [00:27:40] Sarah: My other little tip with raises is I worked in corporate for a bit and it was like every year, you know, you're going to get a raise and how much of a raise you get depend, depend on all your stupid numbers and metrics and all, you know, call time and all that stuff. [00:27:55] So you knew you were getting a raise though, like for sure, unless for some reason they're firing you, right? But other than that, you know, like, "Oh, my annual review is coming up. How much money am I going to make now?" And then they expect it. And then you don't really appreciate it because it's expected. And it's like normal now it's like, "Oh, well I'm getting a raise now. [00:28:13] Now I'm going to raise." And then. What also happens is, "well, I'm getting a raise," and sometimes people go, "Oh, well I deserve like this much." And then they don't get that. They get less. And then they're like mad about it. They're mad because they're making more money. It's not as much money as they wanted or as I expected. [00:28:30] So one of my big rules when it comes to raises is with raise comes responsibility. Don't just throw out more money. Like, "Hey, if you want to go from here to here, I'm happy to take you there. This is what that would look like. Are you in?  [00:28:44] Jason: Okay. One last thing. Titles. Titles are heavily connected to compensation. [00:28:49] So I dealt with this week. I talked to a property manager. They had like 20 doors or something and they hired a director of operations. No. You can't afford a director of operations. So the thing is, yeah, I said, "tell them they are an operations assistant in ecrow." And said, I gave you this inflated title. [00:29:06] You're an operations assistant. Maybe then eventually they could graduate operations manager. Maybe then be the, you know, maybe eventually. The director of operations, VP of operations, COO, but titles matter. So be very careful about handing out titles. Start everybody out as a something assistant or junior  [00:29:24] Sarah: property manager, junior assistant, property manager, or you can just have levels, property manager, one property manager, two property manager, three, like. [00:29:32] There's a lot of different ways you can do it. Be careful about titles. Yeah, be super careful about  [00:29:36] Jason: titles. Because they'll go look it up on salary. com and they'll be like, "Oh I deserve this. I'm director of property management. I guess I should be getting 150k or whatever, right?"  [00:29:46] Sarah: And also, 20 doors, fun little caveat. Be careful when you're reviewing resumes with titles for the same reason. Because titles they sound really impressive sometimes and they mean they could be made up They mean nothing when I got hired at an insurance job. They were like, oh we have to make your business card And I said, "okay," and they said "well, what do you want your title to be?" [00:30:05] And I said, "I pick my own title?" And they're like, "yeah, you can put whatever you want on there." And I said, "well, aren't I a sales rep?" And they're like, "yeah, but don't put sales rep." I'm like, "oh, okay. So what should I put?" They're like, "put like account manager or account executive or like something like that." [00:30:24] So I don't remember what we came up with, but. Came up with something that sounded like I was like, "Ooh, I'm a big deal." I was a sales rep. That's it. I sell things. That's it. But the title sounded a lot more impressive. And sometimes that can go to people's head just a bit. And keep in mind, money is connected to the title. [00:30:45] It always will be. So get on. And if you're like, "well, I don't know what to," Google will help you just get on. Well, I just had this conversation, I think two weeks ago with client. " Well, I don't want to hire like the COO of the company. I can't afford that." You're right. You can't. So. [00:31:00] What are they doing? Maybe they're the team leader. Maybe they're the office manager. Maybe they're an operations assistant. Like get on, find some kind of title, get on Google and say, what are other job titles for this thing? And it will tell you and pick one of those and avoid things like manager, juror, and like VP president or like, Senior account executive, things like that. [00:31:26] Because it. It will be startling if someone. Looks at their position and realizes. "Oh, I should be making 125 and I'm only paid 55. Huh? That's odd."  [00:31:38] Jason: All right, so wrap us up. Give us a call to action. [00:31:41] Sarah: Just If you feel like you're struggling with any of this and I know there's so many of you that are like, "oh man. Yeah, that's me." [00:31:48] I might have made some of these mistakes and that's okay because we all have we've done it to Go on doorgrow. com Book a call with us. We can help you with this stuff.  [00:31:56] Jason: This is what we do. Yeah, and if you made any of these mistakes, I guarantee there's a lot of others going on in the business you can't see right now. [00:32:03] We can help you get this cleaned up and help you make a lot more money, help you grow a lot faster. All right. All right until next time, to our mutual growth. Bye everyone. [00:32:11] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:32:37] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Several property managers find themselves feeling alone in their difficult market. It might feel impossible to grow after being stagnant for so long. In this episode, property management growth experts Jason and Sarah Hull sit down with DoorGrow client Brian Bean to talk about how he grew his property management business despite the challenges he faced. You’ll Learn [01:55] Getting started in property management [06:20] Making business partnerships work [09:47] Shifting from real estate to property management [18:21] What’s next for your property management business? Tweetables “It's really difficult for partnerships to be successful because for most people, the ego is getting in the way.” “What you focus on is what you get.” “Until we learn how to get and find people that we feel safe with, I don't think we're supposed to trust.” “When you get really great people, it's not hard to trust them.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Brian: After 10 years of just being flat from 30 to 35 units. And then now literally doubled it last week. And that's been from following your instruction, your philosophies and you know, focusing on building this business.  [00:00:15] Jason: Welcome DoorGrowers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrower. DoorGrower, property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not, because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. [00:00:58] We want to transform the industry, eliminate the BS, Build awareness, change perception, expand the market and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, co owner and COO of DoorGrow. Now let's get into the show.  [00:01:18] So our guest today we're hanging out with Brian Bean, who is one of our clients and Brian your company is Dream Big Property Management.  [00:01:28] Brian: That's right. We're in Merced, California.  [00:01:30] Jason: All right. In Merced, California. So Brian welcome to the show. Oh, Riverside. You said Riverside. [00:01:37] Okay. Got it. I know this area. So yeah, I grew up in Rancho Cucamonga. So just a little bit near there. So Brian tell us a little bit about your journey and how you got into property management and then eventually how you stumbled across DoorGrow, I guess.  [00:01:55] Brian: Right, so, I was a newspaper editor and reporter and I got a job, grew up in the Pacific Northwest, got a journalism degree, got a job in Palm Springs on the Daily Newspaper, and moved to California in the 80s. [00:02:11] And so I did that for 13 or 14 years toward the end I, you know, coming from an entrepreneurial background, my uncle gave me my first, second, third job when I was a kid he owned a, like, old style service station. So I grew up in that small business atmosphere. And when I went to work in newspapers, you know, I had these lofty aspirations, these utopian ideas, you know, you're getting your twenties about doing something to change the world or, you know, to have an impact. And I found out after about 10 years, that was just, it's just another corporate job. And so I was looking around for something else and I looked at a lot of different businesses. [00:02:55] And I ended up coming upon real estate and I was able to, while I was a newspaper editor, I was able to buy five, two five unit apartment buildings in Palm Spring. Nice. And that was my introduction to property management. I was pretty much doing that during the day. We were putting out newspapers in a, from like three in the afternoon to midnight, you know, the press would roll at midnight and and I did it all, you know, I, from everything from dealing with the tenants face to, you know, patch and drywall to whatever collecting rents, chasing rents, made all the mistakes. [00:03:33] And I was, it was self education trial by fire. And then a few years later, I went into real estate full time and sales. I had a partner in the apartments who was actually the listing agent on those apartments at the time, but he invited me into real estate full time in 2001. [00:03:49] And then we were off on a, and it was a run. And so I, I did property management for a while from on our own properties. And then I've just morphed into sales and we were pretty successful and very busy and then the market crashed, and you know, we just kind of moved with the market.  [00:04:08] Jason: And when was that? [00:04:09] Like 2006,  [00:04:11] Brian: maybe, or?  [00:04:11] Yeah. So 2006 at least in our area, it was August, 2006 when we peaked sales wise. And in 2007, we had, I don't know, a dozen listings and nobody, you couldn't buy a showing, you know? And so 2007, it was the real estate market was, you know, dead man walking. It was, there was nobody really knew what was happening? Well, the masses, right? Some people knew, right? There was stuff going on obviously on wall street, but, the masses didn't know what was happening. Prices stayed up for awhile and they were, it was just like that, that hovering just before the, you know, you throw a ball in the air and it just kind of floats at the apex for a moment right before 2008 and then wow. [00:04:54] Right. Who knew? Yeah. So, You we just kind of morphed with it. I've worked, I did a lot of, I helped a lot of people with short sales, we worked in foreclosures and. And then I met my current business partner in sales working in an REO house as a buyer's agent. And we started our own company, Dream Big Real Estate, and that was 2008, 2009. [00:05:15] So from there, a couple of years later I just happened to say to my partner, you know, even though we were very busy, I said, "I really think we should launch a property management division" because at that time, my mentality was, it's a place where we can create sales listings, right? [00:05:35] And so we did that for a few years. And, you know, the interesting thing about it was that we didn't do any marketing. It was just really word of mouth, but. The day that I mentioned that to my partner, Tim, he just said, "yeah, cool, whatever." Right. he knew I was going to probably be working on it because I had the background in it, but I didn't tell anybody. [00:05:55] And the next day the phone rang and our first property management client just was calling out of the blue. Still have them, still work with them. [00:06:03] And then a week later, somebody else called. And it was the same thing, and that was our second client. Still working with them as well. And the, you know, I'm not into rubbing crystals or sleeping under pyramids, but you know, you ask the universe and the universe will provide. [00:06:19] Jason: One of the things that you mentioned, Brian, that I think's really interest is, it sounds like part of your journey, like there's this importance you've probably realized in partnerships. [00:06:28] because you've mentioned multiple times, you know, you partner with the listing agent and then eventually you partner with Tim. And so how is finding the right partners been instrumental in your growth and your progress? [00:06:41] Brian: Well, I will say this is that later on more recently, this year, they have broken out the property management business that was running as part of our real estate sales business. I've broken that out separately, and I'm now solo doing that. Right. Have had partners in the past, and I have found working with partners to be that there's advantages and disadvantages. Totally. It's hard to find, it's really difficult for partnerships to be successful because most people, the ego is getting in the way or, you know, there becomes a battle about, you know, who's doing what, who deserves this, who deserves that. [00:07:24] Yeah. Personality wise, I'm kind of roll with it person, you know? I'm more of a solution oriented person. Just what we need to get from point A to point B, what's the best way to do that? What for the good of the company, not necessarily for what's best for me personally. Yeah. So I've gone through a couple of partnerships with different people, I have been able to make that work from my point of view, because. [00:07:49] Because of my personality type, I think, but it is not for the the weak hearted, you know, I mean, it is some days are a lot harder than others.  [00:07:58] Jason: I've seen some of the most successful I've seen have really healthy partnerships in some of the worst situations I've seen where they couldn't grow because one was like an anchor, not willing to move and they had just as much decision making power and until they were able to get that partner out of the business, they weren't able to progress. So it can be a boost in the positive, but it's really difficult to find a really good match. [00:08:24] Brian: Yeah, and that's the thing is like, I'm more of a behind the scenes person, just in general, I'm more like I can implement. I generally will have the ideas as well, but I'm the one that I'm kind of a control freak, quite frankly, and so one of my character flaws is right now that I'm trying to work on is feeling like I need to touch everything, you know, because that's that is a throttle in the business. [00:08:48] Jason: Well, I think we all start there. Every entrepreneur starts there, so everybody listening should be able to empathize with that because you know we want to do a good job because we care. We want to look good. We care about how we look right like whatever it is. The challenge with being a control freak is trust and until we learn how to get and find people that we feel safe with, I don't think we're supposed to trust, you know. We're not supposed to just trust blindly. We need to find people that deserve to be trusted and know how to build that team. And that's probably kind of the next level, right? Is for you maybe is to build that team of people that you trust because when you get really great people, it's not hard to trust them. [00:09:30] Yeah. But they need to match you. Like they need to be a good coach. And then it's a lot easier to trust them. And so in this journey, you split out your business and then you have a property management business. It's all yours. You're still doing real estate stuff also? You still connected to that? [00:09:47] Brian: I am, but my mentality has shifted. It's probably been more than two years since the first time I talked to someone from your company and yet we didn't start with your company until, when was it, March this year? It was a two year lag of wrapping my mind around the philosophy of, Just making the shift, right? [00:10:06] Because property management always for us was a, just a holding place for future sales listings. And now, it's the business. Property management's the business and sales is ancillary benefit.  [00:10:21] Jason: So what prompted that shift? How did your brain work that out eventually?  [00:10:25] Brian: I think it's a combination of a variety of things. Having now 20 plus years in the business, I've been through an up and a down and an up and a flat, right? Who knows what the next one looks like. Is it eighties, nineties, or is it two thousands downturn? Yeah. And where I am in life, right. And I mean, do I want to work forever? Just slinging, right? Do I want to be out there, you know, showing, opening doors at, you know, 68 years old? [00:10:57] Jason: And chasing deals? Yeah.  [00:10:59] Brian: So mailbox money, right. Building a business that's sellable. Right now, or up until this point, I should say, it has been 100 percent every dollar that comes into our house is product of my labor, and that is a train coming down the track. [00:11:19] Right. So I needed to make some changes now that would have dramatic impacts on my future. If I wanted to change what I was doing, you know. [00:11:27] Jason: Yeah. Got it. Yeah. That switch from kind of recognizing you're kind of trading time for dollars to realizing, "Hey maybe I want to build something." [00:11:36] I mean, it's really tempting because you close one real estate deal, that can be a lot of money, but eventually I think there's a lot of real estate agents that wake up to this, that they're like, "Hey, if real estate kind of takes a nosedive or do I want to do this forever?" Maybe not. [00:11:52] Property management might be a really great business model.  [00:11:55] Brian: Like I said, we did our sales under under Better Homes and Gardens now, and I don't know, did I say that? Maybe in my own head. So the property management is under my own brokerage. The sales that we do, we work under Better Homes and Gardens. [00:12:10] I, you know, Tim and I as sales agents here until this year, we've been the number one agent, like since we came here. So seven, eight years, however long it's been. I do see the changes. I have seen the changes come in and perhaps it's a little bit of you just mental scar tissue from the crash of, you know, '8, '9, '10, ' 11. Yeah. It's just, you know, because the cracks have been forming in the foundation of this real estate sales market for a few years. Right. And it's been propped up artificially by government policies. Yeah. For three, four years. Right. And so, I've been waiting for a shoe to drop quite frankly. [00:12:51] And so two years ago a guy used to work for you, Jon. I called Jon back in like February this year. "Hey, Jon, you still working over at DoorGrow?" Jon was actually the one who said to me two years ago, two and a half years ago now, " if you do this, our expectation is that you're going to change your philosophy. You're going to be a property manager who doesn't do sales." What? That took me a while to embrace.  [00:13:17] Jason: Yeah. Yeah. Jon's a good friend of mine. We just went out to lunch recently. He's really sharp, dude. So, you know, I'm really curious, Brian, this journey from being a reporter for a while to real estate, to now shifting your identity into being a property manager, and that's the focus. How do you feel the reporter in you helps the property manager?  [00:13:44] Brian: Yeah, perfect proving ground. It's who I am is based on education, information gathering, being an advocate for consumers, right? [00:13:56] That's what I was trained to be as a reporter and editor, as a journalist, and that just morphs perfectly into what I do now, which is to look after my client's financial well being, right? And it doesn't hurt that I tend to over explain things, right? Because that's what I do, right? Is my job is to go out and gather information and then provide it in an objective way so that people can then make the best decisions for them and their family, right? So that's being a reporter, right? It is to shine a light on the facts so that people can decide. I mean, sometimes you got to take them by the hand and lead them down the path, right, educating them along the way. Yeah, for sure.  [00:14:37] Sarah: So what was the thing that made you go, "all right, I'm finally going to do this. Like I'm going to jump on board, get involved with DoorGrow and start really focusing on this property management thing? [00:14:49] Brian: Yeah. So earlier this year I had been kicking around, you know, you're looking at numbers, right? Kicking around the idea of "how much more time do I want to do this?" [00:14:59] And there were some personal things that got into it too, because you start looking at relationships and your family and looking at the things that are most important in your life. And priority wise, where have they been on your list? And so I decided I wanted to make some changes and then I lost some friends and family members just in the past year. [00:15:25] And so, one of the things that I picked up in the newspaper was Spending too much time in the office and and spending the less time seeing family and, you know, coming out of COVID and just, it's just like a combination of a lot of things all crashing together at one time.  [00:15:41] Sarah: We are under attack in our house right now. [00:15:43] We have groceries being delivered.  [00:15:45] Jason: Dogs are going nuts. [00:15:49] Our professional podcast, everybody, so.  [00:15:53] Brian: Anyway, so that was you know, some personal stuff came up and I decided to reevaluate. Now, in the past 10 plus years, I've been doing property management. [00:16:04] providing a supply of say two to six listings a year and making that shift. I don't know, it was a conversation with my wife and you know, running numbers and trying to figure out like, is it even possible? And there's a transition period because what you focus on is what you get. Right. So if I start focusing a hundred percent on property management, and how is that going to affect my income for people? You know, because what I do today in sales, that's not income for 90 days. Right. So at some point you have to be able to make that transition. And so, you know, it was a bit of a leap of faith. [00:16:42] And so, like I said, when I called Jon to ask if he was still working with you guys, then he said, no. He called me back though, but he said no, but he then referred me over to somebody. So, but making that switch, it wasn't an overnight decision by any means. [00:16:58] I agonized over it. It was sleepless nights, some nights. But I knew that I had to do something.  [00:17:04] Jason: So, well, you took a big risk then this leap of faith and then jumped on board with DoorGrow, decided to focus on property management. You feel like you made a good choice? [00:17:14] Brian: Yes. You don't know what you don't know. And so, I've been on a journey of learning what other people are doing, best practices, ancillary services to go along, you know, support type pieces of everything from other streams of income that are related that are, you know, not just management fees and placement fees, right? [00:17:37] I mean, there's a variety, but it's crazy what I've implemented just in the past six months, it's just been an insane pace and now I'm like eight days away from moving to a new, property management portal, and that will be the cherry on top, really. Most of the footwork of putting the foundation together will be mostly done, and then it's digging into processes. [00:18:02] Jason: Awesome. Yeah. So. Yeah. So you've made a lot of changes to your business and you said you've been learning it at an insane pace. So hopefully we're not making you bored with all this stuff. We've got plenty of stuff, right? It can be a bit overwhelming. We give the feedback on. So Brian, well, what's what's next for you in the future? [00:18:25] Brian: Right now I'm just trying to continue to learn from you and I'm just focusing on growing the number of doors that we manage and creating a business that will have sustainable and continuous growth and then part of the process has been, yes, putting the tools in place and doing the things that you know, I've been advised to do to create this and grow this business. [00:18:53] But when you start, you don't necessarily believe it, right? It truly is that leap of faith. And over time, my belief is starting to catch up with my activity. And so, you know, to go like when last week we literally hit the doubling point of when we started with you and after 10 years of just being flat from 30 to 35 units. And then now literally doubled it last week. And that's been from following your instruction, your philosophies and you know, focusing on building this business.  [00:19:30] Jason: Yeah. Well, I'm glad that the next 30 doors didn't take 10 years. That's awesome. Doubling in four months and I think things will speed up from here. So, well, I think that's a good place to end on. I think that's really awesome. So we appreciate you as a client. It's been great seeing your progress. You know, I think there's a lot of property managers out there that are like you, they come from the real estate industry. They want to get out of the hunt and the chase. Maybe they've been doing property management for even a decade, but you know, they haven't really made progress in their growth significantly in the last year or two or three or 10, you know, and and now maybe it's time, maybe it's time. [00:20:10] So maybe some parting words, Brian, what would you say to those that like they've been watching DoorGrow for a while? What would you say to them?  [00:20:17] Brian: Don't wait. You know, where would I be if I'd started two years ago? . I think about that occasionally, and then I have to stop myself because that just takes me off track. [00:20:26] And you get into that regret, you know, loop in your head. Like, no, I don't have time for that. I am where I'm now. And everybody is where they are now, right? And so you can either take action today or not, your results will reflect that. Yeah.  [00:20:42] Sarah: And you're exactly where you're supposed to be in that moment. I can do that to myself too. I can go back and go, "Oh, what if I did this sooner? It could be so much farther." Right. But I think that things just tend to work out the way that they're supposed to work out and things kind of line up. And I think you were prepped, right? [00:20:59] You knew about DoorGrow. You were kind of checking it out. You weren't sure if you were going to make that jump and you did when you were ready and it paid off.  [00:21:06] Jason: Yeah. So, there's a cool book called the gap and the gain. And the idea is that it's so easy for us as entrepreneurs to focus on the gap between where we should be by now. Where our dream or what we could have done. And that's not really an effective comparison psychologically. Like that, like doesn't make us feel super great about ourselves. But what is effective though, is to look at the gain. How far have we come? And I mean, four months. You've come a long way. [00:21:34] And so the next year, I think it's going to be really awesome for you. So I'm excited to see what you do, Brian. So thank you. All right. Thanks for coming on the DoorGrow show.  [00:21:44] Brian: Glad to be here. Thanks.  [00:21:46] Jason: Thanks again. All right. If you are a property management entrepreneur, you're wanting to grow your business. [00:21:51] Maybe you've been sitting stagnant for a while. You haven't had significant progress in the last year, maybe the year before that you might even be a really large company and you're not making progress. I've talked to several with thousands of doors in just the last week. We just got one of them on as a client and they've been struggling to figure out how to grow and they cannot even spend any more money on ads to get any more clients.  [00:22:13] It's not working. If you want to figure out how to start moving your business forward significantly, we can easily help you add 100, 200, maybe even 300 doors in a year. And it's without wasting money or spending money on advertising. And that might sound ridiculous, but Brian's going to do it. [00:22:29] Like we're seeing people do it all the time. So reach out, you can check us out at doorgrow. com. We would love to help you grow your business. Talk to you soon. Bye everyone. [00:22:39] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:23:06] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Jason Hull, property management growth expert, joins Tom and Diego from Calvary to discuss how property management entrepreneurs can improve maintenance processes at no cost. They explore the benefits of innovative strategies, the challenges of maintenance, building strong vendor relationships, and methods to grow property management companies.

Have you been looking for ways to improve your owners’ experiences as property management clients?  In this episode, property management growth experts Jason and Sarah Hull sit down with Matthew Kaddatz from Appfolio to talk about elevating the owner experience in property management. You’ll Learn [01:35] Getting started in the property management industry [05:18] Improving relationships with owners and investors [10:24] What does your ideal client look like? [18:31] Why you get stuck doing things you hate [26:25] How elevating the owner experience helps you Tweetables “Once property management gets you, you're stuck. You're not going anywhere.” “I think one of the biggest mistakes property managers make by not having clarity on who their ideal customer is they try to get everybody.” “‘No’ is often better than ‘yes’ if you're being careful and focused.” “I don't think that you can really figure out a lot about your clients and what they truly want, what's really important to them, if you're unclear on what you truly want.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: I think one of the biggest mistakes property managers make by not having clarity on who their ideal customer is, is they try to get everybody. Then they're taking on a lot of accidental investors and they churn out like after a year.  [00:00:12] Welcome DoorGrowers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you are open to doing things a bit differently, then you are a DoorGrower. [00:00:28] DoorGrower property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, my wife, co-owner and COO of DoorGrow. [00:01:11] Now let's get into the show. All right. Today's guest. We have Matthew Kaddatz from Appfolio. So Matthew, welcome to the show.  [00:01:22] Matthew: Yeah. Thanks for having me excited to be here.  [00:01:25] Jason: So we have not yet had somebody from AppFolio, but we have a ton of clients that use AppFolio and we've heard great things about it. The perception has always been, it's the Mac of the property management software out there. [00:01:37] So, Matthew, why don't you tell our listeners a little bit about you? How did you get into property management into this industry? And and you know, what do you do at Appfolio?  [00:01:48] Matthew: Yeah. So, I've been in property management pretty much my whole professional career. I studied computer science in college, realized I didn't want to be behind a computer all day and knew some developers developing some land, and they were looking to turn over the management and there weren't a lot of local operators. And I was like, "Oh, I could do it." You know, naive, 22, and 2006, right? So that all thought the best way to make money is real estate. It's 2006, everyone was making money right at the brothiest point in the industry. [00:02:23] And I went down and started the property management company. These developers were my first contract and I ended up really liking the business, building the business. I grew it in the local area, did property management, community association management, a little bit of short term rentals, small, little, mostly second home market. And had a fun time growing it. Ultimately, I ended up selling it to an outfit out of Texas called Associa, and was looking to do something else and found my way to AppFolio.  [00:02:58] Jason: All right. Now you are then, based on the numbers you shared, you're about to hit the big 4-0, right? [00:03:05] I am. And did you ever think as a kid when you turned 40 someday that you're going to be doing property management stuff? [00:03:13] Matthew: No, never. Even when I sold my business, I stayed around for two years and was looking for something else. I looked hard to get out of the industry. I wanted something different and the furthest I could get was a technology company that provides software for the industry. [00:03:31] And you know, I joke around once property management gets you, you're stuck. You're not going anywhere else.  [00:03:37] Jason: You know, a lot of property managers joke about it and they complain and they throw out memes like about drinking wine is solving their problems, you know, and stuff like this. But I fell in love with the industry because I love how, 1. MRR is a beautiful business model. Yes. It's monthly residual revenue, right? It's the ultimate business recurring revenue, monthly recurring revenue. And I love the residual income of a coaching business and property management is similar. [00:04:07] And so what I love about the property management industry is that it is it's similar to me, right? The people that I get to serve and they're my people. They're a little bit nerdy sometimes. They tend to like technology to some degree, or they have to at least use it. And they they're entrepreneurial and they're not just the sales oriented person that's just hunting and chasing the next deal they want to build. That recurring revenue.  [00:04:35] Matthew: You know, the SAS business model, like technology, like AppFolio is very similar as well. The parallels and just how we think about our customers and how our customers think about their customers are wildly similar, which I think gives us some insight into just how to build great software. [00:04:54] But I too am obviously attracted to the business model. It's a really good business model. You're not always hunting for that big fish to get or whatnot. You have predictable revenue and that gives you some comfort to take a step back and kind of think about what I truly love is like strategic priorities. [00:05:16] Jason: Yeah, it creates some stability. So the topic we're going to get into today is elevating the owner experience. And so, where should we start with this? [00:05:27] Matthew: Yeah, good question. So I've been my job at AppFolio is to really focus on small business property managers and make sure we're building product for them. And I've been doing this for two and a half, almost three years now here. I've had other jobs AppFolio, but this recent gig has been really focused on the small business property managers and you know, six to eight months into the job, I realized the owner of the property is just so fundamental to how the SMB industry works, which is less true as you go high up market into like large multifamily. The relationship between the property manager and the property owner is just so important, and I think really understanding that dynamic from my perspective, like helped us think through how we're going to innovate and build software to make those relationships better to leverage software. But what got me more excited was just learning how great property managers think about this, how they think about acquiring these people, how they think about onboarding these people, how they think about retaining these owners and how the group of property owners, it's not a homogenous group, right? Like there are different subsets. [00:06:50] A person who owns five four plexes is going to think and operate different than a person who had to leave town for work and is giving their house over to property manager because they had to leave town for work for a period of time. So just understanding the dynamics there is really important. [00:07:13] And the great property managers, I think do that well, but it's amazing how many people don't think carefully about who their clients are, what their interests are and how diverse they can be.  [00:07:24] Jason: What do you think are some of the most common mistakes people are making? In the small business category with their owners? [00:07:32] Matthew: I think they're pushing to either one of two polarizing extremes, right? Like one size fits all, my services must fit for everyone in which like they don't because it's not a homogenous group or, I will be everything to everyone which doesn't scale. And that's probably the more dangerous thing. I think property management tends to attract people great at customer service who like to say yes and hate to say no, and it's hard to not be every thing to everyone. If that's just sort of your disposition that got you to be very successful at providing great customer service, you can't grow a business that way. [00:08:15] You can't scale a business that way. Once you have to hire people to manage owner relationships.  [00:08:20] Jason: Yeah, we see these problems as well. The one size fits all usually relates very simply to how property managers are pricing. Like everybody's like, "we'll just charge 10 percent or we'll just charge a flat fee." [00:08:32] And one of the things that we teach is this three tier hybrid pricing model where you're focused that psychologically on at least three different types of buyers based on their motivation or based on their pain psychologically so that it's not just one size fits all. It's tailored towards the pain threshold when it comes to spending and it's tailored towards, you know, the level of service or safety and certainty when it comes to like what they're hoping to spend money on. [00:08:58] And so that's really interesting. And then you mentioned: don't be everything to everyone. So I have this slide and one of my slides in my pitch deck says "you're not Burger King." " your way right away," right? And so "don't be Burger King" is what it says. So, and the opposite is like to be the lighthouse, right? [00:09:16] The lighthouse is guides, but it doesn't move, right? It has boundaries and standards.  [00:09:22] Matthew: Yeah. So many great operators have done too much of everything to everyone and they get to what, 300 ish units and they can't figure out how to get beyond. They just can't figure out how to scale because. It actually costs a bit of money to go from 300 to 600 units. [00:09:40] You have to like reorganize a bit.  [00:09:42] Jason: That's funny. We call the stage between two to 400 units, the second sand trap.  [00:09:49] Matthew: Yeah.  [00:09:49] Jason: Interesting. It's basically the swamp of success. We call it the team sand trap because usually it's because staffing costs are so high at this stage, they end up stuck and it's usually they think they need more processes. [00:10:02] But what they actually need are better team members.  [00:10:04] Matthew: Yeah, and I would argue higher degree of focus. Yeah, the way I like think about my customers is I get very clear on who they are and what they care about. So, you know, AppFolio is a large company. [00:10:19] We have lots of customers and as much as we'd love them to be homogenous, like all the same property managers are very diverse group of small businesses. So it's really important for me to understand the profile of business that I'm solving for what type of product and service are we building for that specific profile? So much so that I want to be so intimate with that profile of customer that if I meet them, it's easy for me to have a conversation with them. I know what their common pains and challenges are. I know what they care about. Like I could talk to them for two hours and they were like, "Oh, it felt like I've known you forever." That's how like close I want to understand their types of businesses. [00:11:04] And I think that's similar for property managers as they reach out to different types of owners. So you have accidental landlords that care about something very different than an like mom and pop investor that's trying to grow a real estate portfolio. And depending on your market might depend on which one of those or both of those you focus on. [00:11:26] But having a degree of focus and on that specific buyer or owner that you fit best for is really important to scale because then you can build systems and processes around that. You can build what you mentioned earlier, pricing and packaging around those people. And you're not trying to do everything for everyone. [00:11:49] You're focused on solving the needs of. A specific like group of people. They, I think it's Seth Godin who talks about a thousand true fans. And I think his point is to be very successful in life, you just need to have a thousand people that really love what you're doing and want to pay you to keep doing it. [00:12:09] You think about it, like people are looking for massive scale, but you can actually have an incredibly successful business just by solving the needs of a thousand people.  [00:12:19] Jason: So when you said be everything to everyone, I was immediately thinking, "Oh yeah, some property managers just like are doormats." [00:12:25] They're trying to do everything. What you're talking about, I think is also super powerful, which is this, having this, a higher degree of focus, which you said. And I was thinking we'll focus on what, right? And you're talking about like really getting clear on their avatar, like really getting clear on who they want, what their ideal customer looks like. [00:12:42] Sarah does a lot of work right now with our clients in our rapid revamp program, focusing specifically on this.  [00:12:49] Sarah: Well, I think one of the things we do and actually we're going to be getting into that in a couple of weeks right now, what we're focused on is figuring out their why and their business why. [00:12:59] And I don't think that you can really figure out a lot about your clients and what they truly want, what's really important to them, if you're unclear on what you truly want. It's like that saying, like if you can't love yourself, you also can't love another person, so don't get into a relationship. It's kind of like that. [00:13:20] So if you're unclear about what you're doing and why you're doing it. And why... the big thing is, why does it even matter? Then if you can't answer that question and feel really solid in that answer, then you're never going to be able to figure that out about other people either. Because if you can't start with yourself you're never really going to absorb the information the way that you need to in order to create a really powerful relationship with a client. [00:13:47] Jason: Yeah. Powerful. If you get into a relationship with somebody and they have more clarity on what they want than you do, they win. Totally. You are giving up what you want because you just never got clear enough on it. We all have things we want. It's built into us. Like we have desires. But a lot of us aren't willing to just want things like the, a book I read recently on 10x is easier than 2x kind of talks about this a little bit on the audio book. [00:14:15] They were talking about wanting and how important it is to want, but society, religion, everything kind of conditions us that, "well, you don't need that." And that's what we always hear. "You don't need that. What do you need that for? What do you need that for? Why do you need a house?" [00:14:29] Matthew: You know, I think about what I've noticed is a common theme of the skills that got you here aren't going to get you there. And, what I mean by that is like a lot of people do fall into property management by accident. [00:14:42] Yes. Yeah. I, for one, can definitely relate to building a business that tried to do everything for everyone. And that helped me get a foothold into the market. It helped me build a reputation of a doer. I was really successful at creating customers who really liked me. But I sold the business before I ever learned to scale it. [00:15:04] Effectively. I've learned those scaling skills working in a software company but I've had to go from highly successful doer to slowing down, thinking strategically, getting to the why and being careful about choices and realizing like "no" is often better than "yes" if you're being careful and focused. [00:15:28] And I think that set of skills is, at least for me, it was incredibly hard to go from doer to strategy is kind of how I talk about it or think about it. And that is how you get a business from working very successfully, but working 60 hours a week to growing. And maybe you're still working 60 hours a week, but you're not unclogging a toilet because you can't get ahold of a maintenance person and you have a plunger in the back of your truck or whatever, you know, you're building systems and procedures to allow things to grow sustainably.  [00:16:09] Jason: Yeah, there's a really good book. We've had the author on the show and he's spoken to one of our conferences. [00:16:14] Mike Michalowicz wrote a book called The Pumpkin Plan in which he talks about this analogy of growing a business is akin to like growing prize winning pumpkins in a pumpkin patch. One of the principles is it's impossible to grow the business that you want if you plant the wrong seed. You cannot grow a prize winning pumpkin if you plant a pumpkin pie pumpkin for example. It's just not going to be big enough. Right? And I think you'd mentioned accidental investors. I think one of the biggest mistakes property managers make by not having clarity on who their ideal customer is they try to get everybody. Then they're taking on a lot of accidental investors and they churn out like after a year. [00:16:52] Right. And churn is it's impossible to outpace with adding more doors and growth, a bad churn rate. That's really a grind. Like that's brutal and painful. And it actually takes less work to work with 10 year buy and hold investors, less work to convince them to use you, less work to do stuff versus you know, working with accidental investors. [00:17:14] And so if a business builds a business off of the back of accidental investors, they're building a business that has a high churn rate, the MRR model gets destroyed, and it's a grind, and their business will more likely fail or stay stagnant for years.  [00:17:31] Matthew: That makes total sense. What I think about too is like, how do I build software tools that help the property managers elevate the conversations they're having with their intentional investors, mom and pop investors, or how do they convert an accidental investor into a more active investor? Like How do we help them show property performance and move the conversation beyond the like three bids we got for the last maintenance issue to what's the overall longterm value of this property and what type of return should it produce? And what's your ideal investment, what types of returns are you looking for? Does this asset actually fit what you're looking for? because property managers, they could underwrite markets better than anyone else can in terms of property investment. [00:18:30] Jason: And I think they're connected to reality. You know what actually works and they know which things need to be improved or change on a property to get the best rent rate. They like, they know all this. They're the best equipped to handle investors, period.  [00:18:44] Matthew: And they're stuck having these, like, what arguably are low level, like not important conversations around, "do we like this maintenance bid or that maintenance bid or like the tenant paid three days late. Are you sure we should renew the lease?" Like, like stuff that's like fairly insignificant for the overall, like performance of the assets.  [00:19:06] Jason: Yeah. Yeah. I agree. Like big focus on the minuscule things that really aren't that significant or that important. And a lot of times it's, they've just set up a relationship that involves way too much communication. Just unnecessary and irrelevant. And then I think that's just has goes to setting boundaries. I mean, Sarah was able to set amazing boundaries when she ran her property management company, like her stats and metrics were ridiculous from what I've seen inside thousands of property management companies. [00:19:37] And so, I mean, she had like 60 percent profit margin, 260 doors, C class properties and ran it remotely part time with one part time person boots on the ground. Like it's insane. And then we see clients that are like the complete opposite. They're like working like a dog with 50 units and like stuck in the first sand trap. [00:19:57] Sarah: I hear them say like, "I have 37 and I work like 58 hours a week." I don't even know what you're doing. What are you doing? How?  [00:20:03] Matthew: I can relate to that.  [00:20:05] Sarah: I don't understand what you're doing. I don't get it.  [00:20:08] Jason: The testament to having a really sharp operator in a business. She makes us a lot more efficient. So, so how does Appfolio help with all of this? [00:20:17] So you've mentioned you know, having some clarity on the customer and, you know, getting clear on who you want. How is Appfolio software facilitating these owner relationships?  [00:20:29] Matthew: Yeah, our main channel is the owner portal that we have, right? That's the main channel that we can build technology in that allow property managers to communicate better with their owners. [00:20:44] So we've been making a lot of investments to bring property performance into the owner portal in and visualize it via dashboards to give more insight to the property owner about how the property is performing. I think the first problem that we solved rather successfully based upon customer feedback is how can I get data to my owners so they stop calling me about things that are low value and relatively trivial? [00:21:16] So like getting all of that, like did they pay their rent on time? Approving maintenance work orders, like simple things that most of the time can be just a click of a button and happen via technology that's been like, now we're looking at like, what are other ways we can help visualize the performance of the property so that property managers can, if they want, have what I would call like a more asset management conversation as opposed to a like operational conversation. [00:21:49] What I believe is going to continue to be true is there's going to be more consolidation of single family, and there's going to be less accidental landlords over time and more people that are actually looking for real returns on their assets. And so property managers are going to have to learn how to have asset management type conversations which talk about cash on cash return, IRR, those types of things that might sound intimidating. [00:22:22] They're really not that complicated if you spend some time learning them. We basically want to empower our customers to have those conversations easier and try to be thought leaders for the real estate investing space, which they serve and typically are their best customers.  [00:22:40] Jason: Yeah, I love that. [00:22:42] Sarah: So the, I feel like our ROI calculator does a really good job of that. And that's something that's new. So most people have no idea what that is. because we just rolled it out. But we gave early access to some people who had attended an in person event last month with with us. And they all really loved it. [00:23:02] But what I think I like the most about it is a lot of property managers, they have great knowledge. They have great understanding and they have great data. Sometimes, not all the time, but sometimes there's a little bit of a gap. When an investor or there's a little bit of an like just the clench, right? [00:23:20] When an investor, like a really savvy investor calls, any property management owner and says, "Hey, you know, I'm looking for, you know, properties with X cap rate," or, you know, I'm, you know, looking to get this kind of right. And sometimes they're like, "Oh, I don't know how to approach this conversation. I just don't. Maybe I know some of the data and I just don't have all of the data. But I think our ROI calculator really helps with that because it kind of breaks down. You just enter it and it's really easy. You can get it from the MLS. So literally anyone can do it. You just, you don't even have to be a real estate agent. You just pull the data from the MLS. And there are certain things you might need a property manager's guidance on things like, you know, how much might the rehab take and how much is market rent for this property or this area. [00:24:11] And from there, it'll show you, you know, does this property cash flow well? And what kind of tax benefits do you get from owning and holding the property? Because everyone, I think when they think about real estate investing, they think, Oh, it's cash flow. It's not always about the cash flow. There's so many other ways to actually make money in real estate. [00:24:37] And cash flow is a small little chunk of the pie. So I think the ROI calculator really helps empower property managers to have these really great deep conversations with realtors and with investors and do so confidently, not just, "Oh, well, I think this will be a good property to invest in, or I feel like this is probably a good..." [00:25:03] We know because now we have the data and now it just comes down to: do the numbers work or not?  [00:25:10] Matthew: Yeah. What you're talking about sounds really familiar to what I call like underwriting. And that's really common in multifamily. Every single multifamily operator or investor underwrites a property before acquisition so that they have a pro forma. [00:25:28] They know how it's going to operate and that will happen more in single family over time. It's just been such a fragmented market that is less mature, but the returns and yields are higher. And that's why you have invitation homes and other big, large owners that own nationally in this single family space, because if you can figure out how to buy in a market that's working, has the right fundamentals and is working, can get quite a good return. And so, yeah my belief is everyone in this space needs to learn how to have these conversations. And our part is to build as much technology as we can to make it easier for people to navigate. [00:26:16] What I view is a world that will continue to change and mature and get more sophisticated over time.  [00:26:25] Jason: Well, love it. I think to wrap this up, I think it's really an interesting thought to, you know, when people are picking property management software, I don't think the owner portal is at the top of their list. [00:26:36] I don't think it's their main focus. They're like, "how is this for me? How is this for me?" Instead of the person that's going to pay them, you know? And so I think this is an interesting take or an interesting concept that Appfolio is placing some attention to focus on. You know, optimizing the owner portal and maybe innovating there to improve the owner's experience, which in turn will benefit the property manager and hopefully help them retain clients longer or showcase the value maybe depending on how you develop it, even convince accidentals to turn into buy and hold long term investors, you know, like, because they can see some numbers and some stats and go, "why would I like give this up?" [00:27:14] But I think it's an interesting concept and And it also adds some validation to our ROI calculator that we brought to the industry to, so, well, Matthew, it's been great having you on the show. How can people find out more about Appfolio and any parting words for our listeners? [00:27:29] Matthew: Yeah, go to our website. I'm also pretty available on Facebook, Twitter, LinkedIn. So look me up. Hopefully my name's in the show notes, Matthew Kaddatz at appfolio.com is where we got. I love having conversations with property managers about just what they're experiencing in the business. So always happy to have a conversation with anyone. [00:27:50] Thank you both for your time. Really appreciated the conversation. Excited what you guys are up to. Sounds like there's some overlap and parallel, which is always a good thing.  [00:27:59] Jason: Well, awesome. Great having you on the show. Thanks Matthew for being here. All right. So if you are a property management entrepreneur, you're wanting to grow your business and you are interested in that ROI calculator that Sarah mentioned, make sure to reach out.  [00:28:13] Sarah: It's live now so everyone can get it. [00:28:16] Jason: So basically it'll show the the ROI on a property, so they can contrast this to like investing in stock or anything else and generally the property is going to win, right? You know, on almost anything. There's no way people can get these kind of returns if they invest. And tax benefits. The tax benefits. [00:28:35] Sarah: The tax benefits, like this is where it's at people, the tax benefits. And the nice thing, I will also plug this too, is it shows you on a particular property, if you were to buy it cash versus if you were to finance it because sometimes one or the other like totally wrecks the deal Or sometimes one or the other you're like, "well, this is what I want. This is what i'm really looking for tax benefit wise or cash flow wise." Well, okay, then if that's what you're looking for now, I know as a property manager or as a real estate agent. Now, I know which way does the deal make more sense for you? Because perhaps it doesn't make sense if you buy in cash, if you're looking for cash flow or vice versa, right? [00:29:17] So it kind of gives you the, you know, here's if you do it this way, this is what it looks like. And if you do it this way, this is what it looks like. And it shows you the benefits of both really of both on one report. And it's it's really great. I think it makes it I think it's streamlined everything that make things super simple and it makes these I think one of the big problems really is there are some investors that know how to do this. [00:29:43] Like we, we talk to them sometimes and they can just, they spit out. They're like, "Oh, I know based off of this data, this is how the taxes would work." But I would say the majority of people, they aren't as familiar with the tax code because it's not a very interesting read. So if they're not as familiar with the tax code, they might not look at it through that lens, or they might miss something. [00:30:10] This is really nice because it will show you exactly, you know, here's all of the tax benefits, and here's actually what it looks like on this particular property with these particular numbers. Yeah.  [00:30:20] Jason: So special shout out to John Chin for working closely with me on developing this. He has a certification for real estate agents to become investor savvy, all the certified residential investment specialists or Chris. [00:30:34] So, you know, check that out. And we, I work closely with John for months developing this tool and getting it to work in a certain way that it outputs a nice, pretty PDF. And what's really magical about this is that this is a lead generation tool so that you can provide these documents to on each property. [00:30:56] You can provide an assessment for real estate agents, and it's branded with your brand and you can give this to real estate agents. They will come and fill out a form and submit a property so that they can get this. You will give it to them. You can create a video about it and send them the video and this document. [00:31:13] We have give you a script for this as well, and you then have this tool or this resource and they're giving it to their investors, the investors. It's already got property management factored in as part of the investment strategy. And so it's part of the conversation. It's an assumed given thing. So this allows you to get property management clients is the bottom line. [00:31:34] This is why we developed this for our clients to help them grow faster. And our clients are loving having conversations around this. Yeah.  [00:31:41] Sarah: And they're like, "I'm going to plug this on my website. That way I can just get all this traffic on my website. I can get people right there. Easily accessible. I can promote it right from there. The data goes right to them." It's fantastic.  [00:31:51] Jason: Yeah. This allows you to help real estate agents look smart and look good with investments because most really aren't that good with investments. They aren't familiar. A lot of real estate agents don't even have a single investment. And so 50 percent real estate agents didn't even do a deal last year. [00:32:05] So let alone with an investor, right? So this allows you to help some of them become more investor savvy and feed you more deals as a property manager. So pretty awesome. So anyway, reach out to us at doorgrow.Com to get access to the ROI calculator. And I guarantee it's going to make you a lot of money if you use it effectively. [00:32:23] All right. So that's it for today until next time to our mutual growth. Bye everyone. [00:32:29] you just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:32:56] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Discover the mindset changes and routines implemented by Kent Hardman as he grew his property management company; Learn about the importance of self-care, shifting your mindset toward growth, and the impact of joining DoorGrow; Hear about the significance of starting small and the value of hard work and following a system for accelerated growth.