DoorGrow has changed a lot in the last few years. We’ve added tons of new features and perks for our clients as well as new coaches… including Sarah Hull, COO and property management growth coach. Join property management growth experts Jason and Sarah Hull to learn more about Sarah’s role at DoorGrow, operations, and how you can scale your property management company. You'll Learn... [02:47] Sarah’s Property Management Experience [05:19] Improving Operations and Cutting your Staffing Costs in Half [15:38] Why You Need an Operator in Your Business [22:02] Personality Types and Their Roles in a Business [27:24] The Clue that You Need a Better Team Tweetables “You can't build the right team around the wrong person.” “Here's the clue that you don't have the right team: your day-to-day is something you don't enjoy doing every day.” “Is the bruised ego worth a better, more profitable business that takes, a lot more off your plate and is less stressful?” “The most important person you'll ever hire in your business will be the operator.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: Here's the clue that you don't have the right team: your day to day is something you don't enjoy doing every day. If you're still wearing hats that you don't enjoy doing and you've built an entire team around you, and you're the wrong person in the roles that you're sitting in, then you've built the wrong team around you. You can't build the right team around the wrong person. [00:00:18] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrow hacker.  [00:00:36] DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate gateway to high trust, real estate deals, relationships, and residual income At DoorGrow, we are on a mission to transform property management business owners and their business 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 along with Sarah here, property management growth experts, Jason Hull and Sarah Hull, the founder and CEO and the COO of DoorGrow. Now let's get into the show.  [00:01:22] All right, so I'm already messing up the intro as I'm reading it because I'm looking and seeing her here in the screen, and I find her highly distracting. So, we were talking before we talked last night, we're like, what are we going to talk about on the podcast? And and then this morning, I said, what are we going to talk about? She says, I don't know, we only talked for like five minutes about last night, and we didn't come to a conclusion. So, I said, let's talk about you. Can I intro you and brag about you first? Sure, go ahead. So I wanted, I thought we would talk about Sarah today because she's probably a lot more interesting certainly to look at than myself and maybe to listen to. So I thought we would talk about her. So, I'll tell you a little bit about Sarah. So what's really amazing about Sarah and what I really like about her is that her wrists are really tiny.  [00:02:10] Sarah: That's really, it is true. It's not not true.  [00:02:14] Jason: My hands are not enormous. Dude hands. I buy child bracelets for her. I'm just kidding. All right, so  [00:02:19] Sarah: I have a five inch wrist. So like I can take, I can actually wrap my my pinky and my thumbs and touch. That's about, and they overlap. So it's about this big.  [00:02:31] Jason: Oh yeah. I can do the pinky as well. That's, yeah. Very small.  [00:02:34] Sarah: I train a lot on the rest. Get them that way.  [00:02:37] Jason: I do actually like that. I think it's a cute trait. All right. But I'm joking. What, what I really want to say is, so what's interesting to the audience is that Sarah has managed her own property management business. She has exited that. She sold it. Great job, by the way. Mm-hmm. And she managed a decent amount. At that size, most property managers have a team, like a full team, like five to 10 people I've seen. And usually at the stage, these companies are very unprofitable. Like this is the worst profit margin stage they've been at in their business. And they get stuck. And I call this area the second sand trap. They can't afford to really like expand or do more marketing or, and they're just not able to take a lot out of the business and, and their profits are all getting eaten up by staffing costs. Now Sarah had one part-time person, boots on the ground part-time and managed her business remotely part-time. Part-time, yeah. She was bored. Very. And people are like, well, these must have been really nice properties. These were C class properties? Duplexes, small plexes. [00:03:52] Sarah: Yes. We had a good mix of single family, duplex, triplex, and then I think we had maybe two that were like 10 units, which was kind of big for my area, but  [00:04:03] Jason: Okay. Yeah. And so, what was your profit margin?  [00:04:08] Sarah: Over 60%. Okay. 60% was a not great amount.  [00:04:12] Jason: Okay, so a lot of you dream of that, right? And you think, how's that even possible? It's possible because one, Sarah is very efficient. She's a very good operator. That's why she is now the COO of DoorGrow. And everything in the business is better as a result of having her in the business. Everything's improved. But I wanted to qualify Sarah as a badass. Like she's really good at what she does, and she wasn't really connected to the property management industry. She just did what made sense to her. And she didn't really want to be talking to tenants and she didn't really want to be dealing with talking to the owners very often, and she just set up her business in a way that was very efficient. And so we'll be talking about that in the priorities training. So, Sarah also has come into DoorGrow and she runs all of our operations. She runs I everything that I've taught her that I like I've developed DoorGrow os and how we plan our cadence. She just knows it to the point where she can teach it. And she learned it all very quickly. And now she's the one that coaches clients how we did our hiring. She like has improved on that and built it out even more and teaches clients how we do hiring and so we help clients get all these systems in place to become more profitable and more efficient. Sarah does all that. So as an example, why don't you share the story of maybe Jade and Andrew. I think that's a great story. Because they were at a similar size of a business as you had had.  [00:05:46] Sarah: Yeah, yeah. Well, they had about 188 units and they had 11 team members total, like 11. So really, really overstaffed. And some of them were in the office and some of them were VAs and we just really had to like dive in because they said, well, like, what are they doing? And they kind of gave me like a surface answer. Like, oh, well this person does this and they do this. And I said, yeah, but like, what are they really doing? Because with 188 leases, like, let's just pretend that. We had all hundred and 88 due in the same month with, which isn't going to be the case. We're going to, spread that over the course of multiple months. But if we had all hundred 88, due even in one month, I still can't figure out what, two or three leasing agents are doing with 40 hours a week every single week. So we are just really going through and trying to figure out like, who's doing what. And sometimes I find that either no one's doing something or two people are doing something. And if two people are doing it, just know that it's not getting done.  [00:06:56] Jason: That's a 17 to one ratio. I just did the math. [00:06:58] So that's, that's for each, for every 17 doors, they have a team member.  [00:07:04] Sarah: It was really bad. So we just kind of went through with them and figured out like, what is everybody actually doing? What should everybody be doing? And then how many people is it really actually going to take? And they they had a lot of meetings and discussions with each other and then like we kind of met a couple times throughout this process and they came to the conclusion that they needed to let go of about half of their team. And they did. And then once they did that, all of a sudden they're like, Hey, we're like profitable and we're making money. But when we first started talking with them, they said like, actually, we're losing money every month. Like we can't pay ourselves. We can't take anything and we're losing money. Like this business is costing me money to run every single month. Yeah, little uncomfortable situation to be in, especially because property management isn't, it's not easy, it's not a cake walk. You're not, like doing nothing all day. So if you're in a business like this, And it is complicated and it is challenging. Then the least you should be able to do is like get yourself a decent profit margin so that you can make sure that you're paying yourself and that your business isn't struggling to keep up with. [00:08:14] Jason: Drive this home. Sarah did one call with them and the result of that one call was, what? What are all the results?  [00:08:21] Sarah: Well, on the one call, they realized, I have no idea what most of the people are actually doing. Like, they gave me the answer and I'm like, yeah, but how do you spend 40 hours a week doing that thing? [00:08:32] Yeah. And from there they realized like, we need to make major, major changes to our team. And most of these people are going to have to go. On the second call, that's when they actually decided to take action. Okay. And they got rid of, so. [00:08:47] Jason: The second call, which is she did this one call after that. [00:08:51] Mm-hmm. They fired half their team, half their team then, and as a result, their profit margin, which was not very good, which was negative, losing money, was then what? What did they get to? I didn't get their profit margin. Okay. It was significantly improved. Oh, no. Significantly improved.  [00:09:09] Sarah: I know they weren't losing money anymore. [00:09:10] Jason: Yeah. Yay. All right. We'll have to get some stats on that cause I want to brag during the priorities training about that. All right. So, Sarah has been able to dramatically improve our clients' businesses and lives. One of the things she's also helped a lot of clients with is completely restructuring their teams. Mm-hmm. They just did two of them last week. Okay. Why don't you explain Yeah. Kind of what you've done.  [00:09:37] Sarah: Mm-hmm. Well, all right, so one of them had about 360 doors and there were 1, 2, 3, 7 people on the team total. Which to some of you might sound like, yeah, that makes sense. And to me it's just, I'm like, there's too many people. And it was kind of like the same thing where everyone is saying like, oh, I'm so busy. I'm so busy, I'm so busy, and I'm looking at things going, I just don't understand what actually is is happening. Like, there's a lot of work that has to be done. It's like busy work. It's, it's like grunt work, but it's not, super helpful. It's just the things that are going to keep you afloat and that's like a bare minimum. So what we ended up doing is this client had one BDM, three property managers and then three assistants that were basically like assistant property managers. And we, he's like, I don't know if a lot of them are like good fits. [00:10:37] And I just, I, I really don't know what they're saying they're doing because they all tell me like, I'm so busy. I'm so busy, but what's actually happening? So when we kind of like dove into things, we realized like, you are overstaffed and very similar situation. He wasn't able to really take a lot out of the business because there was not a lot left. [00:10:57] Jason: Who is this? Kevin. Okay, so Kevin had three property managers. Mm-hmm. Each property manager and they were portfolio style. And each property manager had their own assistant. Yep. Because they were not, for some reason able to get done what they needed done. [00:11:13] And Kevin himself was having to do lots of things, put out lots of fires, and be involved in micromanaging everybody. And when I first shadowed, and--  [00:11:22] Sarah: he wasn't micromanaging anybody, there was nobody leading the team.  [00:11:25] Jason: Okay. Kevin wasn't leading the team then? Nope. So what, Kevin? No one was leading the team. [00:11:30] Sarah: Team was just kind of doing whatever they thought was the right thing to do.  [00:11:33] Jason: All right. Well, Kevin seemed pretty stressed out and what, yeah, and Kevin didn't have any personal support at all. Like nobody was helping Kevin with anything. He didn't even have his own assistant, but he got assistance for three people on the team that weren't very productive or efficient. So, what's the plan with Kevin? [00:11:53] Sarah: Yeah. So, half of those people are going too. So we decided the BDM is excellent, so we're going to keep the, the bdm. He is taking one of the people who was a property manager and she actually tests okay as a property manager on our assessment. But she tests better as an operator. She is like, is a better fit for kind of this operator position. So we're going to shift her into the operator role. We're going to keep one of the property managers to do all of everything. And then one VA who's going to be like an assistant property manager.  [00:12:29] Jason: Where'd the BDM come from? [00:12:30] Sarah: The BDM was already there. Oh, okay. He was one of the seven originals. Got it. So he had three property managers, three assistants, and one bdm. Those were the seven.  [00:12:39] Jason: Got it. Okay. Yeah. Cool. Yeah. Who's the other one you said there were two? Josh. Josh? Yeah. What's the deal with Josh? [00:12:46] Sarah: Josh had about 300 doors and his whole team was kind of like a hodgepodge of people. Not that he was super overstaffed, but just people weren't in the right seats. And when you have the right people, but you're not putting them to the best like use, then you kind of still run into issues. And Josh, same thing, no operator. There was no operator on the team and largely he was kind of handling operations and he is like, I don't mind doing it. I like doing it, but I don't want to be the only one doing it, and I don't want it to always fall on me. Mm. So what we're doing with him is he had a VA that he had let go, like right in the middle of our talks. And he said, Hey, I'm hiring a new va. I said, great, let's like test the new VA to see if they're going to be a good fit. And then he decided, like we shifted his team around a couple of times and like through the assessments realized and he had talked with you. This was the one that we took who he thought was going to be the property manager and then put her in the BDM role instead. Mm-hmm. Because he is like, well, I don't know how to like, make everything work. So now he's he's going to have like a whole different team structure. Not that he had to let anybody go. He wasn't like crazy overstaffed. It's just he still wasn't super profitable because he didn't have the right people in the right spots. And he didn't have anyone doing the operations. Mm. You can get as big as you'd like, but if you don't have someone handling the operations, and this is that back end piece, this is not front end stuff, like everyone always, this is what we start with, is we start doing front end stuff. Because when you start your business, you are doing the front end stuff, you're doing the leasing, and you're doing the showings, and you're talking to tenants, and you're handling the maintenance.  [00:14:37] This is all the front end stuff. This is the stuff that absolutely must be done just to make sure that the business runs. When your business reaches a certain size, you now need to have someone doing the backend stuff. Mm-hmm. And if you're not having anyone doing like the backend stuff, which is like, hey, making sure that everyone on the team is following the same direction and everybody is contributing to the vision of the CEO and running things like your daily huddles and your strategic planning and doing hiring and firing and getting job descriptions, doing team reviews like. For those of you that are hearing all of this and you're going, blah, that sounds horrible, then it means you're probably not the operator. And at some point, if you're not an operator, it's okay. Jason's not an operator, like he doesn't like that. It's not his brain functions. So you need the counterpart whose brain does function like that, and that would be me. [00:15:29] Jason: I like to build out the systems and I must have been mis mixing up Josh's team. I think you did team with Kevin, so I think you did. Yeah, I remember Josh. So the most important person you'll ever hire in your business will be the operator. That's very true. And because visionary entrepreneurs do not like the details. I like building out the systems. I like creating DoorGrow, hiring and DoorGrow os and these systems. But I don't want to run them in my own business. I want someone else to run them because running those things is not as fun and it actually, the results are not as good because especially with planning, if I run all the planning, it's not as good. Bad, and so bad. [00:16:09] Sarah: There was one week where I couldn't run the planning meeting because I was on a flight and I said, can you just run the planning meeting? And he did it. And I came back and I was like, I don't know what happened in here, but this is bad.  [00:16:20] Jason: It was okay. I did just fine. It was bad. So the issue-- just fine. The issue is it's not fun for me to run the meetings, but also when it comes to like actual strategic planning, we as the visionary or as the main leader of the business, or even as the operator, we have to be the last to speak. Otherwise, we influence things. And if I run the meeting, it's really hard for me not to say certain things and not to steer things a certain way. [00:16:48] And so I don't get as valid of feedback from the team. I don't get as valid of information. So what happens is as visionaries, a lot of times we think we have all the best ideas. And it's not generally true, right? Our team members are closer and more connected to what's actually happening on the ground, and they can see things we can't see, and they have ideas that we don't have, and they can share these things with us, and we can get their buy-in into the plan if they help create it. [00:17:16] But when we are just top down pushing everything, because we think we're the visionary, and this is one reason I really don't like EOS. One of the big fundamental flaws in EOS is they intentionally overinflate the ego of the visionary. The visionary has all the best ideas and they're so important, and that feeds the ego and it helps them to sell integrators, which in their accountability chart, they place the visionary at the top, and then they have a line going down. And this is just a fancy name for a stupid org chart that doesn't make sense, but you have the visionary connected to the operator. Which they call an integrator. And the integrator then is connected to everyone else on the team. This is one of the most flawed structures I've ever seen, and nobody runs their business this way because integrators or operators are not the people that should be over sales and marketing generally. They're not the people that, because they have a very different personality type, they're opposite. And they want to conserve and they want to make sure money is handled well and they don't want to take risks and they don't want to, like, this is more stuff for maybe your head of sales and marketing or maybe your BDM or whoever you want to place in your executive team. They're really usually equals, but they have to report their stats. Everybody reports their stats to the operator. And so the challenge is we have to have a system in which the team can all give feedback and give information first, and it isn't top down. It's really bottom up. And this is how we designed DoorGrow Os and why people that come from the EOS system get a much bigger result and a bigger yield from their team and much more profitability than they were able to get under u s or traction or rocket fuel, right? [00:19:00] These are some of the things that Sarah's able to do with some of our clients. And I have to say, it's amazing to be able to have somebody that I can trust to not just understand all this stuff. Because she, she's super sharp but also to be able to teach it to clients and to be able to help clients work through all of this and trust that it's just going to be handled and that's really what we want in a great member of our team or in a business partner. [00:19:25] Or with anybody that we work with, we want people that we can trust to just handle stuff and to do it well. Sarah does it really well, so, what else should we say about you?  [00:19:36] Sarah: I think that's just how my brain works. Like every job that I've ever worked before I owned my own business, I would be there for a little bit and it was super clear to me like, Hey, if we make these changes or if we do these things differently, or if we just shift this a little bit, it's going to be better and here's how it's going to be better and why. [00:19:55] And it's so frustrating for me when you know, like I was at multiple insurance companies. Before like I kind of got into property management and I on all of them, I was like, oh, we could just do it like this. Well, we don't do it like that. I'm like, I know you don't do it like that, but you should do it like that and here's why. And when it's frustrating for me where I'm like, oh, you could just make these changes and you could do things like this. And this is just how I think my, my brain is just wired to work. because I can like look at the overall picture of things and I'm like, well, why do we do things like this? You could do it like this instead and we should change this and this should be different. And that's really good. This is really great. Keep this, but change this little thing. And then these are the results that you'll have. And at all of the insurance companies I had worked with prior, I had like made some suggestions and they're like, oh no, we're not going to do that. We can't do that, we can't do that. So I think looking back, it's funny for me because I'm like, oh well yeah, I was kind of, almost like destined to like get in and, and run my own business because then if I think, Hey, we should do things like this because of this, then I can just do them. I don't have to go and ask like, oh, hey, can I really think this would help your business? Like, we can do it. And they're like, no.  [00:21:08] So now, like, just looking back, I'm just able to kind of pick it apart and see things that sometimes other people don't see because you're just, you're too close to it. Mm. And, and it's it's personal for people too. They're like, oh, this is my business and I'm really proud of it and this, I worked so hard and I know, like, I know what goes into running a business. Like I know it, blood, sweat, and tears doesn't even begin to cover it. I understand that. And that being said, I think that's one of the reasons why you should be looking to improve it. So if you can make a few small changes, like your, your ego might have a little bit of a bruise, right? But is it worth the trade off? Like, is the bruised ego worth a better, more profitable business that takes, a lot more off your plate and is less stressful? So for sometimes, sometimes people are like, no. I don't want that. I just want to know that I have all the answers and I'm right all the time, and that's okay. [00:22:02] Jason: All right, so what's unique about Sarah, and some of you might identify with her a little bit. So in Myers-Brigg, she's probably an INTJ.  [00:22:13] Sarah: Well, not probably, I'm like the epitome of INTJ. [00:22:16] Jason: So INTJ. Is very intuitive. They are introverted. They're a thinker and they're judging. Now INTJs are because they're super intuitive. They're called the strategist because they're logical and they figure out solutions to things, but what's I think really in interesting, and I think there's women's intuition and she's very intuitive. She just knows things without knowing why it's true. Mm, yeah. Like she's like, there's a problem over here in the, in our business or there's a problem over here and I don't know why, but it, something's not right. So. And what's frustrating is I will say no. I don't see it. Like everything's fine. And she's always right. She loves when I say, you were right. She loves it a little too much by the way. But she's usually right. And so I've learned to trust her intuition tuition and sometimes I think our unconscious. Has a lot of information and can process a lot more than our conscious mind can and picks up on little details and things. Mm-hmm. And has worked some things out and just knows things and it bubbles up to the surface of our conscious mind and we're like, Hey, something's off here. And she gets these flashes of intuition that when there's like some sort of threat and things like this as well. So I've learned to trust your intuition because it's proven accurate multiple times. And I've always considered myself fairly intuitive in the business, but her intuition is kind of next level. And so I think being able to trust your gut and having a partner in the business or some, or an operator that you can trust, their gut can have a significant impact as well. [00:23:52] So I'm a bit opposite of her. I'm an ENTP. So we both are the intuitive, which is the n and we're both thinkers. Thinkers. But. I am a bit more extroverted probably. Even though I really feel like an introvert a lot of times, but I like need to be around some people occasionally. [00:24:12] Sarah: Well, I know, but you usually like will kind of, you'll you'll break in that arena before I do. You're like, we like I just want to get out of the house and be around people and I'm like, oh, I don't.  [00:24:22] Jason: Yeah. And then I'm definitely more, we think very differently. Like very differently. Mm-hmm. I'm perceiving and you're judging and perceiving means my desk is chaos right now. If you could see it. And it means I love pulling in ideas from lots of different places. I have a crazy variety of books on the bookshelf over here. I've like, I pull in things from a lot of places to formulate my thinking. Then I'm able to formulate some new ideas and I'm very creative that way. And that's part of, I think why we have such great IP at DoorGrow. I get a lot of coaching and a lot of input from different sources and we improve those ideas and we have, I think, the best ideas and innovate the quickest in the coaching space in this industry period, maybe out of a lot of coaching businesses. We consult and share ideas with other coaches and coaching businesses as well that we're in Masterminds with. I don't want to do all the implementation. I don't want to make sure everything gets done. And so I'll be like, Hey, here's this great idea, but Sarah also brings really great ideas to the table. She's like, Hey, I had this idea. And then she'll just rapidly implement, like she just gets it done. She's like, Hey, let's do this premium Mastermind event and have people, we'll rent out an Airbnb and we'll get people to go and we'll do this and it'll be awesome. And I'm like okay. And she just makes it happen. Sells all the tickets to it, gets everything organized. I just showed up and got to look cool and she made it all happen. [00:25:50] He's like, what are we doing at this event?  [00:25:52] I showed up, I'm like, so what are we doing?  [00:25:54] He's like, what are we even doing? I'm like, just-- [00:25:56] I'm like, okay, Sarah's leading this. So that was our last DoorGrow Live too. Like Mar-- Yes, that's true-- my assistant who did a lot of planning and Sarah like, handled some of the details and ideas and I was just like, all right, I'm just here. I'm the tech guy. [00:26:11] Sarah: Just when we call your name, get to the stage, just go up there.  [00:26:14] Jason: Yeah. When, when it's your turn, Jason, you go speak and talk about something and I did. So that's kind of how we work together. So, what else should we say about Sarah? She's still working on getting her last name changed because it was Hall and she's switching it to Hull. [00:26:31] Sarah: Well, right now, I really don't know what it is. Yeah. Truly. I don't know because the Social Security office has me as Hull.  [00:26:39] Jason: So you got to change. Yeah. To my last name.  [00:26:41] Sarah: Yeah. But the DMV is like, so super booked out.  [00:26:46] Jason: So not, not in Texas yet. Your license doesn't say it yet.  [00:26:50] Sarah: No, no. Not my license doesn't say it yet, but my social security card does. [00:26:56] Jason: So, and your social media, I think you've changed most of it. I changed it before. Long before this. Yeah. So, but Hall's her ex-husband's last name, so yeah. So I'm trying to like, he's trying to buy a vow. I'm trying to buy that vow. I think I paid for that vow. What's on your neck and on your finger. And I think I've, I think I've accomplished that. I don't know. I don't know. So, cool. And I don't know what else, what else should we say?  [00:27:24] So Sarah's one of the key coaches in our business here at DoorGrow. Our mission is to transform property management, business owners and their businesses, and she does that like, she helps to do that. She runs a lot of the group coaching calls when I'm focused on other things in the business, which is awesome that I have somebody I can trust to do that at a really high level and to do it really well and clients really appreciate her test.  [00:27:49] Sarah: When you're busy, I run the whole scale call. Yes, every single week. [00:27:54] Jason: Well, you do. You go beyond that. You also run some, some of the other calls that I-- Yeah, for sure. I used to run every call. You can run every call. So, yeah, which is awesome. All right, well I think, for those of you that you want to experience some of the magic of Sarah and improve your operations, you're struggling with things, your profit margin is not what you wish it would be, and you think you need more kPIs and micromanaging and to like squeeze more juice out of your team. That's probably, there might be a little bit of truth to that, but generally you'd probably need a better team or you need to optimize your team and that's one of the most profitable changes you should make first before you start messing with micromanagement, KPIs, more pressure, stuff like that. You need to make sure first you have the right team, and here's the clue that you don't have the right team: your day to day is something you don't enjoy doing every day. If you're still wearing hats that you don't enjoy doing and you've built an entire team around you, and you're the wrong person in the roles that you're sitting in, then you've built the wrong team around you. [00:29:05] It's pretty obvious if you look at it from that perspective. You can't build the right team around the wrong person. Can't build the right team around the wrong person. So, we can help you make sure first, who are you, we can help you figure that out, and what do you really enjoy? And we have processes for that. And then we can start to build the right team around you so that you are supported and you get to move closer and closer to having more fulfillment in your day-to-day. More freedom, more contribution, and more support. And then your team members will be able to have those four things and you'll get probably three times the output from those team members. And that's the biggest expense and that will give you the biggest profit in your business if you can get these systems in place that we can help install. With DoorGrow OS and DoorGrow hiring and DoorGrow Flow and DoorGrow, CRM and DoorGrow. What am I missing? Flow hiring, crm, you said all of software. Those are our software. Okay, cool. Which we call our super system. So we're going to be doing this event on the 22nd, talking about priorities and how to increase your profit margin and how to decrease operational costs. We hope to see you there and or watch the replay if you see this later. Make sure to reach out to DoorGrow if you would like to experience some Sarah Magic. And until next time to our mutual growth, everyone.  [00:30:26] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:30:53] 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.

Have you heard about the multifamily market oversupply that’s been increasing since the undersupply during the COVID-19 pandemic? In this episode, Jason chats with John Carlson, President of Mark-Taylor Residential about Insight on the multifamily market oversupply. Mark-Taylor Residential has currently an inventory of 22,000 units and over 34,000 residents, being a multifamily leader in Arizona. You'll Learn... [06:33] What is the Multifamily Market Oversupply? [14:44] The Fundamentals of Real Estate and Property Management [20:05] Why Property Managers Need Their Own Portfolio [25:11] What will Happen to the Market Next? Tweetables “If you're that light, people are going to be reaching out to the light when it gets dark.” “Property managers, they have no concern about being the bad guy. They're totally cool with making sure that things work and running it like a business.” “You have to make sense of the market.” “I think it's a smart move that every property manager should be also building up their own investments.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: Property managers have a duty to be involved a little bit politically to prevent this firestorm from happening. And this is an opportunity to go and be the canary in the coal mine or be the Paul Revere shouting, from the horse, letting everybody know, Hey, there's a problem coming.  [00:00:18] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. [00:00:55] At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now let's get into the show. [00:01:19] My guest today, I'm hanging out here with John Carlson. From Mark Taylor residential, and I mean, it sounds like you guys are doing some big things. They're in Arizona, they have 22,000 units, 34,000 residents. This is not a small operation, so John, welcome to the show. [00:01:37] John: Jason, good morning everybody. Thanks for having me. Excited to be here.  [00:01:41] Jason: Cool. So we're going to be chatting a bit about multifamily market over supply, which I'm guessing is pretty much what it sounds like. So, but John, maybe give us a little bit of background on you first and how you got into this and your relationship with Mark Taylor and all of this kind of stuff. Give us some backstory.  [00:02:00] John: Sure, brevity matters. So, grew up in the Midwest Southern Minnesota. Farmer by trait with stepfather from age 10 until 18. Realized that was not for me. I'm not the micro dirty jobs kind of guy. You can see. I like the dressed up look. Yeah. So at age 16, I really thought about what I wanted to do in life, and of course didn't know. I was good at math, so I decided to be an electrical engineer. So I went to school for that. Worked for a great small company called vtech for about five years. Was able to finish school while working there and travel the world and discovered Phoenix and realized Minnesota was not long for me and what I wanted to be and do long term. So, chose Phoenix with my girlfriend Megan at the time. Traveled to Phoenix to look at apartments. I think we toured 15 or so apartments in one day. We had the big apartment guide book, if you remember those. Yeah, listeners. So we were feeding through those and there's a big eight fold and it had Mark Taylor communities. So we toured three or four of those and landed on San Cervantes. I always joke with my team, we actually broke into the amenity space because the office was closed, it was past six o'clock. So I just remember seeing this beautiful, resort style pool, sand, beach area, ramada water features. And I'm like, Megan, we have to live here. So, We flew back that night landed. I called the manager, Michelle Sinclair the next day and secured a two bedroom apartment class, a brand new for $940 and a month free concession.  [00:03:28] So we moved a few weeks later and this was just prior to 9/11. Megan had a job. I was scheduled to fly back to Chicago to a final interview with a fuse company. They were opening a satellite office in Phoenix, and that was scheduled on 9/13 2001. Okay. So clearly there were no flights that day. The world was on edge, including me, and they put a hiring freeze on. So I was off to the races with my fax machine and sending out resumes if everyone knows what a fax machine is, right? So, that lasted a few months and lo and behold, Michelle, the manager, came to me and said, Hey, Would you consider part-time leasing while you wait for a position in engineering? And in my fixed mindset, I said, no. I'm an engineer pounding my chest. And a week later I realized I had to pay bills and electricity and all of those things, car payments, so I signed on and never looked back. I fell in love with the organization, real estate, and truly found my home as we like to say. And that's Mark Taylor.  [00:04:27] Jason: Cool. That's quite a story. So it's pretty interesting. And so now what do you do at Mark Taylor? So everybody's clear.  [00:04:34] John: So today I run Mark Taylor as president. As you mentioned, now 23,000 units Class A both Phoenix and Las Vegas. So in two states so, regional but have a pretty good grasp of the market across the country. So, And I think, a lot of us know us nationally from a brand recognition standpoint. We've been in business almost 40 years. So that's Mark Taylor in a nutshell.  [00:04:56] Jason: So, That's awesome. Yeah, it's quite a story to go from starting to help with leasing to being president of the company. I think you skipped a lot of steps in between, but I enjoyed the beginning. So, what was the time gap there just for the audience to understand? [00:05:13] John: So I started leasing in 2002. My girlfriend Megan, moved back to Minnesota a year later. So I was here by myself. So I had a lot of time to figure out leasing real estate in the business. So I just moved my way through the organization. Like I said, I was good at math. I think I always had an appetite for real estate and I just really sunk my teeth into this business. And, as I always tell my new hires and the younger generation folks like lean in on mentors, find the best leaders. I found some great leadership mentors, people that were patient with me Yeah. And building up my skillset including Scott Taylor and Jeff Mark, our founders. And I just felt like that really helped my growth and my pathway and I worked my ass off. And I think, you can never look back and poo work ethic and sure. My mom and my father helped me with that years ago.  [00:06:02] Jason: Yeah. Growing up on a farm, you're going to learn some work ethic. Yeah. Whenever we were bored, my dad would say, we'd learn never to say we were bored because he would put us to work. We'd be working in the yard.  [00:06:13] John: I think I used that word for about 10 years.  [00:06:15] Jason: So I'm never bored. I am creative and I'm never bored, so it doesn't happen. All right, so cool. Well, John it's awesome to connect. So what year did you become president? How long? 2016. Okay. Okay, cool. Yeah, I mean, that's a cool story right there. That's a cool story. So let's get into this topic: multifamily market oversupply. I mean, there's a lot of multifamily stuff going up here in Austin. I'm seeing it pop up everywhere. There's building and building. So, what are you seeing there in Arizona? What are you seeing, maybe you think is happening here in the US and the market?  [00:06:51] John: Sure, let me start with, I'll start with, Phoenix Metro and all this broaden out. So, Phoenix, like most of the country was undersupplied from a multifamily perspective since really 2011. And I think if you just look back at the gfc the greater financial crisis in 2008 and nine and 10 that really I'll say put development in a paralysis type state. And Phoenix specifically was almost like the Black Plague. No one wanted to even think about investing here. And as most of the audience knows, I mean, it takes a long time to, to buy a piece of dirt, zone prep, design, get zoning approvals and get it through the city and actually build a unit that's two to three or four years depending on project type. So it took a long time to build up supply. So being undersupplied for a decade really resulted in a lot of things that we hadn't seen historically in Phoenix or across really the national landscape. So fast forward to the pandemic and we're starting to kind of get our, I'll say druthers in terms of supply. We're starting to get a better balance of that. An interesting data point we were delivering 18 to 22,000 units in the mid eighties in Phoenix, and had never delivered. 10,000 units in a year, past 1987 until last year. So if you think about the population adjustment, 19, just say 95 versus today, that's, almost 2 million people different. So, clearly there was an undersupply component. Fast forward to today and we're delivering and will deliver about 16 to 17,000 units in Phoenix Metro. Again, hadn't delivered past 10,000 units until last year when we delivered just over 13,000. So, yeah, I'll just say the equilibrium was in the landlord's favor, and unfortunately for renters that was costing them in terms of, monthly rent and you add to the field, the tailwind of Covid. Lots of folks came to Phoenix and I call it the Boomerang effect. Although the boomerang never came back, meaning. A lot of folks got to experience Phoenix for the first time, and I think this was a condition across the country. They found great spots where maybe there was a little bit less restriction in the Covid era, if you will. [00:09:04] And there were people coming here from California nonstop saying, God, I really enjoy Phoenix. I'm going to rent a place for six months. My employer's allowing me to be flexible at this point, and I'm going to test this out. And I think a lot of people decided to stay. So, as always, jobs create future apartment demand, but in this instant, if you worked in San Francisco, but you were living here in a six or 12 month lease, we weren't absorbing your job, but we were definitely taking your monthly payment. So, it was unique in that aspect and a lot of things changed from Covid. Obviously we can touch on that later, but expand.  [00:09:34] Jason: Yeah. A lot more remote work. Everything flowed in the nation from places with less freedom to places with more freedom. [00:09:42] John: That's just what one would expect. Yeah. And that's what happened. So I think people got a taste for Phoenix. They realized July and August aren't that bad. Yes, it's an oven for a couple of months, but we're okay. HVAC and other things. So, I think that accelerated what I think people were already starting to figure out that Phoenix was great and I think that happened across the country. So, not only Phoenix, but broadened that out. So across the country, I think there was a similar pattern in terms of lack of development, both in single family, which has to be mentioned because that's a component of our housing shortage and multifamily. So fast forward to today. You had a couple things happen, so you had some momentum in real estate. [00:10:22] You had zero interest rates, essentially that environment for 10 to 15 years, and you started to have all of these developers starting to get their, I'll say, momentum and build units. And of course a lot of Class A units were delivered and are being delivered. And so, what's happening now is you're seeing a surge in that. And part of that has been fueled by delays in construction. So if you think about the covid related supply chain issues, some of that's kind of worked through itself over the last 12 to 18 months, which is good. So inventories are better. Pricing maybe has reprieved a bit, but if you say, supply chain issues, labor issues, which is the biggest component of that you have construction deliveries that are delayed, say three to 18 to 24 months. [00:11:08] So a lot of these deals, the 16,000 units specifically in Phoenix are result of that. Otherwise this would've been delivered prior. So I, I think that's a big component of the oversupply. Which at the end of the day if you go into, I can go down to a bunch of soapbox areas, but if you think about the renter, which is most important to me there should be a nice equilibrium in the market that's the best for all of us, right? [00:11:31] You get about a 3% rent growth, which has been the case since 1982, 3.2% rent growth average by year. That kind of fits with historical cpi. So when you're raising rents 20% or 10% that's not sustainable. I'll just say it that way. So this supply cresting is benefiting the renter for sure. Yeah. Q1 Phoenix was down 3% probably the lowest in the country. And, supply cures a lot of things. I'll say it that way.  [00:11:59] Jason: Yeah. So I mean, everything's, the pendulum's swinging, right? And it's going to move back towards middle or back towards equilibrium. But how do we stop the swings? Because probably, you'll have a bunch of developers, they've been building stuff out because everybody's trying to capture all the opportunity that seems to be happening in all these markets like here in Austin. It's crazy. I'm sure it's crazy in Florida, like all the areas, there's lots of people moving from states that were more, more liberal and more control, and they're moving more towards areas where there's a little bit more freedom financially. And it'll be interesting to see if some of these places, the people that are moving, if they bring their policies with them and if those areas start to shift and change. But some of these areas what you see going on in San Francisco, what you can see going on in California, what you see going on in Seattle. I mean, some of these places do not look like great places to live anymore. Like it's getting chaotic. Sure. Because of some of the policies. So we're going to see a lot of money, I think shift, continually shifting towards these areas of freedom, and as that's happening, are these builders overbuilding? do you think that's going to be happening? That there's going to be too much like, it's like a gold rush?  [00:13:14] John: Sure. Well, I think that ship has mostly sailed because of the interest rate environment. So yeah. I think most of us pick any sector have forgotten how to live in an interest rate environment. We were 0% essentially. So, if you look across the spectrum, I think you're going to see zombie companies, fade away. You're going to see the old adage from really 17 to 21. It's weird to say old, but you had startup companies that were negative cashflow that would not, be able to pay for a printer, but they would just get another round of funding, it's almost like a Ponzi scheme. So I think getting back to some fundamentals from a business more of an institutional business, historical methodology makes sense for the entire market. And I think this will force guys or groups or developers to be much more thoughtful as they go to market or try to build deals, right? It just it's not the wild west or, the top of the bubble. I think fundamentals matter. I think how you think about your business, how you look at, your construction, your development, your cost structures, what rent should be, all of those things are probably okay for guys that have done this the right way for a long time. I think it's the fringe guys that are greedy and are taking advantage of certain market conditions. And that's fine. Everyone has their angle. But I think this will shake out in a way where you get back to some real core guys or core groups that know what they're doing and fundamentally will help shape the future of multifamily the right way. [00:14:44] Jason: So you mentioned the fundamentals. So what do you feel like are the fundamentals that business owners in the property management space should be focused on? That's going to prove to be effective in the long term. I mean, obviously the company that you are president of has been focused on the fundamentals and has been doing well consistently. We've got a lot of listeners that are probably much smaller than your business and what do you think they should take away from and maybe could learn from what you guys are doing at Mark Taylor?  [00:15:18] John: Yeah, I think you know Jeff Mark, Scott Taylor, our founders, taught me a lot of great things about real estate. And if you look at their track record they've never lost a deal or a unit or a dollar in real estate in 38 years of business, which is impressive considering all of the cycles and dynamics of what happens economically. So I think it comes down to when I look at Mark Taylor, we started as a developer, became a manager. Now we consult, we asset manage all of those things. And I think their fundamentals have always kept them in check, right? They've never gotten to a point where, oh, let's be greedy or let's stretch. If you have an investment model, here's your box. Never go outside of that, right? And so, I think back to, 2006, we sold everything we owned except for one deal. [00:16:03] In June of 06 at the peak it was a different environment then. And then we went pencils down post 2007. We built our last deal, San Porte and Tempe, and then hit pause on the other five pieces of dirt. We had a lot of guys just kept going nope, this thing's never going to end. And the first out of the ground in 2011 because we are also a data company, we've been collecting enormous amounts of data since 1985. Yeah. And everything said, tailwind, green light. So, we bought as many pieces of dirt as we could and built the most units from 11 through 15. And it really transformed our business and got us really on the front end of the last cycle. So, I think all of those things happened within our box. And today, we're moving through really the last two deals of our construction pipeline, and we'll probably be on pause or pencils down until the market makes sense again. And I think as simple as that sounds, you have to make sense of the market. So when you're seeing real cap rates below 3%, sometimes, below two and a half in 1920 and 21, you kind of got to scratch your head and say, okay, is that long? That in terms of going through a next 2, 3, 4, 5 years or next cycle. Does that make sense? And the problem with that is if you're not putting in fixed debt or fixed rates and you have guys saying, oh, the music's never going to stop, I'll just put floating rates on these or a three-year arm, that's a problem. [00:17:24] So you're seeing guys that made potentially bad decisions or got outside of their box. Seeing what happens when the market shifts and rates move like they did. No one can control the Fed. And seeing the acceleration of those rates has really created a dynamic where things will start to break. And I think we're seeing that now, or at least those things are percolating.  [00:17:45] Jason: So for the listeners, help them understand at Mark Taylor the how the portfolio works. Are you doing third party or are you owner operators? because you're talking about selling off properties and you're doing management. [00:18:01] So, Give the listeners an idea. We talked about kind of the size of it, but what percentage is stuff that you developed that you've owned or that you own currently and then like that you're managing?  [00:18:15] John: Yeah, great question. So we today, we get really all facets of the business. So our development ownership. So today we have about 5,200 units that are owned and self-managed. So we're about 80% third party. And I think the third party management aspect and also managing your own assets gives us a really nice balance. Yeah. So we're able to, in terms of properties that we own, turn my life back on properties that we own. We get to test new things like centralization and new software, new systems, new methodology. And on the third party side, we get to learn from ownership groups all over the world. We have owners from Japan, Tokyo all over the country large institutions, MetLife, Goldman Sachs, JP Morgan, et cetera, to Mom and Pops. And I think the deal flow that was occurring in 17, 18, 19 and certainly at the peak in 2021 showcased us in a, in terms of how we supported. Transaction capital markets. So every deal that comes on the market, we underwrite and it helps us get a true feel for what's happening in the market from an operational perspective. [00:19:20] A competitor's not going to send me their financial statement, but guess what? I get to get one when they go on the market. And then we see and track through great relationships, how those things happen. Meaning how many people are signing cas if there's 500 cas in one deal, there's obviously appetite for Phoenix. So, really understanding the transaction markets, the capital markets understanding, how guys are achieving debt, equity and all of those relationships has really kept us well-rounded. So, that's fed into Mark Taylor Consulting. So today we, we consult with a variety of developers groups with marketing programs and plans asset management nationally. So, it gives us a lens into a lot of different areas that really. Just allows us to take advantage of our expertise knowledge and data.  [00:20:05] Jason: Yeah, and that's interesting. So one of our coaches that we have he said that it's really surprising that a lot of property managers don't have their own portfolio. They don't have their own properties that they have ownership in. There's quite a few. And he says, that's kind of like going to the restaurant, asking the waiter what's good there. And they said they've never had anything. And so I think there's an advantage, like, if you believe in real estate investing, I think it's a smart move that every property manager should be also building up their own investments. That's where some of the funds should be going towards to build up their own portfolio and their own investments, because, That's, that is smart for the future. That being said, building up a business is probably one of the most profitable things if you do it effectively to get an ROI on that exists. So you mentioned you mentioned focusing on the data. And you have all this data that a lot of people just don't have or don't have the opportunity to see at the level that you are doing it at. What is the data telling you right now that you think property management business owners that are doing third party should be focused on right now? [00:21:14] John: I think that, it's always predictable with each cycle, so I think back to. When we were coming out of the Great Recession, and I still have a, somewhere I have a sign. It was the old Clear Channel Billboard sign. It was just a little standup model. And we had three months free San Palacio, and there were other groups doing four months free. And these were prorated concessions. Wow. And when I think. To that timeframe. And most of my current generation of, leasing agents, service technicians, haven't been through a downturn. It's been a pretty good market since 2012. Yeah. And when I'm in company meetings, they'll say, raise your hand if you've worked in the gfc. And everyone's like this except for some execs. So. Trying to help them understand the cycles of this business is important. So, last year we did a lot of coaching and training on, okay, this is what owners are going to start to look for as the market shifts, right? When your rents are going up 10% NOIs here, you're above budget. There's not a lot of detailed conversations from most owners, meaning you're hitting all of those targets, things feel pretty good. But when it's doing this, And the market's softening, and now rents are going back and retracting. Now what do they do? They start to look at marketing costs. [00:22:26] They dig in like, what's going on exactly? Is my phone number on my website go directly to, someone that will answer it? Are my phones being answered? What's this expense over here? They become expense conscious, marketing conscious and personnel conscious. That's predictable. So my marketing team said, wow, you were right. We're getting a lot of calls now from owners. Of course you are. Yeah, the dynamics shifted and it's not even bad. It's just softened. So wait till maybe you're not covering debt, right? So I'd say that most of our groups are well capitalized. That's not an issue, but that's going to be for certain third party management groups. That's going to be an issue, right? Because they're going to pay debt before they pay your payroll depending on your property management agreement. So how does that work out? You're going to have to start to scale back on expenses. They're going to say, Hey, We need to save $20,000 this month, how are you going to do it? [00:23:13] So it just changes the dynamic of how you function as an operator. And I think back to your original point, us as ownership, that really helps us because we know in terms of our focus of maximizing the bottom line or financial potential of each asset. Man, it's a lot harder in this type of environment and it's going to get a bit harder for the next 12 to 24 months. [00:23:34] Jason: Yeah, I'm a little bit of a conspiracy theorist, but I think leading into the next election, every election year, things get really crazy. So, and it seems like nothing makes sense right now, like everything is just getting worse and crazy and, It doesn't seem to make sense, but I think it's it'll be crazy leading into 2024. So it'll be interesting. And I think, yeah, there will likely, it sounds like, be a wave of owners reaching out, owners wanting more support, investors wanting more help with what they're dealing with and trying to figure stuff out. There's probably quite a few that just I think ever since the pandemic, it woke people up because lot of the investors that were DIY and doing it themselves, they realized that they don't like being the bad guy. And if things do get crazy and things financially get tight, maybe for renters or for owners, right? Then property managers, they have no concern about being the bad guy. They're totally cool with making sure that things work and running it like a business because they've heard it all. Sure. They've been they're numb to all the BS and the stories and the, drama. Whereas, a lot of the homeowners and the property owners like, that's hard. It's hard, it's uncomfortable to deal with those situations. But when things are good, They're like I don't know that I need a property manager. But I think the need will increase. So this is interesting. So, well, is there anything else you'd like anyone to know about this idea of multifamily market oversupply or maybe about Mark Taylor or how should we wrap this up? [00:25:11] John: Well, I would start with just, from a. Current to long term perspective. So I think the over supply is happening. You're seeing it in Austin and Phoenix and other markets, and that will eventually fill up, right? So you have no choice but to stabilize. So your rents might not be what you performed, but are underwrote in your performer. But the reality is, at some point those will stabilize. And I think if you look past the next 24 months, 36 months and beyond, and really look at the last part of this decade, which is weird to say, but the late twenties. I think, we have to look at the country or this environment as there is going to be a housing supply shortage and I'm including single family for sale, single family for rent. And if you just go back to something we touched on earlier the attack on our industry and landlords and developers in general. Rent control is just. Commonly brought up by legislatures every year, including Arizona. And, the things that have, I'll say mostly ruined certain markets. I won't name St. Paul Portland and I could keep going. Uh, But those policies and how they've thought about creating housing. For their constituents and their population has clearly give them a great f And I think if you look across the spectrum of groups or cities or states that have done this well we have to fight for those policies. [00:26:36] And if we don't fight the wrong policies will occur and this housing shortage will just get, I think, substantially worse quickly. So, we have to think about policies. We have to think about doing things the right way, making sure that we have an ability to develop and create supply so that we can house folks that want to move to Austin, Phoenix and everywhere else where people believe in liberty, freedom and all the things that we believe are, founded in the constitution and belief in the US makes sense. So here we are today, Phoenix and Austin being two of them.  [00:27:12] Jason: Yeah, it'll be interesting. If there's a shortage supply shortage coming in, housing, and then people think the solution is rent control it. That's like pouring gasoline on the fire. They're like, Hey, let's just make this worse. It's, I mean, it's wrong politicians that are doing the stupidest thing ever. It was the wrong thing and destroying things. And so, yeah. I think that's everybody listening, property managers have a duty to be involved a little bit politically to prevent this firestorm from happening. And this is an opportunity to go and be the canary in the coal mine or be the Paul Revere shouting, from the horse, letting everybody know, Hey, there's a problem coming. People are going to start trying to push this rent control idea and it's a bad idea if for no other reason than helping the industry. Use it as a vehicle or platform for some self-promotion for your business in your market, and get on some news channels. But I think that would be a great idea because then you're going to look like a profit when this stuff starts to come down and they're implementing rent control and there was a problem and you're like, Hey, I was the one that told you so people are going to start to listen to you. [00:28:16] This was like Winston Churchill, right? Yeah. Hitler started taking over and he was like, Hey, I've been telling everybody, and they're like, okay, you help us out. And if you're that light, people are going to be reaching out to the light when it gets dark. And because they know you, you have been talking about this. So maybe it's time for property managers to get a little bit noisy about this rent control stuff that's coming and not just hope and pray that it doesn't happen. You don't have to deal with it so. [00:28:43] John: No question. No question.  [00:28:45] Jason: Cool. Well, John, really great having you on the show. Any call to action you want to leave anybody with or? How can people check out your company or whatever you'd like.  [00:28:54] John: Yeah, check us out mark-taylor.com. That's mark hyphen taylor.com. Like I said, third party manager development consulting. If you're thinking about, developing a project in Arizona or you want to learn more about, data and terms of multifamily market conditions, Arizona, Nevada will soon be launching a subscription model, so you'll get access to a lot of our great reports. [00:29:17] And data, which will be incredibly helpful for those that are just trying to understand the market and what's next. So, reach out to myself directly. You can find me on the website and I appreciate you having me, Jason. It's always good to talk to great guys.  [00:29:31] Jason: Like really great to have you. Thanks for coming on the show.  [00:29:34] John: Thank you. Talk soon. All right.  [00:29:37] Jason: So, really exciting to have John come on the show today. I think this brought up some ideas of what everybody needs to be paying attention to in the future, and property managers, your job for your investors is to see a little bit of the future and protect your investors and your clients, right? And hopefully we had mentioned also becoming an investor yourself if you're not already doing that. So for those of you that are struggling with your property management business right now, you're like, I don't have time right now to even think about getting a little bit politically active about rent control, or, I don't have time right now to even worry about the data or the future. I'm struggling to figure out how to like make money in my business, or I'm struggling with all the questions my team are throwing at me all the time. Why can't they just think for themselves? Reach out to DoorGrow, we can help you make your business scalable. We can help make it easier and we can help remove that secret pain that a lot of you have that are over 200 doors that deep down, if you add more doors, your life's not going to get better, personally, it's going to get harder. And so we psychologically get reversed towards growth and adding more doors. We can help solve that problem. We just need to make your business scalable and get you out of all the things that you really don't enjoy doing. [00:30:54] And we're really good at helping people do that. So if you'd like to start stacking and adding a hundred, 200 plus stores a year in your property management business and grow it and scale it, we have clients that are doing that and we have proven it and our model works and we can help you do that as well. [00:31:11] So reach out to DoorGrow. And if you're one of the startups or smaller companies and you're under a hundred doors, we can help you get very quickly, get those doors stacked up and start and get the growth going. So reach out to DoorGrow. Check us out to DoorGrow.com. Click the big pink button. We have a free training that's 95 minutes long of me just dropping value, and that's going to change your mindset about what it takes to grow your property management business and to make it scalable. [00:31:38] Check that out and it's free. It's right there. There's a YouTube video on that page that we set up. So, and book a call with us. We'd love to talk with you and see if we can help you grow and scale your business. We're always looking for really awesome growth-minded property managers to be part of our Mastermind community. We have some amazing people in there that are getting awesome results. [00:32:00] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social, direct mail, and they still struggle to grow!  [00:32:26] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Too many property management entrepreneurs tolerate bad clients. They subject their team to crappy owners and are often miserable.  In this episode, property management growth expert Jason Hull explains how property management entrepreneurs can deal with bad owners and prevent bringing them on in the first place. You'll Learn... [04:03] What is a Bad Client? [09:50] Why Bad Clients Lead to Bad Team Members [10:43] You Need to Punch Your Clients! (Figuratively) [15:36] How to Prevent Bad Clients [24:57] Creating Processes to Get Better Clients Tweetables “If you cannot figure out how to make them into a good client, then you need to let them go.” “You get what you tolerate.” “If you just ate ramen, or you just tighten the belt a little bit, you might be able to let go of that bad client or those bad doors right now.” “If you are tolerating a bad client and you have team members, then you're not taking care of your team.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] If you are tolerating a bad client and you have team members, then you're not taking care of your team.  [00:00:06] all right. Welcome Doorgrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. [00:00:47] At DoorGrow, we are on a mission to transform property management, business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder, and CEO of DoorGrow. Now let's get into the show.  [00:01:12] All right, so we just had here at DoorGrow, right here at DoorGrow Headquarters in the Austin, Texas area at the Kalahari Resort in Round Rock, Texas, we had DoorGrow Live, our DoorGrow Live event. It was super awesome, super cool, amazing to see everybody in person. It was really awesome, great experience. I highly recommend that if you want to get in momentum in your property management business, you want to get inspired, you want to be around people that are at operating at a different level than at typical property management conferences. Our clients are special. Our clients are special because they have upleveled their mindset. Just being around them will shift you as well. So come hang out with us. That's one of the things we do is we install a different mindset into our clients. So they start functioning and thinking at different higher level than what's typical. And then we start to teach them really good strategies and ideas for growth. One of our clients man-- I'm so excited for some of these testimonial videos-- one of our clients I think went from like 120 doors to like 400 and something doors. And like, I don't know, he like doubled his doors in like four months and he was working with our acquisitions coach. Went and got like, went through a whole acquisition. Like he wouldn't even have known how to look for a deal, let alone have handled the whole thing. He literally just did whatever he was told by his coach. Like, "say this. Send this email. Don't do this." He just did it and now he's going to be adding a bunch of doors. Asked him if he thought he could get to a thousand doors and he said, "oh yeah I'll do that in like maybe two or three years, no sweat." we've laid out that roadmap, we have the DoorGrow code of what a company needs to do in order to get to a thousand doors. [00:03:01] And those of you listening that you're already a thousand doors, maybe your business could be optimized. Maybe it could be more fun for you. Maybe we can improve your team. Maybe you're losing more doors than you're getting on right now. Our clients are adding more doors than you're getting on, and you don't have to do it through acquisition necessarily. You can just add doors. And so if you're having any of these issues, reach out. Like we would love to help you.  [00:03:26] So my topic that I wanted to talk about today, we, Sarah, my wife and COO of DoorGrow brought two clients up on stage and said, " Jason doesn't really know exactly totally what we're going to be doing." [00:03:39] And I was like, "okay. I like a little chaos and a little risk," so she brings them up and was like, "Hey, basically we're going to coach them in front of everybody." I was like, "okay, this could go really horribly wrong or really awesome," but I didn't think it'd go wrong. And it was great. So one of our clients got up and he was just talking about the biggest challenge in his business right now is just a really bad owner. And so we had this great discussion and coaching and conversation with the entire room about bad clients. And so the topic for this episode is how to deal with bad clients or firing. How property managers can deal with bad clients or fire bad clients, right? How do we deal with them?  [00:04:25] One thing that's important is that you should fire some. If you cannot figure out how to make them into a good client, then you need to let them go. It's important to let bad clients go and I think that's the hallmark of a seasoned property manager is that you fired some shitty clients that you don't want to have. Let's chat a little bit about this. So bad clients, what they look like. They're clients that do not respect you. They're clients that do not value you. They're clients that treat you poorly. And one of the things I want you to realize is that you get what you tolerate. And so if you have tolerated this kind of behavior, you may have created clients that don't value you or trust you if you aren't as effective in your sales pitch in creating trust, which is really what true sales is, it's getting people to trust you. Not manipulating, not tricking them. You legitimately have a solution to a real problem that you can solve, and they want that, and you're able to charge a fee for that, right? That is a real business. The big challenge though, is this was like 10% of his portfolio. This one owner. This would be painful to let go.  [00:05:49] So the usual way that I coach clients, if they have a, like sometimes when clients first come to us, especially if they're in that first sand trap of maybe 50, 60 units or less than a hundred units, their whole portfolio might be bad. They might have a large percentage of accidental investors, people that waste their time, people that are pushing back that don't respect their boundaries. And so it's important to set a rule. So my usual recommendation is set some sort of rule. We want to get you growing and adding good doors to offset those and then set a rule like a three to one rule or a five to one rule that every time you get three bad doors or five, I mean, yeah, every time you get three new doors, three good ones, or five good doors, you and your team have permission to let go of a bad door. Or maybe you do it by owners. You just set a rule. Maybe you already know, like you knew the client he wanted to get rid of. You just need to figure out how do we let go of that person. Now, that's one idea. That's if you want to replace that income. But if you're dealing with a shitty owner and the difficult situation, I want you to take a step behind that question because this is the question that a lot of people think superficially. They need answers. How do I replace this income? What I think is a better question is to take a look at, instead of trying to replace all that income before you let them go, is to figure out what amount of additional revenue would I have to be generating or additional clients or business would I have to be generating in order to be able to tolerate letting them go, which is different. [00:07:29] So figure out what's the minimum amount that I could scrape by with and survive with to get rid of them as soon as possible. Because as soon as you get rid of them, it's going to free up a lot of attention, a lot of bandwidth. Your revenue will dip, but you just need to offset it. You might find that you could survive. [00:07:49] If you just ate ramen, or you just tighten the belt a little bit, you might be able to let go of that bad client or those bad doors right now. And what that does is it frees up a lot of head space. It frees up a lot of time. It frees up bandwidth so that you can go replace those doors faster. This is similar to the advice that I gave to my clients that were there that now are full-time, like owning and running their business together. These business partners, when they first came to me though, they were starting a property management business and they wanted to quit their day job. They both had jobs and their dream was to start this business together and offset all their income. And I said, don't try to offset all your income. Figure out what's the bare minimum that you can each pay yourselves and survive on. Like tighten the belt, figure out what that is because if you can just get to that level and then quit your jobs and then go all in on this business, and we teach you all the growth strategies and you start to grow rapidly, this is exactly what they did, they then could grow a lot faster. So they let go of their jobs and they started growing a lot faster and they had to get some doors before they could do this, but once they hit that lower level that they decided they could survive on, then they were able to invest, go all into the business and grow a lot faster. [00:09:11] Same thing with firing clients. Like don't wait until you offset all of the income. I once had a client come to once and he wanted to offset all of his income and he was a pharmaceutical rep making like six figures and he was like, "well, I'm going to start adding some doors and build up this new business, but I'm going to do it kind of part-time and I'll wait until I offset all my income." and I was like, that's not going to happen very easily, if at all. And I think he underestimated the amount of work it would take to start a business. He didn't really want to spend time to do it. It was kind of a dream, and he was pretty comfortable in that job, right? Had a lot of freedom and was pretty comfortable and they paid him really well, so it was hard to give it up. So, let's just keep that in mind.  [00:09:59] All right, so the other thing about firing, I think that's really firing clients that I think is important to recognize is you need to protect your team. If you are tolerating a bad client and you have team members, then you're not taking care of your team. You're going to lose A players. B players will tolerate shitty behavior and they will tolerate shitty bosses and they will tolerate a bad environment. A players won't. By keeping on bad clients, you are losing your best people. If you wonder why you have a lot of turnover, it might be because you're not protecting and insulating your team from people mistreating them or treating them poorly. You haven't set healthy boundaries with your clients and started to protect your team, so make sure you're protecting your team. So fire, protect your team.  [00:10:51] Next item, punch them in the face. Okay, this is metaphorically, I am not recommending violence in this situation. What I am saying is that metaphorically or figuratively, you need to punch them in the face, sometimes these bad owners. Sometimes bad owners are high D personality types on the disc profile, which means they are drivers. They're short, maybe quick. They want results. They want like information quickly. They want to see things moved fast. They do not care about stories or excuses. Let's go! And in order for them to respect you, and a lot of investors or wealthy people might be high D. They're driven. Just like a lot of entrepreneurs, and so if that is the case, you may need to punch them in the face. Like sometimes you'll see two guys and they're like, they have a beef with each other and they like, they're arguing or whatever, and they get into a fight and then they're best friends for forever, right? They respect each other after that. Sometimes you need to punch these crappy owners in the face in order for them to respect you. You need to set boundaries right at the beginning. Boom! And say, no, I'm not going to do that, Mr. Owner, and here's why. They're just waiting. A lot of these owners are just waiting for someone to set boundaries with them to show that they know what they're doing. They cannot, high D cannot respect you if you give in to their demands. They cannot respect you if you cave to their bad behavior. Like they will test you.  [00:12:27] A lot of guys that have dated women or been in the dating scene know, have heard about shit tests, right? Like maybe your spouse does this to you, like they will test you to see if you really are who you say you are, or try to showcase that you are on the tint. They will challenge you. Your clients are going to challenge you. They're going to test you to see if you really are going to stick to those fees. If you really are confident in your business, if you really are going to stick to your contractor agreements, right? They want to see if you have integrity. Integrity in a building is strength. How much integrity does the steel have? Do you have the integrity of steel? Are you strong? Can you maintain your boundaries? Do you know your limits? Can you punch them in the face? If you can punch them in the face in the beginning, a lot of times owners will say "finally, I've found a property manager that I can respect that I don't have to tell what to do, that I don't have to micromanage that owns their stuff." they're looking for that extreme ownership, which is a great book by the way. I love listening to the audiobook because these guys sounded like they gargled sand, like in the deserts of Ramadi, right? So they're like, Jocko Willick and Leaf. They're like, "you need to have extreme ownership. This is what we did in Ramadi, right?" [00:13:53] I don't know if that's a pretty good impersonation, but I love listening to the audiobook. So I recommend the audiobook, but these guys know they take extreme ownership. They're accountable for things, but they also probably are willing to punch somebody in the face. It's like being shitty or mistreating or whatever, right? So make sure you punch them in the face and you do that early during the sales process, and you will be probably the most likely to get them as a client because they go to everybody else, they're not going to find what they're looking for, which what they want is peace of mind. They want safety and certainty, and you cannot feel safe with somebody that caves to the whims of everybody. That's not a safe person. You're not a safe property manager to manage their property. If they think you're going to fold on every vendor saying, " I'm going to charge way too much," or you're going to cave on every tenant that's going to say, "well I want to paint the house purple," or whatever they want to do. You're like, "well, okay." They're not going to trust you. They need to know that you have what it takes. You need to show them that. And then they're going to be like, oh my gosh. You're the property manager for me. You just need to say, "no, Mr. Owner, we're not going to do that. And here's why. We know this. We know what to do. This is how we do it. Our way works better than yours. By your own admission, you're coming to us for help because things aren't going well as you have told me, and we don't have that problem. Our clients don't have that problem. We are better at this than you. So either you trust us and respect us to do our job, and we will not be perfect, but we'll get it. We'll fix it, we'll make sure we get it right eventually, but we're going to do this better than you. We're good at this and you can trust us to take care of stuff." And they'll go, "that's all I wanted. That's all I needed. I just wanted that safety and certainty. Just wanted to know you had the strength to do what I would want to be done." [00:15:44] Okay, the next step is you need to figure out after you've dealt with a bad client, maybe you forgot to punch somebody in the face. Maybe you forgot to protect your team. Maybe you didn't fire them soon enough. Now you need to make sure you learn and prevent this situation in the future. So how do we learn? And how do we prevent? Well, when you need to take inventory, what did we do to create this situation? What did we do to allow a client like this into our portfolio? Why did we allow this? What happened? Where was the breakdown? Do we need to or can we improve our agreements? Do we need to improve the conversation or during the sales process when we review the agreement and tell them so they can hear and see what it is we're going to do, so, Instead of just sending the agreement, can we go through the agreement with them to align them towards our way and make them a better client? Can we filter better? Can we qualify during the sales process and prevent bad clients from coming in or set better expectations during the sales process? All of these things, Allow you to qualify and get your clients potential clients to level up. You can turn them into better clients during the sales process. So learn and prevent. Can we create new processes and procedures that insulate and protect us from owner situations like this, right? You need to learn. So we want to make sure that our clients feel safe and they might need to be punched in the face, and they might need better boundaries, and they might need better guidelines, and they might need better training or education during the sales process on how to be a good client. [00:17:30] We have this in our agreement with our clients, how to be a good client. And there's a list, right? And during our sales pitch, one of our slides in our pitch deck is the three commitments we require of people that come into our program of what's required. Like do you measure up? Do you qualify to be with us, right? You need to set boundaries and you need to use that, that sales tactic of qualifying and of prising yourself. You're the prize. You solve their problem, they have problems. They're paying you to solve those problems, which means you're the prize, not them. Mindset. That's a mindset shift.  [00:18:12] Okay, so the next thing, get clear on your boundaries, right? So after you learn and prevent, get clear what are our boundaries? And recognize people will test these boundaries. So how do you pass the test instead of fail the test? So if somebody's setting boundaries, you will either pass or you will fail a test. If somebody's trying to test your boundaries you'll either pass or fail. So make sure you set your boundaries. What are their boundaries, right? So make sure you're passing the tests. It is it's so helpful to recognize that everybody that matters, or your spouse, your kids, your clients, tenants, they're all going to test your boundaries, so you need to get clear on what those boundaries are, and when a boundary is crossed, you'll know it because your nervous system will not be happy. You will not feel good in your body. You'll feel guilt or shame or embarrassment, humiliation, lack of power. Whatever, gross, icky, right? These are when people order situations overstep or go over your boundaries, or you aren't respecting or take taking care of yourself. You need to take care of that little you on the inside. It needs your protection. You need to take care of you. You need to know that you will protect you no matter what. Just like your team needs to feel safe. Your heart needs to feel safe. Your mind needs to feel safe. Your body needs to feel safe. These are like three children that you control. You are not your mind. You are the person that thinks the thoughts. You are not the thoughts. You are not your mind. You are also not your emotions. You are the person that feels the feelings. This is another vehicle. Your mind is a vehicle. Your heart is a vehicle, and you are also not your body. You are the person that moves the body and uses the body and experiences the body. These are like three unruly children on the bus, and you should be driving the bus, and if you let any of these drive the bus, it can be a bit chaotic, right?  [00:20:21] If your brain's driving the bus, everything's scary because the brain's job it's to avoid pain and scare the shit out of you and protect you. So it's going to like look at every logical angle. How can I avoid feeling these uncomfortable feelings? And the heart and the emotions needs to feel everything. It's the only thing you can do with the feeling. You need to feel the uncomfortable feelings. You need to feel the sorrow of the sadness, the crap, the happiness, the joy. You need to feel it all. That's part of being human, that's life, that's feeling alive. The full breadth of human experience. We need to feel it all, but the brain doesn't want us to fill it all because the brain's like, well that didn't, I don't know if I liked that last time. That was uncomfortable. And it judges everything. And then we have our body, and our body wants like sex and it wants to taste stuff and it wants to get rest. And like our body has these needs. So we can't let our body be in control, right? Like our life can be really strong chaos. We're just letting our tongue and our genitals and our physical needs like take complete control of the bus, that would be a really bad life, bad situation, right? If our heart and emotions were in control of everything, we'd be kicking holes in the wall. Like we would just be emotional about things. We would be up and down, right? We would get way too excited about some stuff, right? And logic then steps in and like controls a little bit of that, right? And we have some reason, and some logic we're like, how much would it cost to kick a hole in the wall? How much would it cost to repair that? So we start to make logical choices. What would be the ramifications of this relationship or doing this thing or taking this risk, right? So, Then we have our intuition, right? [00:22:00] Another vehicle that I didn't mention, but we have another vehicle, our intuition, some might call it gut, some might call it God, source, whatever. Our spiritual side that we need to tap into that is a higher faculty than our logical mind that gives us clues and lets us know things that need to be done that sometimes don't make logical sense, but they end up being right and deep down they're right. A lot of really logical people cannot listen to intuition, which is a higher faculty. That's why the intuitive people have a one up on some of the most logical people. They're too logical, they're too logical, and a lot of times they're too logical because they're really just trying to avoid feelings and it cuts off their intuition. [00:22:41] So going back what I was why I'm going over this is we need to set really good boundaries and we need to take care of these four vehicles, our intuition, our mental, our emotional, our physical. We need to take care of these vehicles, these little children that we kind of manage. We need to be listening to all of them, and we need to figure out what our boundaries are. What are we willing to do? What are we not willing to do? And then we need to figure out how to avoid the temptations that cause us to fail at that. And sometimes one of the things that came up is one of our clients was very transparent during one of our awesome speakers and said that sometimes when there's conflict with vendors and some of the vendors are his friends, like doing stuff, he's kind of a pleaser and it's hard to set boundaries with them or to let them know, have uncomfortable conversations that they're not doing things right or something needs to be done faster or stuff like this. And so what within ourselves, the kind of question that she asked was like, what within ourselves thinks that we. Deserve to have those things happen to us, or why within ourselves are we so concerned with being liked, and a lot of times it's from when we were young. People overstepped our boundaries. People treat us poorly and we had to like fawn or please to get people to like us in order to feel safe. And so, there's a great book I read recently I really enjoyed, called The Courage to Be Disliked. All about Adler, Adlerian psychology and which is different than Freud and young. Really interesting. I think he was way ahead of his time. The world wasn't ready for him back then. He was a contemporary of both of those young and Freud. But Adlerian psychology has become very popular in Japan, and I believe the authors of the book are both from Japan, and it was translated to English, I think. [00:24:41] So really awesome book. The Courage to Be Disliked. And the sequel is the Courage to Be Happy or something like that. Great books. We need to have courage, the courage, the willingness to feel those uncomfortable feelings and be disliked in order to respect our boundaries. And so that's something else that we could do a whole episode on this, right?  [00:25:05] So the next piece is to build process, right? So take a look at your process. This might be connected to learning and preventing. This might be connected to getting clear on boundaries and what you want, protecting the team, but coming together as a team. We had Errol Allen at this event. He's a process expert and he talks about getting the entire team together to work on a process. Like who feeds the process, who works on the process, and who is affected later, or what, the output affects of the process affects them, right? So we want to make sure that we get all the stakeholders involved and we develop a really good process. So that we can, as part of that learning and preventing and avoiding the temptation and passing the tests is creating a really good process. And so these are the main things that we discussed in relation to dealing with this challenge of letting go of clients that are not treating you well and setting really good boundaries. Now, If you don't, then you will get caught in the cycle of suck. Everybody's heard me talk about this before, which means you take on crappy owners, you then have crappy properties, you then have crappy residents because they're frustrated about the crappy property and the crappy owner, and then you're going to have crappy reviews. Then you're going to attract more crappy clients, right? And this sums up the property management industry in aggregate. This is the challenge in why most property managers suck. Most of your competitors you probably believe suck. It's because they're taking on any client. You need to set some rules, set some boundaries, and let go of some bad clients and that will get you out of the cycle of suck. Why do you want to be out of that? Some of you think, well, that's just property management. That is not very profitable property management. This is why the average property management business has like 4% or 6% profit margin and makes very little money. [00:27:00] Our clients sometimes have 10 times those amounts, a profit margin. We've got clients doing 20, 30, 40, sometimes 50 or 60% profit margin, right? And so to have really good profit margin, you cannot have really bad owners and really bad systems and you can't be caught in the cycle of suck. You've got to let go and clean your portfolio up and you'll be a lot more profitable. because one bad property can take easily 10 times, just maybe even a hundred times the amount of work as a good door, as a good property. Okay. All right, so hopefully this gave you some ideas. You're probably thinking right now about a client. I know you. You're thinking about a client right now. You're like, I'd be so happy if I could just get rid of that. My team would love if we could just get rid of that person, if we could just get rid of that one property, that would be great. This is your business. It can be the business of your dreams, or it could be like your master and you could be a slave to it. Which one do you want? Any business at? Any size could be either one. You get to decide this is your business, so be the entrepreneur, not the property manager. Protect yourself and let go of some of those bad clients. And that's it for today.  [00:28:17] So, if you are a property management entrepreneur and you want to get your either add doors or you want to finally dial in the operational side, you're curious maybe about how does DoorGrow help with process and their, what's their DoorGrow flow software and how do they help with sales and what's their CRM software, DoorGrow CRM, and how do they help with operations and what is this DoorGrow os and why is it so much better than eos? And how are they helping property managers get their teams in a alignment so that they can go from pretty good growth to having like 300% growth in a year, like some rapid growth where the team are all moving the business forward, like and thinking like an entrepreneur. How do we finally get great team members? Our client that just doubled his doors I was telling you about, since joining DoorGrow, he fired most of his team and replaced most of his team because he realized by getting clarity in working with us and getting the hiring stuff going and vetting his team, he realized he did not have the right team. He didnt have the A players, he didn't have believers. So we need to help you get a really great team and then install DoorGrow os and then make sure you have processes and if you have those three system people, system, process, system. And planning system, you then have a scalable business. So now this client he has a business that can scale, right? We want you to have a scalable business, a business that if you lost team members, you could get back up to speed very quickly, right? Whereas most of you probably just did Russian roulette hiring until you eventually got enough team members and fired enough team members that you had a good team and you finally installed decent culture and then you were finally able to break 600 doors. You can't break 600 doors with a crappy team.  [00:30:04] You'll last see so many people in that two to 400 door range struggling. You get to 500 and it's painful. If you feel like right now, if you're honest with yourself, deep down that if you added more doors right now, if you added another a hundred doors this month, your life would get shittier and worse then your business is not set up to be scalable. The business owner's life should get better the bigger the business gets and the more money you have. And that means your business is not set up to be scalable. Let's get your business to be scalable. Reach out to DoorGrow. You can check us out at doorgrow.com. Go to our homepage, the big pink button. "I want to grow." click that and there's a free training. You can book a call with our team and you can watch our testimonials and case studies and we're going to blow your mind. And we're going to help you realize why marketing doesn't work very well generally, advertising generally doesn't work very well for growth, and why you've been struggling to get your team and business in alignment so that you enjoy your day to day. Let's get you there.  [00:31:02] Until next time, to our mutual growth, I'm Jason Hull. Bye everyone.  [00:31:06] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:31:33] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

If you are a property management entrepreneur, you have probably experienced isolation. Being an entrepreneur is often a lonely profession, but it doesn’t have to be. In this episode of the #DoorGrowShow, property management growth experts Jason and Sarah Hull discuss why every property manager needs a tribe to keep them accountable and celebrate their wins. You'll Learn... [01:45]  Don’t Surround Yourself with Negative People [06:30]  The Isolation of Entrepreneurs [12:45]  The Benefits of In-Person Events [17:11]  Why DoorGrow Spends 6 Figures Annually on Coaching [20:00]  Don’t Try to do Everything Yourself! Get Support [30:34]  When Someone Else Knows What You Need Better Than You Tweetables “Sometimes what's constraining us in growth is something so simple and obvious that somebody else could see.” “Your growth will be very limited if you are surrounded all the time with toxicity and negativity.” “You need to be around people that don't believe your excuses and that can see your limiting beliefs.” “It's very challenging. It's a tough industry. It is not for the faint of heart. But it can also be very rewarding.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason Hull: You need to be around people that don't believe your excuses and that can see your limiting beliefs. And they're like, "that's gross. Like you don't need that. That's bullshit, right? Like you don't need that belief. Like it's actually like this. This is how I see it." And that changes your beliefs if you hang out with those people. [00:00:16] Welcome DoorGrow hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder, and CEO of DoorGrow here with Sarah. Do you want to introduce yourself? [00:01:20] You do it. [00:01:21] Sarah the COO of DoorGrow and my wife. Now let's get into the show. " You do it." All right.  [00:01:31] You're on a roll. I'm on a roll. All right. Welcome everybody. So today I was like, Sarah, what should we talk about? And so the topic we decided to talk about is something that's been really beneficial to us. We want to talk about why as a property manager, you need a tribe. You need people as a property management entrepreneur, business owner, you need a tribe or you need some people to support you in your positive goals and your growth. And one of the things that I've seen in the industry a lot is there's a lot of people in the industry-- property management's tough, right? It can be tough, and it's very easy to create a tribe or have a tribe or be in groups in which everybody's negative about property management, right? Like where they're just sharing wine memes and like, "Hey, it's the end of the day... property management... tenants, argh!" right? That's not what we're talking about. We're talking about the opposite. A tribe that helps you focus on the positivity and moving your business forward, and that's been super beneficial for us in our business. So maybe Sarah can tell us a little bit about that so. [00:02:40] Sarah Hull: All right. Well, I think in property management there's a lot of different challenges. We can all agree on that. So it is easy to kind of jump on that train of, "hey this is hard" and "my life sucks" and "I don't know why I do this" and "sometimes I don't get paid enough money to deal with this." So it's very challenging. It's a tough industry. It is not for the faint of heart. But it can also be very rewarding, and I think surrounding yourself with positive energy and positive people versus the naysayers and the people who want to, focus on oh, how bad their day was and how hard this is, and how challenging this is, and how tired they are, and that they're just constantly drained. If those are the people that are surrounding you, and that's what you're hearing, you will like, whether you realize it or not, you are programming your brain to think this way. [00:03:46] So if we're surrounded by people that are constantly negative and they live for the weekend and they're like, "oh, I'm going on vacation. I can't wait and don't bother me, leave me alone. Like if you don't just truly enjoy what you do and you are being dragged down constantly. Your brain is absorbing all of this. It's like a sponge. So really what you're doing to yourself is, it's a form of self-sabotage, and it's really important to get yourself around people that are just vibrating at a higher energy. I know that sounds really woo woo, but that's something that over the last few years I've had to work really hard at. I've really become a professional at cutting people off and cutting people out if they're not a champion of me if they're not somehow, helping to promote me or helping me to think, more differently or really proud of what I've done. Because there are always people who are like, "oh yeah, I don't like that guy. I don't like that girl." Like, "oh, she, yeah they're great and all, they've got a bunch of success, but it came because they don't do things the right way, or they, they took an easy way out. So if you're surrounding yourself with people like that, you've got to minimize all of those thoughts and all of the time that you're really spending, so that you put yourself in a better position in order to be positive, in order to grow. Your growth will be very limited if you are surrounded all the time with toxicity and negativity.  [00:05:33] Jason Hull: Yeah. I think it's really important to be around people that don't believe your excuses, right? If you're around people that are like, "yeah, that's how it is. Yeah, it sucks sometimes, and that's just like the way it works" or, "yeah, it's difficult to grow or yeah, that's hard. Or, yeah, I'm dealing with that too." Right? Then you're in a support group for a problem, right? That's a support group for a problem, right? That's not helping you move past it. And so you need to be around people that don't believe your excuses and that can see your limiting beliefs. And they're like, "that's gross. Like you don't need that. That's bullshit, right? Like you don't need that belief. Like it's actually like this. This is how I see it." And that changes your beliefs if you hang out with those people. Because their beliefs is are more true and more accurate, they're not going to change theirs down to your crappy limiting beliefs. You're going to uplevel yours. And we all have those at any level. We all have them. And then we talk to somebody that's at a higher level and they're like, "well, I see it this way," and we're like, "oh my gosh, I couldn't see that before." So you need a tribe. So one of the challenges that is created, I believe naturally for entrepreneurs is entrepreneurial isolation, like we're isolated. Especially in early stages. You probably felt this when you first started your business. It's all me. I'm all alone.  [00:06:49] Sarah Hull: Yeah. Well, I think I've really-- I felt that until I came to Texas.  [00:06:56] So what was different about Texas?  [00:06:58] Well, I think everything was really different about Texas, but I think just the mindset of people here is so different. And it's a lot easier to be around people that just, they think there's more, they think it's easy. I think something that I kind of had a lot of when I grew up was: making money is hard, like, you've got to turn, you've got to work, you might need to work, 2, 3, 4, sometimes jobs. Yeah. In order to make the money that you want. And the mindset that I had for, a long period of my younger life was. Hey, if I want more money, I've got to, work more hours, or I've got to get a raise, or I've got to get an extra job. So, for years of my life, I had just worked multiple jobs, two or three at a time so that I can make the money I wanted, and I just thought like, this is what you do. This is normal. And it's hard, like if you can do great things, but it's hard and you just have to, buckle down and like, dig your heels in and just plow through. And only within, I'd say the last three years that I realize it's not hard. It's hard if you make it hard. It's hard. If you think it's hard and it's hard If you're surrounded by people that tell you it's hard then it's going to be hard. You best bet it will be hard. But it doesn't have to be hard. It really doesn't. And just your own mindset can really prep you for what you're going to receive. So if you think, "oh it's hard and I've just got to grind and there's no other way to do this. That's what you're going to get. [00:08:40] Jason Hull: I think every entrepreneur goes through kind of this journey. From a young age, entrepreneurs are a little bit different. We don't value safety and certainty as the highest priority. We are a little bit more adrenaline junkies. We're a little bit more focused on, taking risks. We're willing to work longer hours and harder to like get something going. In order to have more freedom, we care more about freedom than just staying safe and having a safe, stable job. And we think the world can change. We see that things could be better. We want to improve everything around us. We're like, why are people doing it that way? We're not satisfied with the status quo. So what that creates is, that creates a situation in which we're weird. And we get a lot of friction and everybody around us is like, why are you being weird? Like, why don't you just go along with what everyone else is doing? Just do what everyone else is doing and be safe. Like, why don't you just go get a job? Any entrepreneurs ever heard that before? Right? They don't get us. And so we start to learn. As an entrepreneur, "I probably shouldn't say anything." I should probably like not put out there what I'm doing. I need to isolate more because I'm getting so much friction. [00:09:53] Sarah Hull: People just, they don't understand it. They don't get it. But you have this higher vision that other people just don't, they don't have yet, and they can't see it. It's your job though, to help them see it. So you small yourself and you make yourself smaller and more little, and you just say, "Hey, I'm going to I'm just going to do my own thing. I won't worry about it. Then you are taking that opportunity away from not only yourself, but from other people. To see, hey, there's more. This isn't it. You're not done yet.  [00:10:31] Jason Hull: It's really difficult though, if somebody's wired that they're at their core. They're like, I want safety and certainty more than freedom and more than taking risks you're not really probably going to change them or convince them. And because we're a minority, we're like, we're rare as entrepreneurs. In order to escape that entrepreneurial isolation that we've all created around ourselves where we think we're on an island and it's all up to me and I've got to get my team to do stuff, and we feel weird and we're different... we have to start connecting with other entrepreneurs. Then we start to realize we're not weird. I went through this and when I first got my first coach, And he was like, described what entrepreneurs were like, and he was like this. And I hung out. I went to an in-person event and it was a group of entrepreneurs and they were all making way more money than me. I felt like the ant in the room, but they all were kind to me. They all loved my ideas. My coach at the time was like, you have a multimillion dollar business and you don't even know it. I started crying because he could see that I had the capacity to do something that I couldn't even see it the time. And that's why it's so important to get around people that can believe in you. [00:11:35] And that's the thing, if you're around other entrepreneurs that are high functioning. Where you have good coaches, good mentors, good people that you're connected with, good friends, whatever, they will see you in your greatness. They'll see you in that you're playing small. They'll see that there's something better for you that you can't even maybe see for yourself. And that changed me. It changed me as a person. That event changed me because I was like, whoa, all these people have multimillion dollar companies and they all were listening to my nerdiness and what ideas I had and they thought I was helpful and valuable and if they can do it, I can probably do it too. And that was like, and I just thought it was, maybe that was impossible, like, but if they can do it... these people can do it. Maybe I can do it right.? So, and that's part of the why we invest a lot as a company and why we're in a lot of different masterminds and programs ourselves, and why we offer a mastermind to our clients, which has become the main, our main business. We have our mastermind groups for our clients. So do you want to talk maybe about some of the groups that we've been in or some of the benefits we've seen in being part of some of these groups that we're in?  [00:12:46] Sarah Hull: Yeah. I think even over the last couple months, we've gone and done several, like in-person mastermind styled events. And some of them last minute you were like, "oh, we shouldn't, I don't think we should go. Our business doesn't need anything." Yeah. Like, " we're good right now. We already know what we're doing. We just need to do it." Yeah. And I think sometimes that's exactly when you need to go. Yeah. So even that event that you said, "oh, I don't know if we should go and do it," we had planned to, and then about a week beforehand, Jason's like, "oh, I don't--" [00:13:20] we had so much. [00:13:21] "Like, we're good. Like we have so much on our plate. We already know what to do. We just need to buckle down and do it and get it done." And I said, "I think that's why we need to go." [00:13:31] Jason Hull: And it was really good. Like I had some serious breakthroughs, like I broke down and had a breakthrough. And there was stuff that I just couldn't see and being around, I mean, these are high functioning people that we got to hang out with. You're talking about Puerto Rico, right? Puerto Rico, yeah. Yeah. Our Puerto Rico trip. We did another really cool one in Houston we did with a different group of entrepreneurs. Yeah. A lot of these are coaches, so we're connected heavily to the coaching industry. We went and did the Nashville. We went to another group there two times to Nashville. Yeah. Twice. That was a game changer for us as a company. [00:14:03] Sarah Hull: Both times. And that's the thing is, you sometimes you might go to something and it's really good and then you go wonder the second time, like, "am I going to get as much out of it? Yeah. Is it going to be as good? What are they going to do this time?" And it was absolutely just as good as the first time. And I think the first time you walked away with like 77 little like ideas and I didn't see your list this time, but I, it was huge and big list this time too. It was huge. So there was a big, long list of things that sometimes it just takes a person on the outside looking in-- Yeah-- to say, "oh, well why don't you do it like this?" And you're like, "oh, I can't even believe I missed that."  [00:14:40] Jason Hull: We still need to sit down and go through the last event we just got back from Yeah. In Nashville and go through all that. Haven't even been back a week yet. Yeah. But we've got our conference this week, so we're getting our clients together so they can experience an in-person connection. So that's another piece. A lot of these masterminds, there's a virtual component. We have that as well, but the ones we're talking about where we get the greatest benefit, there's been virtual components to those, but the in-person really is dramatically different for us.  [00:15:08] Sarah Hull: It is different. It's just so different. When you get face-to-face with people, you really get to connect with them. I think sometimes. It's in the unplanned moments too. It's like, "Hey, we're in the taxi going to this place," or we're on the bus, driving around and-- totally-- like, there's no structure to those moments. It's like hey, we're going to go from here to here, and to do that, we're going to get on the bus. But it's the conversations that are happening on the bus. We're all sitting there, and you sit in different spots and you talk to different people and you're like, "Hey, I heard this is what you do and I'd love to pick your brain on this." and there's so many people, especially in that group in Nashville, there's so many people that they've just been there, done that. Like they've tried it, they've won, they've failed, and they're like, I'm completely willing and open to contribute to other people. And I think that's the other component of it is you can't go into a group like this. And say, "I'm going to take. I'm just taking, yeah. I'm not telling anybody what I do. I'm just going to hide. I'm not telling anybody because this is like my secret sauce." Yeah. Get the secret sauce all over everything. Tell everybody you know, "Hey, this is what I do." This is how it works. Because no matter how good you are, even if you're like, "Hey, things are freaking awesome for me," that's great. You can still get in a group like this. And if you come in and say, "Hey, like this is amazing. This is what we're doing. This is how we're doing it," you are still going to get some ideas because there's going to be something that someone says and you go, "oh I didn't even think about that." yeah. Didn't even think of it. And a lot of times it's like you're just too close to the fire.  [00:16:45] Jason Hull: Yeah, like one of the in between moments we had in Nashville was with our friend Sharon. And Sharon, he's the CEO of a company that just posted like, I think they publicly posted they had 4 billion in quarter one in  [00:16:59] Sarah Hull: revenue, not just total like 4 billion in. [00:17:02] Jason Hull: So this guy knows a thing or two. And so, and he shared one idea that was so simple it could potentially double our client retention rates. And these are the type of things that we want to bring to the table for our clients. Like we're always innovating, always looking for what's the best, what's working really well, how can we optimize things? And a lot of our best ideas don't come from the property management industry. They come from like us playing our own game of business. In the coaching industry, which is what we are now. We do websites, but we started as a web design agency. But we're no longer really an agency. We're more of a coaching business and running a mastermind but we're always learning better and higher systems and ideas that we can then give to our clients. And our clients are also contributing really cool ideas like our last DoorGrow Live event. This one we have people presenting too, from within the group, like they're sharing. But we had some amazing ideas shared at the last event where everybody was like-- everybody was like, no matter how big, "I'm starting a maintenance company. Yeah. Or I'm going to start doing this." because they got this idea that was unique and different than I'd heard in the industry of how to make this work more effectively. Really cool ideas. We're just stacking cool ideas all the time. I don't think there's any other program out there that is able to stack cool ideas. Even, you know, NARPM's a really great organization. There's some really great organizations out there and people that do coaching. There's some other masterminds, but I don't think anybody moves as quickly or invests as much money as we do into our own coaching and into masterminds and working with high level people and creating connections, relationships, and so, I don't think there's anyone that moves as fast as us too. Like we move really fast as a team because of our amazing systems. It's the same system we teach clients to do for planning DoorGrow os and all this kind of stuff you've probably heard me talk about on the podcast before. [00:18:54] I want to challenge something you said. You said moving to Texas was different and I think. I think what's really different is Austin moving to Austin area. Austin has a very entrepreneurial community. It does. That's kind of unique to the area, and like I lived in LA area and... all right. SoCal, everybody from Pennsylvania think SoCal, like if you've been to Pennsylvania, like up there. Sorry, but I don't think it's that great, but.  [00:19:24] Sarah Hull: I'm also sorry if you live in Pennsylvania,  [00:19:25] Jason Hull: SoCal is pretty great, except the politics is horrible, but, and there's like, yeah. And some of the areas are getting really bad, but that's why I left. Right? But SoCal in LA, you think there'd be a lot of entrepreneurs and whatever, like people are all about themselves. Like, it was really difficult to connect. I couldn't find groups or communities. I would go to some events and it just wasn't the same. And it's very different here. And a lot of people here are from California, which is, it's like all the best people escaped but it's an awesome community here that allows us to connect with entrepreneurs and destroy that entrepreneurial isolation, right? That I had mentioned. Now, a lot of people don't invest in these things because they think they can figure it out themselves. I mean, is every entrepreneur's default thing. I'm smart enough, I can watch some YouTube videos, I can read some books. I can figure it all out myself. I can do it. That's like stage one. You think you're the hero, you're a king. You can do it all on your own. Right?  [00:20:19] Sarah Hull: But you know, and it's not even that you're wrong. Because you can. Yeah, it's true. You can do it by yourself.  [00:20:24] Jason Hull: Just take a decade longer.  [00:20:26] Sarah Hull: It's just going to be infinitely harder. And I think one of the beautiful things about connecting with the people that are in your industry specifically they all have a different formula for what they do. They all have different knowledge, they all have different experiences and expertise. So, I mean, there are people in like in our mastermind group that they're like, "Hey, this is what I am going through right now and it's a mistake that we made, and I want to share it with the rest of the group so that everybody else in the rest of the group gets to learn without having made the mistake themselves. [00:21:05] Jason Hull: I think also what's unique about our, because it's not just property managers getting together, there's lots of other places that could do that besides DoorGrow. I think what's really unique is that because of how much I've invested and how much we invest as a company and how much we've kind of consolidated and that we continue to do that aggressively and very quickly. I mean, we're in I think 2, 3, high level, high ticket masterminds right now. We spend easily six figures a year as a company on that. Like my business allows me to feed my coaching addiction and to get more stuff. Right? That's true. Right? So the business serves me because I love to learn. Right. And I love teaching and sharing. I think what's really different though, is that when people come into our group, Their mindset very quickly gets upgraded. I mean, we have a training called Mindset Secrets. Like we are changing these people the way they think and the way they operate. And now they aren't able to be part of a group of other people with that upgraded mindset and that upgraded level of thinking. And they're not doing stupid stuff. Like, they're not like, "I'm going to go just try and do internet marketing or content marketing" or whatever they're trying to do to grow, they're like, there's better ways. "So I'm going to do this stuff that DoorGrow taught me." So everybody comes in with a bunch of junk and a bunch of garbage and a bunch of false beliefs and a bunch of ideas of what could work. And that's not really working. And they're frustrated or stuck. They're stagnant in their operations, they're doing too much in their business. They're not really enjoying their team. Like we get all of them to see a better way of doing all this and change it. A lot of people think DoorGrow's all about growth. That's like such an easy thing we solve for clients is adding a bunch of doors. What we really do is we really help business owners become entrepreneurs and run really effective teams and get really great people and build really great systems and operations. That's really what DoorGrow does, but everybody thinks DoorGrow must just help people grow. [00:23:00] Really, we love working with the 200 to 400 door plus companies that are struggling with people, systems, team, operations, because these are all the things the business owner thinks they should be doing, that they should not be doing. This is what their operator or these people should be doing on their team. Right? And so because they come in and we upgrade their mindset very quickly. That group as a group, this Hivemind, this Mastermind, are able to contribute so much more value than I was able to see in any other groups in the industry. Does that sound fair?  [00:23:33] Sarah Hull: Yeah. I think that's-- I'm obviously biased, but-- no, I think that's a good point and I think it gives you really a place to be recognized too. Because we don't get that. Yeah. Like there's no one, you know, when you're in school or when you're a kid and like you do something and you get like the gold star or something, you're like, oh yeah, I got a lollipop because I did my chores today. Like yeah. As adults, we don't get that. There's nobody who's like, "I'm so happy about what you did. Like you did such good job. Yay for you." Like, unless you have these connections, like you just, you miss out on that.  [00:24:12] Jason Hull: So you're kind of touching on the gamification or the gamification where we've gamified our mastermind, right? We've got like our belt levels. Like you're moving through martial arts for property managers where you're going from like zero, a fantasy belt to a white belt of getting your first door to being a black belt at a thousand doors. And we have like achievements that you've mapped out, that we have achievements that we've mapped out as a company for people to achieve certain things to showcase their expertise and our clients wear, like this is new, but they're going to be wearing at DoorGrow Live this week. They're going to be wearing lanyards that are their belt color that they've earned in our system. This is not just because they have doors. You don't get to be a black belt because you have a thousand doors. You have to start as a white belt. Get on the mat and like earn each of these belt levels by achieving certain milestones in DoorGrow to prove that you've upleveled your mindset, you've upleveled parts of your business and that you've got things financially in place and that you have a profitable company. Like there's all these requirements that we've installed and that gamification makes it a lot more fun and allows some of that, you know, recognition to be seen by other people. Right? Yeah. So that's been really helpful.  [00:25:27] Sarah Hull: And I think that's a really good point too, is the door count doesn't always matter. That's what we in the industry, that's where we're like, oh, they have, 5,000 doors. Like, oh my god, that's insane. But I've seen companies with like 8,500 doors that make $54 a door or what? I'm sorry. But I have--  [00:25:47] Jason Hull: and that's revenue. Some of them aren't very profitable. [00:25:51] Sarah Hull: Well, right. So I have zero interest in running a company that has 8,500 doors in which I'm making next to nothing or worse, losing money and I'm not getting paid, or I'm not getting paid well because all of the money is going out to expenses. So what we've done is we've kind of engineered things so that, because I mean, given the choice, if you could have a company with 8,500 doors making bare bones minimum, or if you could have a company with a thousand doors, but you're extremely profitable... so that's what we really focus on with especially the belt system that we put in place. But what's really great about it is when you come to, like one of the live events, you can just pick them out of the crowd super easy by the lanyard. Just look at the color and if you know the DoorGrow Code and the belt system, you'll know very easily like, Hey, this is where I'm at and this is what I want. So let me find the people in the room that are ahead of me. That's who I'm going to talk to.  [00:26:55] Jason Hull: Yeah. Super easy. Yeah, so. Love it. Yeah, so that's helpful. Like everybody needs a hero to chase after. They need those mentors. And so we facilitate that in our program as well. So, yeah, so it's been a game changer for us to have tribes that we are part of that can help us level up. Sometimes they're pointing out things that are so obvious and so stupid that we're missing because we're too close to the fire that it's ridiculous. Like one of them was we do website design for a lot of our clients and we've done that for over a decade. But one of the people that ran a multimillion dollar business that we were in a group with said, "Hey, your website says you do this, and this doesn't sound like what you described." We had changed so much in the previous six months. And it was about six months since we had redone our website. It was all outdated. Our homepage was outdated. And so it was such like a blind spot and it was so obvious and it could affect our revenue so much. It was so stupid. Like I was embarrassed because I'm like, I run a web design agency, and we do this and I've done this forever and I'm missing something so simple and obvious that could make things so much easier. So we changed that and now we're getting a lot more leads and a lot more flow, and it was just like something that we were missing and we just needed somebody outside. And there's so many things like that. We just did a premium mastermind event. We went to Pigeon Forge. [00:28:21] Well, Sarah set this all up technically. Yeah, so it was like in the Rocky Mountains area and like by Pigeon Forge. Smoky Mountains. Smoky Mountains. Smoky. Not in the Rocky Mountain. I don't know where it was. Sarah set it all up.  [00:28:31] Sarah Hull: I know you just showed up. He's like, what am I doing? I'm like, just show up. Right? So, yeah. Yeah. So I kind of set everything up, but what we did is we got a hand selected group of people together and we rented out like a luxury vacation rental. I wanted it to be nice, like very nice. Beautiful view of the Smoky Mountains.  [00:28:56] Jason Hull: It was like this beautiful cabin. [00:28:57] Oh, it was awesome. Up on this hill. Yeah. Like a beautiful view.  [00:29:01] Sarah Hull: It wasn't a hill, it was at the top of the mountain.  [00:29:04] Jason Hull: I don't know. I call that a hill, but it yeah, it was beautiful. We had big mountains behind my house when I lived in SoCal. Yeah. So. But it was, yeah, it was really beautiful. We did some fun things with them.  [00:29:14] Sarah Hull: Yeah. Yeah. It was really great because we got everyone together. Yeah. And the first day, it's like everybody's just kind of hanging out at the property. We're having dinner, we're just kind of talking. We're just figuring it out. The next day we did a deep dive on everyone's business, and I think that was incredible because you get to just contribute to the group with what you can, you get to receive from the group with what you need. And then at the end of the day we went and we just had some fun. So we got out of business mode, which sometimes entrepreneurs are not really great at doing. So we got out of business mode. We went to dinner, we went to a museum, and then we got back to the property and some of us were like, okay. We were up until, I don't know, it was like one in the morning. Yeah. Just chatting. Because we all just couldn't stop. We were all like, okay. Some of them were like, I need to go to bed. I need to go to bed. I think there was probably a good like six of us up until like 1:00 AM. And everyone just got so much out of that and like we got so much out of that too. And it's like that style of event that we've been to and we just knew we needed to implement that in our program because if we come across something and we benefit that much from it. Like I said to Jason, I was like, we have to do this. Yeah. Like, we have to make this happen for our clients. I don't care what it takes.  [00:30:34] Jason Hull: Going back my point in bringing this up is that, a lot of these business owners, these property management business owners were at similar stage in their business. And they were able to share ideas. Everybody kind of opened up what their problems were. We looked at their financials. Like we went deep and they were very vulnerable and everybody could see some really obvious things that, that the business owner couldn't see. Like one of them was still getting a lot of phone calls and wasn't able to function in that BDM role that they wanted to as a business owner, while their spouse was functioning more as operator role and they weren't able to do that because they were getting so many calls and property management related stuff to work on. And it was so simple. It was just changing the phone system. That was it. It was just changing and setting up a phone system and changing, setting up some routing. And that's freed up so much more time since he went to that event. He like made those changes really quickly and now he is got way more bandwidth, right?  [00:31:30] Sarah Hull: So, and since then he's added, he's now over 200 doors. Did you know that? Yeah. What was he at before? I think at the event he was 150 something. Yeah. So he's now over 200 and that event was a little over a month ago.  [00:31:42] Jason Hull: Yeah. Yeah. So I mean, sometimes what's constraining us in growth is something so simple and obvious that somebody else could see, especially somebody that's worked with people at a much higher level. We can see that path. Right. So, anyway, I think-- anything else we should touch on of why property managers need a tribe? I don't think so. You need a tribe. Don't be isolated. Your business will be the sum of the five property management business owners you pay attention to or listen to or connected with the most. And get into a group where people have upleveled their mindset. Have a conversation with our team. You can just check us out doorgrow.com. Go join our free Facebook group where we've got some really cool people in there. They're all very helpful. You can go to DoorGrowClub.com to get access to that. Or just go to our homepage of DoorGrow, click the big pink button, and I have a free training, like 90 minutes going into how we can help you level up your operations, create more freedom and fulfillment for yourself, and that's really what's holding you back probably in adding doors. It's probably that you know how to add doors, but deep down, you know that if you add another a hundred doors, another 200 doors in the next year, which we can easily help you, you know that means your life's going to get worse. We need to change that so your business is scalable and get the right systems in place so that you know your business can handle that and your life gets better the more money and doors you have. And let's make you profitable. Like really profitable. Yeah. So if your profit margin isn't like, at least what? [00:33:14] Sarah Hull: Minimum 20%. But maybe even 30 minimum, maybe even 40%. Oh, yeah. Like, let's get you. Some of our clients have 40, 50, 60% profit margins. [00:33:25] Jason Hull: Which was not the case when they came to us. No. Right. So if you're not experiencing the margins that you would like to in your business, it's a lot of times you just can't see it. But we can rearrange the team, we can lower your costs, we can get your team to be more productive or effective. And they don't need to be micromanaged more. You just need some specific systems, like a good planning system, good hiring system. So anyway, we'll wrap up. I could talk about this stuff forever, but it's nice doing the episode with you, Sarah. So I'm trying to convince her to do more with me. So if you guys like her being on these episodes, comment in the comments. Oh boy. Here we go. I know she's better looking than me and she's way smarter than me in some things. Some things. And so yeah. [00:34:09] Sarah Hull: You're going to butter me up like that, I might do more episodes.  [00:34:12] Jason Hull: There you go. Butter. Yeah. All right. So anyway, that's it for today. So until next time to our mutual growth. Bye everyone. [00:34:21] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:34:47] 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.

Many property management entrepreneurs struggle to document their processes, and this leads to an overall lack of efficiency in their businesses. Documenting processes helps business owners streamline the day-to-day and reduce interruptions from team members. Join Jason as he chats with Greg Brooks from Rocket Station regarding process mapping and how it can be used to benefit your property management company. You'll Learn... [04:10] What Process Mapping is and Why You Need it [10:35] How to Document Your Processes [16:15] Why You Need to Focus on YOU not the Business [22:40] What Rocket Station Does Tweetables “Every entrepreneur can double their capacity by getting a really good assistant.” “It's very common that we focus so much on the business and we don't focus on what we need.” “As the business grows, the biggest constraints in the business are where there should be the most attention.” “The process is always needed where we feel the biggest bottleneck or where we're feeling the most struggle.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason Hull: for most business owners, getting a VA is probably the very first hire they should make. Every entrepreneur can double their capacity by getting a really good assistant.  [00:00:11] Welcome Doorgrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it.  [00:00:37] Jason Hull: You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now let's get into the show. [00:01:10] And I'm hanging out today here with Greg Brooks of Rocket Station. So Greg, welcome to the show.  [00:01:18] Greg Brooks: Yeah, Jason, thanks so much for having us on. Excited to kind of dive in today. [00:01:21] Jason Hull: Cool. So to get started, why don't you give us a little bit of background of how you sort of got into entrepreneurism and developed Rocket Station, and then we can transition right into what Rocket Station is.  [00:01:34] Greg Brooks: Yeah no, definitely. I was like your classic statistic coming out of college, I was a division one athlete and I got done playing and worked in the fundraising world for a little bit, got my masters and very quickly kind of had that entrepreneurial itch. You know, growing up I had you know, goalkeeper academies that I would run, I reffed on the side, kind of had a bunch of little businesses that would help give me some money in my pocket for college. And kind of once I got done with my masters, you know, began on kind of my entrepreneurial journey. I was seven jobs or businesses owned in eight years trying to figure it out. Everything from supplement company all the way through to a restaurant. So really-- Wow. Was trying to kind of find, I feel like being that athlete, right? You have that kind of grind mentality and was trying to see how the heck I was got to get that to translate to making some money and not being a broke college kid anymore.  [00:02:22] And then about four years ago now met up with my partners at Rocket Station. I'd say kind of similar to you. Had, you know, had a couple investment properties myself, but was by no means a full blown property manager or a virtual staffing company with almost 2200 employees in the Philippines. I had never even met someone from the Philippines. Probably didn't even know where it was on a map. Yeah. But was fortunate enough .A couple of my partners were both operators as well as you know, kind of the visionary for where we wanted to go within the space and say they were looking for someone with, you know, kind of a pedigree in sales and marketing and I guess I fit the bill. So it's been a wild ride, kind of, you know, learning this industry. I mean, we work with. You know, operators from all sizes, 50 doors to 45,000. So seeing kind of the different struggles or bottlenecks and growth opportunity, especially over the last three years that this industry has kind of been dealing with, has been exciting and say excited to kind of sit here now positioned as kind of one of the top virtual staffing companies to the property management space and helping our clients solve a lot of kind of day-to-day operational issues when it comes to process as well as people. [00:03:29] Jason Hull: Very cool. So where on a map can people find the Philippines?  [00:03:34] Greg Brooks: Yeah, you want to go say, a lot of people go across the Pacific. You can find Japan and then go a little bit further south. That's where you're looking right there, in that southeast Asian corridor. It's about-- now they can all find it. Yeah. 7,000 islands all spread out. If you push them together, it's about half the size of Florida. But I'm actually, I'm not sure when this episode will release, but we're actually headed there next week for our Q1 wrap up, which I'm excited about. Cool. Spend seven days over there.  [00:03:57] Jason Hull: Yeah. Very cool. So, our topic today is process mapping your property management business. And so let's talk a little bit about process mapping and then maybe we can get into how Rocket Station could help with that. So what is process mapping?  [00:04:13] Greg Brooks: Yeah. For us-- and candidly this came from kind of our own business lessons as young entrepreneurs, especially in property management. So often, we've got great teams. We've got people that have been with us for a while that are running our day-to-day operations. But what they're doing right our leasing processes, our maintenance processes, onboarding a new owner, offboarding an owner, a lot of that we rely on people to, you know, "get the job done right." and we have our weekly meetings and our huddles. But in terms of like a conceptualized process flow or kind of orders of responsibility or actual training documentation that could allow us if we took on a hundred new doors next month to hire 3, 4, 5 more property managers. We found that a lot of operators, regardless of size, really lack that in depth, detailed documentation around how their departments, how their businesses, how each of their individual team members operates. So for us, like we feel like that being a virtual staffing company, that's the key, right? Whether you're just trying to maintain and have a better work life balance as the owner, or if you're trying to scale from 500 to a thousand doors. A lot of people try to acquire and then just hire. And we feel like unless you have those processes and systems really mapped out, documented technology plugged in the right place, you're creating a lot of headache and a lot of extra work and just a lot of unenjoyment of the company that you're trying to scale. So we feel like process mapping is really the key and kind of the foundation to any property manager's business in order to get where they want to be. [00:05:41] Jason Hull: So big challenge that I see in the industry is that a lot of these visionary entrepreneurs, they know that they need process. They know they need a process system, but they hate it, like they hate doing it. It's not fun for them. Now, some of them enjoy the act of creating a system or creating a process, but then they hate to make sure it's being used and they hate to run it. And that's where those operators kind of come in. Like it's kind of the yin of the yang. Most visionary entrepreneurs, they really need an operator. I would say that's probably the most important hire they'll ever have in their business, and a lot of them are lacking it, so, now once they have an operator, this would be like something they could easily give to them. They'll be like, "Hey, do this stuff. Like get these processes documented. Let me show you how to do it." And maybe they'll record that and they'll say, now you make a process for this. Because they don't want to do it. And those of you listening know, you know, you're that person because you've had it on your to-do list for at least a month, maybe even many months, maybe even years, to get certain things documented or defined processes, and it's still not done yet, which is a clue you're not the person that should be doing it yet. You're not the person. So Greg does Rocket Station provide people like that, operators, or are they the more going to be the people that can help to get these processes in place? Just curious.  [00:07:08] Greg Brooks: Yeah. Yep. Yeah, so we do a combination of both. And you're exactly right. Like most. I mean, you think of a typical property company owner, right? They're the visionary. They've got big goals, aspirations, like sitting at a desk, creating flow charts and documenting SOPs and creating what are the FAQs that most people ask when they make a leasing inquiry? Like they don't want to do that and shouldn't have to, and candidly, like who has the time, right? A lot of us, were operating businesses. If we're at the point where we know we need processes, it's either because, we've got messes we're trying to clean up in the office, which is taking our real time. Or we're acquiring and growing, which is also taking our real time. So it's like how do you balance that?  [00:07:46] So at Rocket Station, that's really our niche within the virtual staffing space, right? There's lots of providers out there that can staff you with people. We feel like without process and without a resource for the owner to be able to build those processes or to, you know, take a property manager or take your leasing team and have them work with somebody who can conceptualize and document those processes. You're really not doing your business justice. You're not doing your future virtual assistant justice in terms of getting them set up for success. So we do a combination of both. You asked, do we just hand over processes or do we kind of build them from scratch? We do both. So we're very fortunate. Like I said we work with over 550 clients just in the single family property management space itself. We also do commercial, we do short term, but we have developed with our clients. Depending on your scale, you know, the problems at a hundred doors are a little bit different than the problems and processes you need at a thousand doors, but kind of industry best practices based on, you know, the positions and the departments and the structure that companies utilize. We also have great partnerships within the industry with a lot of the softwares that you see out there. Even some names I've seen that have been on the podcast here, whether it's like maintenance coordination software, or leasing software or you know, the Appfolios the Propertywares the Buildiums of the world, where everyone's technology needs to be built into their processes, but not a lot of operators know the ins and outs of all the buttons to click and how to do this, and how to send off this, you know, th this report. So we also work directly with a lot of the software companies, templating out all the functionality that their software enables their clients to utilize, which then we pass along to the client to bake it in. [00:09:22] So we try to template out as much as possible. I mean, it's no secret top operators, I mean, even mid-level operators, 80% of what they're doing, 85% of what they're doing every single day is pretty uniform across the industry. Where we get really dangerous and become a real big asset for our clients in dangerous, in a good way, is part of our onboarding you first spend two weeks minimum with our process development team and our team of process engineers taking our best practices and our guidebooks on software or specific positions and we tweak it and customize it to how your business operates and the structure, the points of contact, the department leaders that you utilize. So it's kind of best of both worlds, keeping it very efficient at the end of the day. Like we said, most operators are not doing process mapping is because they probably don't have time and we totally respect that. But we are really able to create a very robust, very deep, very thorough process through a combination of the customization as well as the templating and best practices that we leverage across our 500 plus customers. [00:10:28] Jason Hull: Cool. So let's talk For those that are listening, they're like, yeah, you know, I know I need to map out some processes. I want to start working on the process mapping myself. What would you recommend as the process to map out a process?  [00:10:42] Greg Brooks: Definitely, I think the process is always needed where we feel the biggest bottleneck or where we're feeling the most struggle, and I kind of joke, the metaphor that we use is within your office, anytime you or your team have, oh, shoot moments. "Oh, shoot, I forgot to do this. Oh shoot, I don't want to do this. Oh shoot, I ran out of time to get to this." That's usually where you need to start developing process immediately. You know, that's typically kind of your foundational billing structure, right? Whether it's you know, whether it's like your leasing process or whether it's how you handle a maintenance call, how you troubleshoot an issue on, on, on site, at a property. I'm trying to think what else. Like your past due, you're invoicing, right? All of those kind of, you know, things that are very repetitive, that are very low level, but have to be done every day. We typically see that's the most impactful place that you can start implementing and documenting your processes. Like I said, we kind of coined the term, the oh shoot moments, you know, the, that's really where the operator, kind of like what you said, same thing for the business owner. Each of your teams, each of your property managers, your leasing agents, there's things that they're either forgetting to do or not doing. It's because it's probably a low priority item that you should be reinforcing process rather than just relying on them to get it done. [00:11:47] And there's many different ways. I know you guys have a great software. I mean, there's tons of different mind mapping softwares out there, but you know, even just a whiteboarding exercise. You know, kind of just doing the, "okay guys, like where are we? Let's go through the simple 12 steps to go from advertising a property to getting a lease signed." Just simplify, and then start to back into the nuance. I think a lot of operators, they think their business, it's very unique. "We do this a certain way, we do that a certain way," and they start thinking too much about the granular and not enough about just the basic step one, step two, step three of the life cycle of a tenant or an owner. So being able to really start there, kind of the good old KISS method, right? 'Keep it simple, silly,' like start very basic and then you can start to build out first. But even just that very basic you know, 10,000 foot overview of how each department operates or how each department interacts with one another is typically where we want to start from a process mapping standpoint.  [00:12:41] Jason Hull: Cool. Yeah. Very cool. Yeah. I like the idea of looking at the bottlenecks because as the business grows, the biggest constraints in the business are where there should be the most attention. There's a good book by Eliyahu Goldratt. It's called The Goal and it perpetuates the theory of constraints, and it illustrates it nicely. It's kind of a dry read, but, so I recommend you listen to the audiobook because they have actors to play each part. Unless you like dry reading, so. But the ideas in this book, the guy is looking at everything through the lens of trying to fix this factory that he's in charge of, and he's looking at all these different stages in the factory, and they were making things less efficient by improving each step. Because if each step is maximum efficiency, that means they were just building up inventory and it was causing even more constraint and more delay. And so everything has to work as a cohesive whole. And so I like the idea of looking at the larger big picture because you can like optimize one part of your process super strongly and shove a lot of stuff through, and then it can all pile up somewhere else. And that's not the most efficient business model. [00:13:50] It would actually be more efficient to slow things down on that previous step to the level that the next step can handle it fully instead of it building up sort of some sort of constraint or inventory or whatever that you have to like manage and inventory and property management would just be like things backing up, right? So in that situation. So what else can we share with people about process mapping? And then let's get into maybe... I really liked what you had said about how you kind of onboard your clients and bringing them into with your dev team to map out processes. So maybe we can go in a little more detail about that. [00:14:28] Greg Brooks: Yeah, definitely. And then kind of just off of what you just said there, I think the biggest thing is at the end of the day, a lot, I'm sure a lot of people listening to this business they're operators, right? They are stuck. The good old stuck in the business versus working on the business. Yeah. I mean, I would say don't try to do it all yourself, right? Whether it's consultants and consulting services, like what DoorGrow has, or bringing in, hiring kind of your yin to your yang, right? Someone who has an operational mindset, and I think that's a huge part of it as well. Even with how we do it. Typically how an engagement works with one of our clients is like we allow the visionary type business owner to very efficiently get the processes or coordinate their team to get the structure out of them so that you can have that breath of fresh air to like really conceptualize and view your business and even just pinpoint like where those bottlenecks are. So often, I think especially if you're growing your property management company, onboarding new owners, onboarding new doors, it's like you're just waking up and you're a firefighter every day. So just having a resource, whether it's an internal hire, a consultant, a service like ours, to just like get how the system operates now. [00:15:29] Forget even trying to make it more efficient. Forget refining, forget figuring out how many more people we need. Just having a resource where their skillset is being able to conceptualize and document and get that out is hugely valuable. Where what we find is with our clients, like very quickly, you know, their key investors their property managers themselves as the owner, they're very quickly able to say, "Well, why are we doing it like that? What does this look like?" Or our team can say, "well, did you know you can automate this whole business function with the technology that you're already paying a pretty penny for?" So just like getting it out, right? Don't feel like you got to kind of make it more efficient and document the same time. It's like, let's just figure out what we got here. That's just hugely valuable and should be like kind of the first stepping stone for anybody as they go down the, you know, building systems and processes pathway.  [00:16:13] Jason Hull: Yeah. I think one of the interesting things that I see a lot in having, you know, been kind of on the inside of probably thousands of property management businesses that's really interesting, is that it's very common, I think just in general for entrepreneurs is that we focus so much on the business and we don't focus on what we need as an entrepreneur in order to move towards what I've talked about on previous episodes, which I call the four reasons, like more fulfillment in our day-to-day, more freedom, more contribution, more support in our business. Those are the four reasons we start a business, and we all want that fifth reason of safety and certainty like our clients want, and in order to create those five things, a lot of times business owners make the mistake of just continually serving the business. What does the business need? Oh, the business needs an operator. The business needs to hire, the business needs this. Meanwhile, their needs continually get neglected. It's super common that you get to the point where you have two to 400 doors, I call it the second sand trap, and you're miserable. More miserable than you've ever been in your business or maybe in your life, and you now have an entire team around you that are doing stuff in the business, but they're asking you tons of questions.  [00:17:28] You are now the biggest bottleneck in the business. You're frustrated and banging your head against the wall thinking, "why can't they just think for themselves?" And it's because you've built a team around the wrong person. You didn't build the business in a way that you get to do the things you most enjoy. And so the way we combat that, I like the lens of looking at what does the business need? What systems do you have? How can you do this? I want to challenge everybody listening also to pay attention to what you need because this business exists to give you fulfillment, to give you freedom to take care of you, and you've spent so much of this trying to take care of the business and take care of your team. So what we do with clients is we have them do a time study. And we have them categorize based on the energetically, which things give them energy, like gives them fulfillment, freedom. Those are plus signs and which things are minus signs that are taking those things away. And then we take a look at those. And then we also categorize them based on you know, whether it's strategic time, like you're focusing on the business, or whether it's tactical, where you're in the business, you're making phone calls, you're doing sales, you're like doing the work, you're sending emails. And for most visionary entrepreneurs, the tactical stuff are the minus signs. [00:18:39] And then the other hidden thing that we track in time studies are interruptions, because this is the biggest hidden thief in a business, is all the interruptions, your team interrupting you, tenants, owners interrupting you. All the interruptions are a thief, and one interruption according to Gary Keller's book, The One Thing, according to research cited in there, costs 18 minutes of productivity. And normally team members are interrupting each other at least once every 18 minutes, so you're losing over a half hour of labor every time. One team member interrupts another team member. And so that's why some businesses, I've seen some with entire teams and it feels like they're just spinning their wheels. They're not really making, innovating, moving progress forward and they're just barely getting all the to-dos done. And so I would challenge people, especially if they come on board with DoorGrow, we would have them do a time study to get clarity on what they need most to get to that next level. [00:19:33] because there's a lot of people in the 200 to 400 door stage that they don't even really want to add doors. That's the secret. Usually at that stage, they deep down unconsciously, don't really want to add doors. They say they do, but when I talk with them, adding more doors, I can tell, means more pain in their mind. So they're psychologically against themselves. They're reversed. And in order to do that, they need to quit focusing on the business and they need to start focusing on themselves and what they need, and their team will be better off if they have those four reasons, their team members can start to have it because their team members will be doing the right things and they'll have the vision to be able to see that their team members are out of alignment or not on those four things for themselves. And I find we get our clients three times the productivity out of their existing team members if they are in alignment with the four reasons. Three times. So yeah, that's cost savings.  [00:20:29] Greg Brooks: A hundred percent. And it's just that leveling up, right? It's for the business owner then being able to level up into what they want to do, run the business that they want. That cascades down to your management. Obviously we come at it kind of from the bottom up, right? We talk through with a lot of our clients once we go through the process mapping piece is like a virtual assistant hired the right way, onboarded the right way can be so valuable. And it's, you know, for some clients it's a cost cutting measure like, at eight bucks, 10 bucks, 12 bucks an hour, it's typically got to save you a ton of overhead compared to hiring somebody locally. But we go to them and say, "Hey, look, now we have these processes. You've been able to diagnose what your negatives are, right? What's sucking the energy out of you. Well, look, we just took you out of doing c and d level work. You're now doing the a and b in the space that you thrive, which is only got to help the business get where you want it to go. And we have a super affordable resource that has the skillset and character suits to be able to do that work better than you would anyway." So it's that win-win- win all around the board. Yeah. And then it cascade down. Especially for that, we have a lot of clients in that kind of 200 to 500 range. Yes. It's just, you just kind of keep, you keep throwing them muck, right? You're in the minutiae of it, just trying to get through to the next day and the thought of going to 700 doors is just like, "no way I'm got to have a heart attack." But when you can start developing those processes, you know, mirror that up against your team's strengths, who you have, where do you want this property manager or this leasing, you know, agent to be really, and what do you want them doing?  [00:21:54] We like to simplify it down to, I mean, no one should have more than three to five core responsibilities, right? Really. And then property management. That's very hard. But if we can get people doing the three to five things that are in their sweet spot. What needs to fall off of their plate and then how can we offset that with process and incredible VAs to get them so that the whole business can take a level up and I mean, once again, coming back to just the personal thing, people can enjoy going to work again. There's a lot of times, whereas the owner where like, "I just don't want to go in." I'm sick of getting my teeth kicked in. So it's like your team feels that too. Well, how can we be enjoying this more. How can we increase the culture, make it a better experience? Your owners feel that, your tenants feel that, and it all kind of starts at this initial discovery and jumping in with the process piece. [00:22:37] Jason Hull: Yeah, totally. So cool. Well, tell us a little bit more about Rocket Station. I mean, there's a lot of VA companies targeting the property management space. We've had some on the show. We've had like Anaquim, virtually Incredible, Hire Smart, and several others. What do you feel like makes Rocket Station stand out? How are you kind of unique in the space? And why should somebody reach out to you instead of somebody else?  [00:23:02] Greg Brooks: Yeah. No, definitely. So, I mean, big thing kind of comes back to what we just talked about. We feel like there are, there's a lot of, especially, and we've seen them in the last five years, there's a new VA company every single week, that specializes, "in real estate." I think at the end of the day, a part of the puzzle of hiring VAs is finding great VAs. So just from sheer like, kind of recruitment size, all of our team members are based in the Philippines. So like, like I mentioned earlier, we've got 2200 people, 250 internal employees that work in the Philippines, recruiting, training, and onboarding what we feel like is some of the best talent the country has to offer. And all we do is real estate. So we break our business into kind of four key pillars. So it's property management, investor, real estate agent and brokerage, and then we have a home service division as well. So a big part of what we do is providing, we want it to be a win, right? We want a rockstar virtual assistant that has spent five and a half weeks going through our training and evaluation to get placed with the perfect client so they can grow their career and grow professionally and make more money and all the things any employee wants. [00:24:03] We also want a client who has an ease of experience where at the end of it, they get a high output individual with as minimal headaches as possible. Unfortunately we feel like in the VA space, a lot of VA companies out there are more placement agencies. Meaning they'll find you somebody, but then you're kind of on your own to get them trained and hold them accountable. I mean, every VA company out there touts "you'll get management support and all," but once you get into it, that management support really is just, "Hey, if the VA messes up, give us a call. We'll get you a new one," and that's just not like the end goal. We're big on this idea of an being an integrated staffing service, and what that means is our perfect experience is we only staff dedicated virtual assistance to our clients, either part-time or full-time. [00:24:45] So the perfect experience for us is, yes, Rocket Station held your hand and helped you develop processes and job scopes. We do all the recruitment and placement of somebody who we've evaluated over the course of five weeks to be the right fit. But at the end of the day, we want them to look, act, and feel like a member of your team. So we feel like that transactional nature that a lot of VA companies unfortunately go with, just because they're trying to get butts in seats. It doesn't help anyone. It doesn't help the property manager. It certainly doesn't help the va. In terms of finding people that really grow and stick well, one of the numbers we're really proud of is our average client retention is 33 months. [00:25:20] So on average, the VA that you hire with us is lasting with you almost three years. Which I mean, in the VA space is about four times industry average, but even for the types of positions that we're filling, maintenance coordinators, leasing administrators, like you're not hiring somebody locally that's got to last more than nine to 15 months. So we're really proud of that and we feel like it creates that experience where we help. I mean, our point of differentiation is we're not just helping a VA get a job, we're helping our property management clients set up their systems and process so they can be successful with hiring virtual assistants. Because I think anyone out there that either currently has VAs or has maybe tried hiring VAs you very quickly realize that the number one, the term VA kind of very much undersells the capacity of what these team members abroad can do. Virtual assistant, you think my calendar or make a follow up call for me. And it's not that right? We're hiring, you know, world class customer service, leasing agents, salespeople, right? People who can really come in and we've got lots of cool studies to show this, but can typically outperform a local hire about three to one compared to what, you know, what you would get outsourcing versus hiring. But we really try to handhold and help our clients create the infrastructure-- a lot of it through process mapping-- to ensure the success of that hire. Sometimes people don't match. Sometimes VAs, you know, they do get replaced in six months, nine months. But the fact that we take that deep investment from literally documenting the processes for our clients, really getting to know them and managing that relationship as if we are a part of their team, really allows it to be a win across the board rather than just the transactional nature that unfortunately so many VA companies kind of run with in, in the property management space specifically. [00:27:03] Jason Hull: So, I mean, that's incredibly low churn. If you're able to, on average do 33 months. So what would you say really-- I mean, because that's unique-- what really is causing that?  [00:27:16] Greg Brooks: I think it's a, I mean, hate throwing around the word culture because everyone throws around culture, right? I got a great culture. We have a different culture, we have a unique culture, but for us, it really is the culture piece in terms of how we structure the experience for the virtual assistant in the Philippines, mixed with how we structure the experience for the client to where we kind of view our business kind of in like two different verticals that combine when the client hires. So through our recruitment process, through the training, through all the support that we give even down to like how we compensate the benefits that they receive. It all lends to being a more structured employment option for the virtual assistant themselves. And we see that in terms of, we're very fortunate. We spend minimal dollars advertising for recruits in the Philippines. And last month we had 5,500 people apply for a job at Rocket Station. And a lot of that we feel like speaks to the culture because we have an incredible internal network over there that champions the culture that we're trying to provide, where we're not just that transactional VA company that's got to get you a client and then you got to kind of figure it out, right? We're helping support their education right from the jump in terms of the industry and the types of clients they're got to land with. Once they do get selected and hired by a client, we have all this process mapping and training and documentation custom-built. That's setting them for up for success. And then we actively are managing it, looking for opportunities to grow the VA's experience and their knowledge once they're working with the client and performing in their role. So just creating those feedback loops that create really strong culture with our teams over there. And then also marrying that with. The preparation that we do with the clients here. [00:28:58] And I know VAs have become a lot more common, especially during Covid, but I mean there's still a lot of operators all sizes of business where it's still-- for a bad metaphor here-- it's still very foreign to them, right? They're like, how the heck am I got to communicate with this person every day? How are they got to be on our meetings? How are they got to be able to be plugged into our technology? So being able to walk them through step by step with that, doing it a lot of that for them, but making sure the infrastructure is set up allows them to look at this VA that they're hiring more as a member of their team rather than just the person who is vetting all of their lease applications because their leasing agent is sick of doing it or not doing it. You know what I mean? It's that different in terms of like, Hey, we have the end goal of them being integrated, being a part of their team. I mean, we have incredible stories of, ever since the world has kind of opened back up, clients literally traveling to the Philippines to visit. Actually within the PMI franchise network, one of our kind of trophy clients they flew. Four of their VAs over for the Property Management Incorporated national Convention last year. So it's just great. It's that different experience where it's like, hey, people are people. As business owners, we need to set people up for success because personally, I've never hired somebody who wants to quit three months later. When the employer meets the employee, there typically is a value trade there where somebody wants to succeed and for anyone that's worked with VAs in the Philippines, when you talk about like work ethic and really just want to it's world class, like they want to come in and be a valuable member of the team. [00:30:26] So the way that we're able to prep the client, the culture that we're able to cultivate within the VA space itself is what really lends itself to that really strong marriage and that super low churn that the client actually feels in their business, whether that's being able to add 200 more doors, whether that's becoming, you know, more profitable or cutting down their overhead, like whatever their end goal is with hiring VAs, they're able to realize that faster and they're able to get just a huge resource, a huge talent in terms of this dedicated virtual assistant.  [00:30:56] Jason Hull: Yeah, for most business owners, getting a VA is probably the very first hire they should make. They're probably not ready yet at a smaller level of maybe like 50 to a hundred doors, you know, they're not ready probably to afford to hire a good operator or somebody come in and do all operations. But getting a really good assistant. Every entrepreneur can double their capacity by getting a really good assistant. I never want to be without my own assistant. I have an amazing assistant. She's in Mexico and we've got at least two team members in the Philippines. We've got multiple team members in Canada. Like the cool thing about being able to do things virtually is that you can get the best, you can get the best wherever they're at. And  [00:31:44] Greg Brooks: at a price you can afford, typically. [00:31:45] Jason Hull: Yeah, at a price you can afford. Now I definitely have a lot of US based team members. And I do believe, like, you know, there's a lot of times there's a difference. There's a lot of times there's been a difference, but for everybody on my team, they're the best I could find in any category. And it didn't matter where they were. So, It just is icing on the cake that, you know, having a logo designer, for example, in the Philippines would charge probably 10 times less than a logo designer in New York City. So there's definitely advantages and those get passed on to your clients in a lot of instances as well. And so it allows the property manager to remain competitive in their pricing and to keep their operations and to have more profit margin. So it really does create a win-win- win all the way around so everybody benefits. Well, cool. I think that's a pretty good place to wrap unless there's anything else you want to say about Rocket Station. You can tell us how we can get in touch with Rocket Station or those listening, how they can. Get a hold of you.  [00:32:43] Greg Brooks: Yeah, definitely. So anybody who wants to nerd out on process mapping or learn more about VAs, say, we'd love to hop on a quick call and talk to you. Our team's got some great resources. We've got some great kind of done for you SOPs where if this idea of process mapping is something you want to get into, but maybe using a service like ours you're not quite ready for. We've got some great how tos. So head over to rocketstation.com. Obviously check out our website. We've got some great lead magnets and resources there for anybody who wants them. Anyone interested in a call, go to discovery.rocketstation.com. For all the DoorGrow listeners, we do have a $500 off promo that we're running. So just make sure in the referral box put "DoorGrow." But like I said, the call itself is completely free. So even if you're trying to learn more about VAs, learn more about processes, our team of specialists, we'd love to kind of walk you through, you know, learn a little bit about your business, see if we can help, and if not, be able to fill you up with a ton of resources and knowledge and a bunch of takeaways to, to hopefully help you run a more efficient business where you leverage virtual assistance in some capacity. [00:33:42] Jason Hull: Awesome. Thanks Greg for being on the DoorGrowShow.  [00:33:45] Greg Brooks: Thanks for having us.  [00:33:46] Jason Hull: Cool. So if you are a property management entrepreneur, you want to add doors, you want to grow your business, you're wanting to scale, check us out at DoorGrow.com. We've got an amazing mastermind. And if you're wanting to get to the next level in your business, You're not got to do that by doing it alone. It's time to start getting connected, reaching out, and not being that entrepreneur on an island. There's lots of people playing a similar game as you and you should be connected. So reach out to us at DoorGrow. We would love to help you grow your business. You can check us out at DoorGrow.com. [00:34:18] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:34:45] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Do you feel confident about your current maintenance processes? Maintenance is an area where plenty of property managers struggle with client satisfaction. In this interview, Jason speaks with Ray Hespen, CEO and co-founder of Property Meld about how tracking key metrics can be an incredible way to identify areas of improvement within your maintenance process. In turn, this can improve resident satisfaction, increase owner retention, and lower maintenance costs. You'll Learn... [03:40] How Metrics Can Help You Improve Client Experience [09:35] Maintenance Analytics you Need to Pay Attention to [14:50] The Maintenance Hierarchy of Needs [21:47] A New Tool for Tracking Maintenance Stats Tweetables “Oftentimes it's really hard to see what you need to fix next until you progress to that next stage and stuff breaks.” “In most areas of business, there's a lot of myths and ideas around what creates a good experience or what actually creates retention.” “Just because they don't love you doesn't mean they're going to go shout from the rooftops nobody should work with you.” “Anything that can be done too little can also be done in excess. It can be done too much.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Ray Hespen: We've got a really amazing product that's dropping in the middle this year. I think it'll be industry shifting, but it's actually providing the visibility to where you're at on the ladder and what you should be working on. Not just you, not just company X and be like, "how do I think I'm doing in my own little paradigm," but like, where am I at against my competitors? [00:00:19] Jason Hull: Welcome Doorgrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. [00:01:03] We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder, and CEO of DoorGrow. Now let's get into the show.  [00:01:21] So my guest today is Ray Hespen, CEO of Property Meld. Ray, welcome back.  [00:01:29] Ray Hespen: Hey, thanks so much Jason. Super excited to come back. This is always a lot of fun, so appreciate the invite.  [00:01:34] Jason Hull: So just before we were in green room and Ray was flirting with me and telling me how good I looked since we last met.  [00:01:41] Ray Hespen: Just a little bit. Don't tell everybody my secrets-- how do I butter up  [00:01:47] Jason Hull: He's trying to feed my ego before the show. [00:01:49] Ray Hespen: Well, I think the thing is I've been in the industry for about seven years now, and so that means you start to, like, you start to realize, you know, it's like I'm growing up here and you get to see your peers that grow up in there. And so, you know, sometimes when you don't see them for a while you'll be like, dang, you haven't aged as much as I have so good on you, you know? So.  [00:02:07] Jason Hull: And I was saying, I was like, yeah, my my beard has gotten a lot whiter since you were less on the show. I'm getting it. So today's topic is going to be the importance of maintenance analytics in your property management business. And we're not going to run super long because, I told Ray, unfortunately, I have to pick up my daughter from school and that was just a timing thing, so we'll make this potent, but I have to say, Ray, I was sitting on a call with a client Jimmy K. I call him, and he was just saying how Property Meld has like, seriously improved his business. This is what he said, and we probably can share the video with you. I'm sure he'd be cool with that, but he was like, "yeah, I had two maintenance guys. We fired one of them and Property Meld and then we realized we didn't need a second person anymore." [00:02:53] Ray Hespen: Oh my goodness. So that's basically the gist of it so. That's super cool. And I think the big thing about that, Jason, you and I are both in the business of trying to help other people deliver a better service. And sometimes, you know, what that translates to a lot of people is like, you made that job that much easier for somebody. It's like that hits, you know? Yeah. So thank you for sharing that. Yeah. That's awesome.  [00:03:15] Jason Hull: We hear it. I told you in the green room, we hear it all the time from clients, like they love Property Meld. Like we're like, go try Property Meld. They do it, and then they become these like religious advocates, like missionaries because every one of our coaching calls, somebody brings up maintenance. They're like, Property Meld! It's life!"  [00:03:33] Ray Hespen: Man. Gosh dang. See, like I told you, you looked really good and you aren't aging like you just returning the favor. That's really nice. Yeah. Thank you.  [00:03:43] Jason Hull: So yeah, so let's talk about maintenance analytics. So one of the things I see is a lot of people, especially the 200 to 400 door plus crowd, They start to like freak out because they don't have a lot of profitability a lot of times. They were more profitable, they had more, let's say this, they had a higher percentage of profit margin when they were a solopreneur. Now they've got this team, they've got all these software, they've got all this stuff, and they're trying to figure out how do I become more profit focused? And then instead of solving all of the most significant things that would impact profit, they go and sign up for some sort of profit coaching system, and then they try and squeeze their team with more KPIs and more metrics and force more blood from the stone. When what I see a lot of times is they don't have a good team. They don't have good processes. They don't have good systems. They don't have good documentation. They have no planning system. So their team have no idea how to help and function and think like more like the business owner and like get things done and innovate and create. And so these are all the things that we'll help them install. And early in that stage, before any of that happens, maintenance is usually the thing we need to push them towards because this is like baby steps. Like you need to get maintenance dialed in and you need to get leasing dialed in. Now we can focus on the team because those are things they need to get down in maybe even before they start to build a team, when they're doing it themselves, around 50 to 200 doors, depending on how crazy they get. [00:05:14] Ray Hespen: Yeah. Well, and I think one of the challenging things is oftentimes you know, both of us are business owners and so oftentimes it's really hard to see what you need to fix next until you progress to that next stage and stuff breaks and you go, "oh!" Obviously being able to know some of those challenges ahead is a superpower. But I even think the scaling element depending on your market type of class of property you're doing for you as an entrepreneur, you know, a property manager might be like scaling up and you know, maybe because they're the most amazing salesperson in the world, they're crushing it. Their problem might be sales in the future cause they can't do it right, or that might be solved. They might have somebody else there and they don't have a rockstar coordinator that's doing it. So it's super hard in that. But I completely agree. I think making sure that you've got measurables to at least understand the health. What's red, yellow, and green? Not sitting there forcing and saying "it's red, make it green," but just knowing that it's red. And then what do you as a business owner are going to do people process training to like address [00:06:14] Jason Hull: it. [00:06:14] Yeah. I love that. I call it the stoplight strategy. We just keep it super simple. We'll ask our clients on coaching calls, we'll just say, "who's, you know, red if you're in crisis or having problems. Yellow, if you're a little fuzzy and confused on what your next steps are. And green, if you're in momentum." And people know right away they're like, "oh, I'm this color." And then we're like, "why? Like, tell us why, and then we can't help you out." So, yeah, I like that. All right. So Ray, what sort of maintenance analytics should they be paying attention to, and how are people trying to do this if they're trying to do it without Property Meld? [00:06:46] Ray Hespen: Yeah, so, and I think I'll kind of just kind of talk about the high level just about it. And you talked about Miserables and KPIs. I think a lot of the times, like, you know, especially you talk about growth a lot of the times, understanding how many leads you're going to get, the quality of leads, your conversion rate, the onboarding success rate, like a lot of those times, those are metrics that you sit there and go, how healthy is my process? Whereas a lot of the times I think maintenance, the big challenge about maintenance is like that metric of how we measure ourselves is oftentimes like, how many angry phone calls do I get? How many negative reviews did I get? And those are really hard to manage cause they're so lagging. Yeah. And so one of the things that we're really trying to get the industry really bought in, and we've spent a lot of time trying to understand these, is like get more crystal about what are good lagging. Getting yelled ats, not a good lagging indicator. A business owner may be shielded from getting yelled at, and so how are they supposed to know how maintenance is going? Resident SAT is a big one and that's probably the easiest one. There's some profitability stuff too, depending on, you know, making money on vendors or whatever.  [00:07:51] But resident SAT's a great one. It's just a great one that everybody needs, because if you hang onto a renter, they renew the lease, the investor's happy, they stay with you longer, you keep making money. So it's a good one. But I think one of the things that can be difficult is like, how do I impact that? How do I make resident SAT better? So now if I'm measuring it, and let's say it's a 4.1 and I wanna move it to 4.4, and you say, team, I need you to move it to 4.4, they'd be like, great, are we nicer to them? What do we do? Do we send gift baskets? And so I think that's been the big black box of maintenance is how do you impact certain metrics? So I always give the analogy, you know, like, say one of us is sitting there going, you know, I'm really trying to tighten up my budget. You know, I'm getting my credit card debts too high, like, as a human being, right? Take this out of business. I'm relating it to another example. And we sit there and be like, I need to get my credit card debt down, my spending's out of control against my income. Like we have a lagging indicator, which is our bank account. That tells us that now if I were to sit there and do that, the tools that I'm available to as a consumer to understand what are the things that are breaking and what are the things that I'm spending all my money in and what things do I have to move to ultimately move my outcome, my racking up a credit card debt is actually really easy. You run your bank, you go to Mint. There's like tons of tools that will tell us, here's where you're spending all your money. And you can say, all right, I'm going to go fix that. So now if you take and get that to maintenance, I think that's the big challenge is doing that. So we've started to really put together some of those metrics. [00:09:27] And so one thing that we're super heavy geared up in is leading indicators. And then as business owners, what behaviors are you expecting out of your team to drive those? So I'll give some leading indicators, just some really quick and easy ones that I think are really easy. Speed of repair, probably one of the best ones. Track your speed of repair religiously. Bonus points if you can track it by the stage, how long to a sign, how long to schedule, how long to complete, how long to get the invoice, all those things, right? Track that. Yeah, that's a great leading indicator. And then as you can monitor with the team, that's when you can start to think about as your organization, what sort of behaviors are your team members doing to impact that? We always respond to incoming maintenance requests during the daytime within 15 minutes. We're always assigning. We're always structured, you know what I mean? So it's really about connecting those dots to lagging, and that's where a lot of the data and information has been missing. And most people, one, won't even be able to tell your rent SAT, lag indicator, to much less. What are the contributing elements to that?  [00:10:32] Jason Hull: You know, that's interesting because in most areas of business there's a lot of myths and ideas around what creates a good experience or what actually creates retention or what creates things, and then the data says often it's not even true. So, for example, one of the, you know, when it comes to client retention or client success, or decreasing churn for SAAS or for coaching or for any business, the big mistake most people think is if they're happy, they'll stay a customer. And that's not true. Like we've all had happy customers leave. They're like, "oh yeah, I love it! You guys are the best and you know, and we're going to go do something else." it's not related to whether or not they're happy or sad in relation to you. For example, for client success, it's just related to whether or not they see a future involving you. That's really it. They could be miserable, but still see in the future that they want to be working with you or that they need you, or that they're working with you or whatever, and they will still stay a customer and some people are just always miserable, right? Yeah. So, you know, sometimes things like net NPS are not super valid, right? Net promoter scores, sometimes because you're like, okay, well if they're not a true promoter, they must by default be a true detractor, but that's not always true. Just because they don't love you doesn't mean they're going to go shout from the rooftops nobody should work with you.  [00:11:52] Ray Hespen: That is so true. And you know, one of the things that we've been really disciplined in studying, because we've got around 450,000 units on our platform, we process around 1.7 million service issues and we collect immense amount of data and information that we've been trying to like, study some of these behaviors. So I'll give a couple of them because I think this is really good. And Jason we actually studied on service issues, we started to map all sorts of behaviors because Property Meld's an amazing communication tool as well. How much communication happened, speed of communication, all these sort of things. Like we can't measure like how good your bedside manner is in communication. Not yet. But we would sit there and map that across. We'd map across kind of responsiveness we would map all that sort of stuff. We actually saw no correlation to resident sat and communication as odd as it is. Now, we know that it does, in ways, way more nuanced. It's not just, did you do the thing, it's how you do the thing clearly, because it's not as quantitative. But the thing we definitely did learn is ultimately that speed or repair was the number one largest correlation to resident satisfaction. Number one by far. Even in Property Meld, I think I was, I released some of these stats and data on our LinkedIn and stuff like that around, you got three days for an HVAC, you got four and a half days for plumbing, you got five days for an electrical before people start getting really cheesed off and you lose your chance of getting a five star. [00:13:11] But we've also discovered the same thing in investors you mentioned. Are they happy? Like what's my. CSAT score, it's customer satisfaction score. And what we ended up realizing, because we have around when we did this study, we had around 190,000 investor owners on the platform. Most of our customer service, the, you know, accidental landlord segment, some institutional as well. But the number one correlation we could find there, Jason out of everything. There's some interesting stuff there. We could dive into it more. But the number one is how much in maintenance costs are they spending annually against rent roll? Keep it under 12%. That's the magic. And you know, so that means like you're trying to keep turnovers down. That means you're trying to be competitive with money. And that means if you've got technicians are doing enough jobs per day that you're not getting, you know, roached on it. But the biggest correlation is keeping their cost down. Exponentially increase to the chance of risk if you get above 12%. And these are people that are not crunching a calculator and do an NOI calcs every month. There's a gut feel where once 12% happens and they say, Hey, I like you property management X. You're really great, but this doesn't seem like I'm getting a lot of money back. I'm going to go look for other options, so.  [00:14:25] Jason Hull: Yeah, that's interesting because there's kind of this trend of nickel and dime fee, like fee max, fee maximization, fee, fee, fee. And there's a point in which anything that can be done too little can also be done in excess. It can be done too much. And so it's interesting that, you know, related to data, it suggests that you can go too far and then it's going to start hurting you.  [00:14:50] Ray Hespen: Yeah. And I'll even tell you one of the things and I don't know if your viewers are super interested, we started actually kicking out this thing, like, are you familiar with like Maslow's Ladder of hierarchy? [00:14:59] Jason Hull: Hierarchy of needs? Yeah.  [00:15:00] Ray Hespen: Yeah. So somebody joked one time. And I took it to heart cause I thought it was actually quite brilliant. They said, is there one of those for maintenance? Kind of seems like there is. You know, if you think about Maslow's Ladder, it's right. You got food and water and there's a measurable there if you want to keep that. [00:15:16] Jason Hull: So for yours, it'd be speed first. Like, just get the problem off my freaking plate. Like, get it done.  [00:15:23] Ray Hespen: Well, I'll break through it a little bit. If you want to check it out, you can download the image on our website. We're pretty proud of it. And it's not Property Meld applicable. It's anywhere applicable. Okay? But it's the concept like a Maslow's ladder, right? You got water and food, right? If you don't have water and food, you're going to die and you need to go to the next thing. And then what happens is then once you go to water and food, then you go up the next one, and that's shelter, security, all that. And once you go up that, it's like recognition. Then once you go back, it's purpose. And I'm probably butchering Maslow's Ladder, but the concept is as human beings, we have to get the previous need met before we move to the next need. And so we actually started building this for maintenance. We call it ladder maintenance excellence.  [00:16:02] And really it starts down at communication. Communication's critical. You can't do anything else without getting good communication. But once you get communication mastered, that's when you start to get to scheduling efficiency. And we have metrics and stuff of how to do it. Then once you get to scheduling efficiency, then you can get to staffing efficiency because you know how many vendors you need, how many technicians you need, how many coordinators you need. Then once you do that, you can start doing really cool stuff of really driving preventative repairs and it goes through all the way to the top, which is you know, basically creating predictable NOI for investors. And it connects how all that marries together. But the reason I say that is along the way, it's how do you know you're ready to move to the next? And that's really hard. Where are you at in the ladder? If you're thinking you're up here and you're down here, it's like, go down here and fix this, then build back. Yeah. So anyways.  [00:16:50] Jason Hull: There's a similar pyramid and I'm trying to remember the name of the books. I think. I'm doing a quick Google search here, but I think... so there's this pyramid and it's called the customer satisfaction pyramid. I think it's from a book. Yeah. Called First Break all the Rules from the Gallup organization that does the Gallup polls. And it was a bunch of research they'd done, you know, on businesses and when it comes to the customer satisfaction and the pyramid, they had these four levels and the lowest level was availability. It was like, just answer your freaking phone. Or I usually use the waiter analogy, like, if the waiter's at a restaurant and he is never available, you're going to be pretty upset. The second level is accuracy. Does the waiter bring you the right food? And if the waiter does those two things perfectly, if a business does availability and accuracy perfectly, you don't even notice they exist. Yeah. It's not like you're like, "oh my gosh! The waiter actually brought me my food and actually came right and asked me what I wanted and checked in and refilled my water." You don't notice them. You're enjoying your guests or whoever you're with or whatever, right? Yeah. Now, the next level is where people start to pay attention, and most businesses are failing at availability and accuracy. The availability is low. They don't have Property Meld. They're not answering their freaking phones. Nobody can reach them like you'd be surprised. A lot of property managers-- you wouldn't be surprised. But some might be surprised. A lot of property managers don't even answer their phones. They get a lead and they follow up with it like a day or two later, right? And then so after availability and accuracy, there's partnership. This is like, "Hey, I'm in this with you." Like, we actually have a desire to help and we're going to work with you to make this happen, this partnership and the next level beyond that, in customer satisfaction where you're, it's beyond partnership is a the advice category. Now you're an advisor.  [00:18:43] Now, they trust you as being somebody in a superior position of knowledge or information where they're going to, you know, acquiesce their own will to you in some instances. And so for property managers, partnership's, good. But if they don't perceive you as being an expert or knowing more than them, then they're going to micromanage you at times, they're going to be a difficult client. And so that highest tier is advice where you can now give them advice and you're educating them and they know that you know more than them about some of this stuff. But if you do the first two, a hundred percent, you're a hundred percent available, a hundred percent accurate. Your clients won't even notice that you exist. They'll just not get angry.  [00:19:23] Ray Hespen: Do you know, I think what's so great that you said, and I think it marries up so well, we focus on those next steps without coming down and going, "I got to get some foundational pieces." And it just keeps toppling over and breaking. So that ladder, Molly posted where that ladder is. If you wanna take it, you got to just scroll down on the page a little bit. I see. But like the big thing is there's a lot of people who sit there and go, "we're going to get staffing efficiency, like nailed down. We're going to get it, here's how we're going to get it." but like, What's happening is you have can break down on communication the way that you can tell us. If you look on the left side of that ladder, happy residents tell you if you need to go down the ladder or up, right? They're kind of like your limiting force, right? And there's a point where they quit to matter. It starts to matter to the investor. And so kind of like your analogy is like a lot of people will start up a bit higher, probably the one they should. And it's like you got to go to those first two because if not, If you're not available and you're not accurate, there's no way that you can be a partner. [00:20:19] Jason Hull: Yeah. It doesn't matter. Yeah. I mean, let's imagine the waiter, right? You have this waiter and they come over and they're like super charming and they're charismatic, you feel like there's partnership. They're giving you great advice on what to eat, but they never show up to give you your fucking drink. And you don't have silverware yet, and they bring you the wrong food. This isn't right. It puts you in, you're in so much discomfort in having to relate now to another human being to express that they didn't do it right. You're frustrated. And so, yeah, it's absolutely true. Like most businesses, if they just did what was expected... I think most of the research indicates people don't really want their expectations exceeded. They don't want their mind blown. They just want them actually met. That's it.  [00:21:05] Ray Hespen: Yeah. I completely agree. And I'll even kind of marry back to the analytics and insights part that you were kind of walking through. Like you've got some measurables probably in the customer service thing that you can probably measure today and know. Yeah. And say, Hey, my response time. Like awareness, accuracy. There's ways that somehow that you probably do that partnership. You have a measurement or whatever that you can do there. Is that good? And like how much are you an advisor to people? Like are you consulting on how many houses they should buy or whatever. Like there's ways that you measure it, but I think that's the big gap for a lot of people, particularly in maintenance. If you look at that maintenance ladder, It's like, how do I know where am I even at? Which area should I be starting at and working on? And that's one of the big challenges about insights and we've got a really amazing product that's dropping in the middle this year. That's, I think it'll be industry shifting, but it's actually providing the visibility to where you're at on the ladder and what you should be working on. [00:22:01] Not just you, not just company X and be like, "how do I think I'm doing in my own little paradigm," but like, where am I at against my competitors? Really important to know because at the end of the day, like that investor that's coming in and looking that resident is chances are, has the asset and your only competition is not your own picture of yourself or what do you think it should be, it's about the PM down the road. So it's about the institutional partner. Oh, go ahead. Go ahead.  [00:22:30] Jason Hull: So let me make sure I understand this. You have a tool coming out and this is going to help people understand how they compare basically to other companies or maybe best practices in relation to data when it comes to maintenance coordination. You got it. So this is then instant analogy I saw in my head. Do you remember in video games, do you ever play a race car video game as a kid? Yeah. You play this race car video game. You see your score score at the end and then like you do it the next time and you're racing against the ghost car. It's either yourself in a previous race and you're trying to beat that time, or it's that ghost person that was some other player that you need to try and beat. So this, that's the ghost car. Having that data, you can see that other thing and you can, you now have contrast. I'm behind. I'm ahead.  [00:23:18] Ray Hespen: A hundred percent. And I think one of the things that's so difficult, Jason, is like the fact that people don't know if they're working on the right thing or the wrong thing. They make an assumption because one customer gets mad at them and says, you're spending too much on HVAC costs. It's happening. HVAC invoices are up 43% year over year. Yeah. You know, and it's like, hey. And so the reality is everybody's natural instinct is, oh my goodness, that means my costs are high. When in the reality their costs could be actually below market and they're trying to beat the crap out of their vendor to get costs down. And if they don't know if that's actually broken or not, they could be working on the wrong thing. Oh, good. Yeah. And so I think that's one of the biggest challenges a lot of people have. The idea is it's not like, oh, how's it against me and my competitor? It's what parts of my business are we excelling at and what parts are we not? We need to know that so we can actually go point at it.  [00:24:13] Jason Hull: This is brilliant because if the owner is pushing back on something and the property manager doesn't know, they don't have definitive data to know that this could be an issue or is not supposed to be an issue and is not, they then won't have the confidence to go to that owner and say, this is not an issue. It's completely in range. We have access to hundreds of companies data. We know where we're at, and we're actually a little ahead of the curve, so this is good. That gives them the confidence to go back to the owner and instill more confidence so the owner doesn't like quit or feel like they're being taken advantage of and then go down the street to another company where they get like, You know, railroaded. Even worse.  [00:24:48] Ray Hespen: They're worse. Exactly. There's one example, and I'll just give this super quick here, is we had a customer that had an institutional client. They were getting beat up on price, and I asked the question, I said, where do you think they're getting their information from? I have no idea. And they're like, it's like this. And I'm like, we have more data than information about invoice costs of different kinds of things like. And that was actually part of the thing that spawned it was exactly that. Most property managers, some of them don't even own a home. How are they supposed to know how much a hot water heater costs? How are they supposed to know when an investor calls them and screams on what it should be? They don't know. So the only way that you can, just like you said, is enrich them with data to feel confident to go back and say, we're actually doing better. Or if it is bad, it gives an investor or you know, the owner of the business a good idea to say, Hey. We actually do need to work on this. Maybe we need to look at our our pricing structures or our network or whatever.  [00:25:43] Jason Hull: So this is powerful because also for a property manager to go out and just try and get that, anecdotally, that would be viewed as collusion. That would be a dangerous thing. So now they're talking to other property managers like, Hey, what are you charging and what's going on with this? And so, good point. That's dangerous ground. And so the reverse, this is after the fact, and this is data. This is based on reality. And so you're just reporting on here's reality. But you're making it visible. Yeah, exactly. Solution. But it's helpful. Absolutely. It's good stuff, man. Okay, well I got to wrap up, but this is really awesome. [00:26:18] Hey, thanks man. Appreciate you having me on. [00:26:20] But yeah, everybody check out Property Meld. We still have that old link up if you go to DoorGrow.com/maintenance. Do you guys still get these? We send people to that.  [00:26:32] I'll ask marketing. I'm sure we.  [00:26:34] If you go to doorgrow.com/maintenance, fill out that form. And it's like a quiz to see if you could benefit from maintenance automation, which the answer is yes. Spoiler alert. If you fill that out, it will send your information over to them and they'll get connected to you. And I believe it says there's some sort of discount, so.  [00:26:51] Ray Hespen: Awesome. Cool. Well thanks so much Jason, and I really appreciate it. Great way to go check it out. And if you wanna look at that ladder. It's posted in there, so you can see that. It's a lot of cool stuff there, so thanks for having me on. Always enjoy it. Thanks for inviting me, man.  [00:27:05] Jason Hull: All right. Thanks for being here. Cool. So if you are a property management entrepreneur that wants to add doors, like we talked about in the podcast intro or the more important problem, you now are adding doors. You've got plenty of doors, maybe you've got 200 to 400 or higher. But you know deep down that adding more doors is just going to create more friction in your life. It's going to create more pain for you as a CEO. You're not going to enjoy your business more, even though you're going to make more money. You know it's going to mean less fulfillment in your day-to-day of enjoyment, less freedom, less of a sense of contribution and making a difference in the world. It's just going to burn you out, and you're going to feel less supported because you're just going to more people needing things from you and wondering, why won't my team think for themselves? Then you need to get into and check out our DoorGrow Super system. This is where we help you get an operations person in place. We help you hire, build out your hiring system. We help you get really good process software in place. We help you get really good planning software in place. This is where you now are able to get more fulfillment, more freedom, more of a sense of contribution, making a difference in the world, and more support in your business. The bigger you get, that's the right way to build your business. It actually should be getting better and better the more doors and more money you add because you have more resources if you're doing it the right way. And we want to help you make sure you're doing it the right way because that's not the default. I've seen inside thousands of property management companies. It's not the norm and it's the norm for our clients and we want to help you get that. So reach out to us. Check us out doorgrow.com and make sure you join our free community. Our Facebook group will give you free stuff. It's really cool. Go to DoorGrowclub.com. Join our Facebook group and you can learn more about us there. [00:28:52] Bye everyone.  [00:28:53] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:29:20] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

On this week’s podcast episode, we brought back a guest we’ve had on the #DoorGrowShow before, Joe Edgar from Tenant Cloud. Property management growth expert, Jason Hull sits down with Joe Edgar to talk about the many new features that have been added to Tenant Cloud to benefit property managers and what is next to come for the software. You'll Learn... [01:35] An Introduction to Tenant Cloud [06:44] The Different Systems PMs Need [14:11] Integrating Different Property Management Tools [17:36] Tenant Management and Roommates  [27:43] Accessing and Transferring your Data [31:55] Are Completely Remote Showings the Future? Tweetables “Listings are important because of course, as soon as you have a rental, what do you need? You need a tenant. Nothing worse than vacant property.” “So there's a relationship in all of those that you really have to harbor and that's where making sure you're connected to your tenants and you're connected to managing service for them is important because then they will reach out to you to buy one where if it's a bad experience, they won't.” “You're busy doing all this work, but then actually going back and making sure you're making money at what you're doing is often the last thing they look at.” “You have two choices in life... You can be reactive or you can be proactive. ” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Joe: Because that's one of the hard parts is you're busy doing all this work, but then actually going back and making sure you're making money at what you're doing is often the last thing they look at. They worry about because they're trying to provide to customers, their owners. Yeah. And the tenants, good quality customer support. And so that's where it's the hard challenge and making sure they're all connected in a nice, easy way.  [00:00:20] Jason: All right, we are live. Welcome DoorGrow Hackers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull the founder and CEO of DoorGrow. Now let's get into the show.  [00:01:25] All right, so my guest today is Joe Edgar. And Joe, it's been a while since we've had you on the show here, so.  [00:01:33] Joe: Yeah, definitely has. Glad to be here.  [00:01:35] Jason: So Joe started a company called Tenant Cloud. And today you're going to be talking about property management and real estate technology in 2023. So, Bring us up to date, man.  [00:01:47] Joe: Yeah, it has been a while since we first launched, I think back in 2016 was a real focus on the DIY landlord and trying to support that general group. And as it really has grown into-- our biggest following is now really property managers focused in the single family rental space. So, that distinction has come down to really the difference in logistics. And so, as many know in property management, if you're managing multi-family, then you usually have somebody on site, but if you're managing single family rentals, there's just too many properties. And so Yeah. Ends up being a logistical nightmare. And so that's really where we end up fine tuning our solution is all around the logistics, managing those single family rentals and helping you grow your business.  [00:02:30] Jason: Cool. So what have you been up to since then? I'm sure you've made some updates to Tenant Cloud.  [00:02:36] Joe: Yeah, there have been a lot of updates especially since then. I think some of the best things that really help a property management company really get going is the fact that you can sign up for Tenant Cloud and in just a couple of minutes for free. There are some paid solutions, but just on the basis of free, you can set up your own company website. From your company website, you can have its own listing portal. So all of your listings that you're going to manage, it can have applications and so tenants can find you. They can apply for a rental. You can manage that application, you can send it back for more information. You can charge a management fee or not. Lots of customization inside of there. You could have multiple bank accounts. If you have different owners, you can, send an agreement to an owner have them sign it. They have their own portal so they can own their own reports. And then of course, the more traditional stuff on top of that, which is, just managing the property itself. Everything from maintenance to just general communication with your tenants. And so all those things kind of fit in there. I think the most fun thing that we have that really brings a lot of value worth mentioning is if you follow the industry, we're starting to see these silos and vertical step up. I think the biggest mover now is co-star who is looking to buy move.com, which is realtor.com. And so they're really trying to have that niche. And then Zillow of course, exists. And then you have Redfin who's putting together a lot of other sites. And those are all around listings. And so listings are important because of course, as soon as you have a rental, what do you need? You need a tenant. Nothing worse than vacant property. So, we built this thing. We have so many tenants that come to us. Our affiliate sites, College Pads, and Rentler, are all really bringing us lots and lots of leads.  [00:04:25] So having all of these leads, we decided to go the extra mile. We said, what if we offered all of them the ability to basically say what it is they're looking for. And by telling us what they're looking for, we can then match them with all of the inventory of vacancies. And so we take users who are already, they came to us for the purpose of trying to find a home. And we have all these property managers who are trying to find tenants into their rentals. So we built this thing called premium leads, and really you could think of it as like Tinder for tenants. Okay. And so what happens is the tenant will put on what they're looking for. They're like, "I want Southwest Austin. I'm looking for, $2,500 a month, a two bedroom, one bath, a yard, a fence." Say the general things they're looking for. And the second you turn on premium leads as a landlord, it will take all of your properties, even if they're not listed, it'll have them already matched, but they won't see it. The tenant won't see it until you actually make it live by listing it. And immediately all of those show up for the property manager. So the second you turn on premium leads, you have potentially, like, I love turning it on because it's such a nice feeling to like list a property, immediately you have like 15 leads, you're like, "That's great," and you invite them to apply. So you just invite them to apply and that sends real invites to those tenants. So those tenants now got a personal invite from you and you can go through, the tenant goes through it. If they like the property, they can swipe left and ask more questions. They can fill out a rental application, maybe schedule a showing, anything like that. Or if they don't like it, they swipe left and they move on their way.  [00:06:03] Jason: So they'll swipe right if they like it. Yep. And left if they don't, and then it's swipe left if they don't. Got it.  [00:06:08] Joe: Yeah. So it's a very non-abrasive way to approach all of these different tenants looking for leads. And so it now is the largest lead generator inside of our solution. So we integrate with Zillow, we integrate with realtor.com, many of the Redfin solutions, but it now outperforms all of them. It produced about 60% of the leads on Tenant Cloud. Wow. So it's a really nice way to go and find and fill your tenants. So again, everything, it's really about bringing all of those things that you have to property management into one easy solution at a low cost, help you save time, grow your business.    [00:06:44] Jason: So if somebody already is like knee deep in another property management software, can they still use the premium leads? [00:06:50] Joe: Oh yeah, for sure. It's easy. I mean, that's what's nice is it's segmented off. We have a lot of property managers who do multi-family and multi-family is a different beast. We have a lot who hack us and use us for like multi-family, but as I said, the single family rentals has a logistics problem and I can explain why we're so different in that space. Sure. But when you get into multi-family we know where the space and we know the industry. And so if you're in multi-family more traditionally after one of those larger property management solutions, and most of that is in part because multi-family is 95% owned by institutional investors. And institutional investors need data. These large rates. And so we're not designed for that big stuff. We're really out to help smaller property managers kind of, grow their business and not answer to large rates. So the way the data flows separates us pretty substantially. And so that's what would make a unique thing. So on the logistics problem you have, maybe you have one maintenance person, but a lot don't. And so the key feature is if you were a property manager, you already know, it's like how many property managers can manage how many units? You have the math and it's generally around a hundred units per person.  [00:08:04] And you can get some that are starting to get more efficient. They're getting into like duplexes and triplexes where they get down to, maybe the 85 to one. But normally about a hundred. And a hundred's a good number because if you're also a broker, then you also know I'm managing these properties because I know about 5% of them will bring me additional business annually. Either my clients are selling or my clients are buying, or my tenants are looking to buy. Right. So there's a relationship in all of those that you really have to harbor and that's where making sure you're connected to your tenants and you're connected to managing service for them is important because then they will reach out to you to buy one where if it's a bad experience, they won't. [00:08:43] And so having a nice solution on their phone that they can easily sign a lease, they filled out their application, they can pay their rent, they can view everything that's in their power, is great. Then in addition, if anything happens, they can go to their phone. And there's four simple questions that breaks 1500 problems with a home down into four simple questions that are icon based. And so they select them and they can take a picture and a video and it goes direct to the property manager. And the property manager now has the choice because we can't say, not all tenants are accurate. Not all tenants know how to fix anything. And so, whatever they say the problem is, it could be something different. And so I've had this on my own experience where it's like, I find out the roof keeps leaking, but I'm like, you realize it hasn't rained in weeks. And you find out it's the air conditioner. It's like catching condensation. And so you know what they say the problem is and what it actually is is not always the case. And so it's nice. You get the maintenance request, you have a picture, you have a video, you have a small explanation if they wanted to add it to it. And if you have a service professional that you work with, you can send it to them or you can change the category. You can schedule it from there. [00:09:50] And once you assign it to them, they can now communicate directly with the tenant, but you are privy to all the messages. And now they can schedule this outside of it. Or you can plan for them, but they can schedule outside of you having to do it constantly. Now, that's one method. It can also be if you're in a property management office there's one here in Austin I just talked to. They have 50 rentals, so they're growing theirs. They're managing on behalf of about 10 owners. And so that's not big enough on their level to have a maintenance person on staff. And so they contract everything. And so what's nice is inside of theirs, they can actually use it inside the maintenance request. They can get a quote and that quote goes out to all service professionals in the local area that can then send in bids on behalf of that. And you can run it in two different flows. You can say, "okay, well I'll make the decision," depending on what you have with the owner. Or you can send the different quotes to the owner to pick one of them. [00:10:44] And so there's lots of different ways to manage that. But now once you connect them, you can then do the same thing. You're like, okay, I like your bid. You do it, I'll schedule you. You're in. And then you have privy. And then there's a way the tenant can say, well, it's not done exactly. And they say it is done. So you kind of do a lot before you actually have to go on site. I mean, when I was doing property management, the worst thing was most of the site visits are not what they said. And they're things like, "the lights are out," and it's because the light bulb is burned up. It's like, well, that's not, you just wasted a lot of time for me to drive across town. There's two hours of wasted time to do this. And so having those logistics are great. That's the heart of Tenant Cloud. But then on top of that, it's like, okay, well the logistic problem and getting on the phone and scheduling is tough. Then I got to account for all this. [00:11:30] And accounting is the next piece. So when the tenant goes in and enters that, we have those categories of which they're selecting by icon based for maintenance requests. They're matched with both revenue and expenditure and capital expenditure categories inside the accounting automatically. And then in addition, you can keep track of any assets. And by that I mean if you have a refrigerator or an oven, you can store all those in. So if a maintenance request comes, you can actually look up any piece of equipment like a fridge and it can tell you, show you all the maintenance requests it's had. It'll find correlations like things. You're replacing this motor every year so you can make those decisions on like, we probably should just get a new fridge. But then inside of that, all of those are matched with the IRS 1040 Schedule E categories. And so what is great is you as a property manager who is going to be doing your 1099s at the end of the year. Your contractors, if you were to bid it inside the system, you can pay them and they can invoice you. So if it's someone you don't know, then of course they'll create an invoice for you after the work. But it's someone you do know and they just, you're figuring out what the bill is on the side. You can message them on the side or directly in the ticket, and then you can pay them directly. What's nice is when it comes to accounting time, your owners have a very clean, simple 1040 Schedule E already done for them that has all their costs laid out, that you didn't have to go back and do anything extra, has all the receipts matched to it. Each one goes all the way down. And each property manager, as a refer to, are these "additional opportunities." There's lots of ways, depending on how you have a relationship with your owner to set up those additional opportunities. [00:13:06] For example, you could just charge like, I have a 10% fee on top of any cost for maintenance I do. And so that would be added into maintenance requests. So that's already being done. Or you could have it, we have a flat rate that we charge for tenants. I mean there's lots of ways to set it up for your property management company to make sure they're accounting for their revenue as well. Because that's one of the hard parts is you're busy doing all this work, but then actually going back and making sure you're making money at what you're doing is often the last thing they look at. They worry about because they're trying to provide to customers, their owners. Yeah. And the tenants, good quality customer support. And so that's where it's the hard challenge and making sure they're all connected in a nice, easy way. And everything kind of flows in a simple recurring way that is predictable and you know for sure how it's going to work is an important part of growing your business. And so then that passes through to the owners can fully see their reports. You have your reports for your 1099s and all of it happened behind the scenes without you really looking at it. So the heart of it is to be kind of a logistics and accountant, a back office person to help you, a small property management company kind of grow. [00:14:10] Jason: Cool. Cool. So the maintenance coordination piece, solving that logistics challenge, can that be used by companies that are also using another property management software already?  [00:14:20] Joe: Yeah. Sorry, I kind of went on a-- I digress. That was your question before. You can kind of go on and use whatever piece you want. So we have lots of larger ones who are doing multi-family and they have found that they get all our leads at Tenant Cloud. So they still use their traditional property management software to answer to the beast above them for accounting. Yeah. But they get all their leads and manage all their rental applications through Tenant Cloud. And for their business, they get to keep the application fee. And so it's nice because they can set all that up and so they run everything there. So all the applications you can do a background check, you can do a full one, you can do a partial one. So there's lots of different variations you can do in there. And so it's nice for them because they manage everything on there. Once they actually do a lease, then they actually put them in their other property management software and do it on there. And then some are slowly kind of converting into Tenant Cloud as it does more for them. As they see, they're like, well, why don't we just move here? But in a lot of the wreaths they don't. But on slower ones, yeah, you can manage just leads.  [00:15:15] We have a really nice CRM tool built in. And so because we give you a free website and then we distribute your listing to so many different places, we set you up on a unique text number. You don't know what it is, it doesn't matter to you, but what's great is it does matter to someone looking at your rental. And so to find your listing on any site, and then, if I have a rental application, that's an easy one. I'll fill out the application that goes through the system and you get a nice, clean application. You can request more information, whatever you want to do. But when it's just a lead, which is how most of them come in. They'll send you a message and they can do it via text straight from the listing. They hit a number, they send you a text, and you can respond to them via text, right in your Tenant Cloud account. And so that's where you can take all the different messengers, have it in one place, nice and simple track notes, maybe it's, maybe the one they're looking for is not available now and you want to use it for later, so you just tag it. [00:16:08] But yeah, there's different parts of Tenant Cloud that you can use for just different parts of your business, depending on what you're doing.  [00:16:13] Jason: So what you're saying is on the tenant side, there's basically CRM for tenant leads and that you can manage that communication and you can do it through text message because the listings have that number on it. Exactly. And then on the maintenance coordination thing, which also sounded really cool that piece can be used standalone as well, is what you're saying?  [00:16:31] Joe: Yep. Correct. Okay. Each one is really segmented Now if you use them altogether, of course, they just make life easier, but sure. But yeah, you really can use each little function separately. Now, if you wanted to come from another software, you can easily upload your data. So we have tools for that. And if you ever wanted to take Tenant Cloud data, this is one of the things, it has been our company's motto from the beginning, that we are not making business on holding your data randsom. And so you can easily take your data at any time you want and use it and flow it anywhere. And so some of those have been good. We have a QuickBooks integration, so that makes it seamless. But we have others who use some other unique accounting software, and so we've made that so you can just pull your data and put it in anything else that you want as well. So there's lots of reasons to have that, but that's an important thing before you use one, you're like, I want to know that I can get all my data out of it. because you're uploading images. Yeah, you're uploading tenant information. I mean, it ends up becoming your record retention for a lot of stuff that you're doing on a legal basis. And so it's important to have all that, but to also have access to where you can get rid of it on a digital form, but store it somewhere still. [00:17:36] Jason: So if we were to look at the Tenant Cloud ecosystem or, system as a whole, we've got, the tenant lead sort of CRM in communication for taking care of the vacancy situation. We've got the maintenance coordination piece, we've got the accounting piece you've mentioned. What other major?  [00:17:53] Joe: So there's tenant management. Tenant management is just one where you want to have all your information about each tenant. It may flow from the application but then once you have it, you want to message them. And so you could have tenants all on one street and you need to message them and say, "Hey, street clean, street sweeping on this date. So you can message a part of them. Or you may have all your tenants at large, you have a policy change you're going to do, or you may have two cities and you say, okay, in this city this is changing. And so just helping manage all of those tenants and having a place to keep both private and information that you share with the tenant is really important. [00:18:29] So there are things like, for instance, if you enter an accounting or you send us something, it's nice to know that it's live. And it's also nice to know that they have seen it. And so when you have a message, you can see for sure that you see, as we all know a hard part, but a reality of property management is that you will end up in a court, every so often with a tenant. And so making sure you have an easy place to account for all your timing and what you did with a maintenance request. And all of your messages in regards to just your relationship in general in one place is really important. And so to be able to pull it out and show dates and to be able to show what was seen and what wasn't seen is really important. A nice, easy process to kind of print it out and, bring it to court. As you will know, it's a huge part. And unfortunately that's part of the business, but it is one that you really, if you're going to grow your business, it's an important part to have, early. So there's tenant management. [00:19:20] We have a whole calendar scheduling piece, and that's really important because it's the next piece that I'll talk about is as you grow your property management business, in the beginning it's usually just you. And that's fantastic because that is definitely where you're like, I need to grow this. And then you bring out, and sometimes it's a significant other. That's fantastic if you can pull that off. Right. And so there's two of you, right? And often they'll use the same logins, right? Because they're like, there's two of us. So we're talk, we see each other enough that we'll do stuff. But once you have that first real hire, it's a different business. Because now you really don't have the same, it's a professional relationship and you don't have that same thing where you're like, we do need to, like who's doing what. Yeah. And so even though I say it's this calendar function, we have a team feature. You can go in and add team members and you can change all the settings for each team member. [00:20:10] And so it could be like it, you can assign them specific properties and so they're only able to see stuff on properties. You could limit them from accounting, you could limit them from certain settings. And so there's lots of ways, depending on what the team member is. For instance, you could have accountant, you could have a property manager just doing marketing, and you could have someone who, does maintenance. So just depending on what it is. But what's great about your team function is now you have a way to communicate with them. So very easily in a chat you can press a hash sign and find any of your properties in a message, and it will pull that up and then have a link to it. And then at sign you can find any one of your team members. And from a message, you can make that a task. And so all of a sudden tasks are running for everybody. And as the master account, you can see all the tasks going through on the calendar, and then you can message, each other about different tenants or any type of messaging that goes on there. And so you'll find, and then the system itself will self-generate tasks for you. For example, ones you should, they're obvious, that is like, all right, I have a lease. I want to know two months in advance before this lease expires.  [00:21:12] Tell me, cause I need to renew it. It could be, I talked to this tenant and they're going to schedule something, they send a message and from that message, they're going to pay rent two days late. But I get it. And so boom, you have a task, you're going to have those reminders come up. And so that's really that angle from trying to get the system knows a lot of the things that you automatically need to do. So they're already in there. For instance, every six months you need to check smoke detectors you need to do servicing before winter. There's cleanup. So all those things can be automatic inside of that calendar, but then really running inside the team function really brings it to work because now you mix that with your maintenance team or whether they're outside or not, but it's assigning them and it really becomes a magic. So we built this kanban board where you can manage a lot of those tasks, especially when you get more than a hundred properties and you're trying to grow your business. You'll know exactly what I'm talking about. You're just like, "ah, I forgot." So you have two choices in life. When it gets that big, you can be reactive. Or you can be proactive. So we have tried to build a system to help you be proactive. And that's, it's telling you before you think about it. So then you're like, "oh yeah, I totally forgot about it." I do need to schedule you that. You move it into the next kanban board, you assign it to this person, run it there. And so it's really a great way for a team to come together and trying to do property management. And so that's one of the features. There's quite a few features, but another one I'll mention that's worth noting, that makes us different than other solutions as well is when you go down to single family rentals, a lot don't know-- many in this area will know-- but universities are very unique in that universities have a higher density of smaller property managers managing around the university than non universities. And so if you get out away from the universities, you're into these big apartment developments and so they're slightly different. And you get into universities and there's quite a few property managers that just service around that area.  [00:23:01] And so one of the struggles for the property managers is always how do they deal with roommates? And you have so many different ways to deal with a roommate. You could take one rental and I could rent out every room individually, or I could rent out the whole house and just say, okay, well I'm going to, I'll rent out the house to all of you, but each one of you are going to pay a specific amount. Or I can rent out the whole house, and I'm going to say, all right, I don't know. I don't care. You're all on the lease. However you pay, just get me the money. And so those are all very different structurally in how you set something up and it all the way down from receiving an application, vetting them, moving them in to sign a lease, and moving them out, holding deposits and the ongoing relationship.  [00:23:42] They're all different. And so what's nice is we really have thought through a lot of those, and they're not just on roommates. So we're starting to see this happen now in older care centers. And so, assisted living of sorts, they are now doing a lot of roommate features. And so these are older care centers that are using us for property management software. However, they usually the tenants are self-sustaining, so they don't need a nurse. They're just living inside of a center. And so the same kind of features. And so a lot of this roommate functionality is taken off and then really during 2020, like, when Covid kind of happened, it wasn't as popular. It was a feature that we had built in and we we thought it was really aimed for the college universities as college pads, one of our partners. And so we had built that in, but really starting last year. And my own take is that real estate went so expensive that you're seeing a lot of roommates pop in. And so a lot of people are procrastinating moving into their own place. Rentals are taking off and people are moving in together. So now you see this over pouring. So the last report realtor.com did it. However it follows what Wall Street Journal did. That theirs was, there are 2 million households formed again last year, which means we are missing 6.5 million homes in the marketplace based on them. And if we are missing 6.5 million and things are so expensive, you are saying we have no choice that roommates are just over pouring into everyone's lives. So what they didn't think was is now a single family home, an apartment, everyone is now dealing with roommates and it's created software problems everywhere. [00:25:24] One that we have already solved and thought through. That's a great feature because how you rent them matters. It's, it changes the entire relationship from being a customer support frustration. Like if they're each paying a separate amount and you're doing rooms, but you're treating it as a solution where they're all in the same one, you'll just mess up all, for everyone. And so being able to manage those on so many different levels is really nice because you can have separate leases. One lease that they all sign and they all share their invoice, where as soon as one pays all the rest of them see it and they can figure out how to pay. Or you can just say each one of you're paying and then somebody's else is out and they're done. Or you going to move one in and move mountains, move the deposit. So it becomes such a problem that it's one to be noted. But now in today's industry, were roommate renting is just a commonplace, so that's a feature worth talking about.  [00:26:11] Jason: Very cool. Yeah. Cool. All right, so we've got the maintenance coordination, the accounting, the CRM for tenant leads, tenant management and communication, you've got the calendar scheduling, which sounds like kind of team communication, and then you've got the Roommates functionality, so,  [00:26:29] Joe: so we have a whole document. So anything you can manage all your, so we have both PDF and from scratch. So if you want to build an agreement yourself, you can drop in, easy pop in auto fills on the template, or you can just add a PDF and build the template. We also have them available for every state and county if they're divided. So lots of stuff to do E-signature and create your own lease agreements and manage kind of all that in-house as well. And then notices, So you can build a template notice, send it to a tenant when you know, rent's due or something like that. [00:26:58] Jason: Nice. Very cool. Yeah. Well, sounds like you guys have been busy so.  [00:27:03] Joe: Very busy. Yeah, it's been fun. Yeah.  [00:27:06] Jason: Very cool. Well, yeah, I can see how this would stand out from some of the property management software. Now you had mentioned that people can migrate from their existing software. So how difficult, because this is usually really painful for people, Yeah, to transition. I've seen people go from AppFolio to Buildium or AppFolio to Rent Manager or switching to Propertyware or Propertyware to AppFolio. Like, so how difficult or easy is it to switch from one of these to Tenant cloud and are there some that are easier than others? [00:27:42] Joe: No. So we've tried to make it as easy as possible. So what we do is we give you a template. So if you go into upload, you can find the upload and then you download a template Excel file. And basically you'll take whatever data you can get. That's the hardest part really isn't so much setting it up in Tenant Cloud. It's more other companies aren't so willing to just give you data. And that's the hardest part is that if you can get the data from them, we give you a template that's really easy added in and once it's in, you're done. Your tenants are set up, all their information is set up. The lease is set up. If you have late fees that are in there, they'll be set up. All of it will be done. Your property will be set up and you'll be live and it'll be working. But it's all, it's really more a problem of like, which software relationship are you trying to get out of? That's a hard one because for us, and we have many that call and like, " well I just want all this!!" And we're like, fortunately Buildium won't give us that data. We can't call them on behalf of you. Yeah. So the only thing we can do is like they can give it to us. Yeah, exactly. So that's the hardest part in getting in, helping people migrate. Is just being able to pull all the information. They spent so much time, putting in another software but on our end, it's really easy to kind of set it up. [00:28:52] And that's the heart of it is because everything is connected. It's helping you do each phase of your life. Because if you ask a property manager, like, what's the hardest part of your job? Well it really depends like one on the season, on the time of the month, and what stage of the property is in. Because if it's vacant, of course it's like, I need a rental, I need leads. I got to find this. But if it's, if they're all rented, well now you're like, oh, I got fridges breaking everywhere. So it just depends on the job. So the software's always set up to help you in all of those sanctions of your life. And so uploading it is really easy because it connects to all of them automatically and you're kind of done. But yeah, again, the hardest part is getting the information. So, yeah, I wish I could say that was really easy, but that's a part we don't usually get to touch. So. Cool.    [00:29:35] Jason: Well, Tenant Cloud sounds pretty cool. I have not heard of too many people using it yet, and so I'm really interested in getting some feedback. That'll be really interesting to see. So it sounds like you guys have really been innovating in the space, so.  [00:29:49] Joe: Yeah, we've been trying to keep it as affordable as possible and get it going. We now have over a hundred thousand active property managers and landlords. Using it and over a million tenants. So it's been fun, but you'll look at how big the market is and there's 15 million DIY landlords and something like 18,000 property managers. And, it's a small slice. [00:30:11] There are many out there still using, Excel or, a back of the notebook to keep track of stuff. So it is more about getting the word out there and let them know that there is a nice, easy solution to use.  [00:30:21] Jason: Yeah. Very cool. So, now if they have a website, like say from us third party website or their own site or whatever are they able to get the rental listings?  [00:30:31] Oh, I love that you said that. Yes.  [00:30:32] An embed code to put into their site.  [00:30:34] Joe: Yep. So if they just give us, they can tell us now, I will give you a quick hack so there's a quick hack, but then we can also help them do it. And so the quick hack is we give you a free site and if you have a listing link, so if you just relink that listing of yours and use Tenant Cloud, it'll automatically go there because it's the relink. Right? However we can help you customize it. So the free one we give you is going to be an extension of Tenant Cloud, right? Yeah, it's our free version. But if you want us to host it, we do have to be given the credentials, but we can host it and then you'll have an active live site, and then there are parts of it you can turn off or turn on. So you could use, if you've already built one, you say, I want to host this, but I still want the listings on my native site. We can do that for you. We have quite a few that do that. So, and the listing functions nice. It gives you a map, it'll show all your rentals. So you have a sub thing that you can click and, see a preview and then you go to the full listing. And then on there is really where the CRM powers because it says, 'do you have a question?' Or it'll be like, 'schedule a tour' or 'fill out an application.' And so each one of those, so if they schedule a tour or have a question that goes right to your CRM. And so that's where you can respond to them how whatever format they want to respond. If they give you email, you can do email. If it's text, you can do text. Or if they create an account, they can talk actually through the Tenant Cloud app. But then of course they've got an application, it forces them to put that behind some closed information just so they're not  [00:31:55] Jason: I'm seeing some-- put it out-- Smart property managers switching from doing one-off showings for every vacancy constantly to doing open house dial. And is that possible using Tenant Cloud?  [00:32:08] Joe: You can schedule them as open house, but what we don't have and that what we want to do, and this really came about from Covid, is we've been working with a company, so it's coming out here in the future, but it's not there. And that is to be able to do remote showings. So the remote showings are slightly different than open house. What it is soon you'll be able to have where you set up, it's a door lock, it gives a specific code to a phone, and then there are two cameras set up in it, wifi, and then so you have control of all the doors and you have a camera view. And so someone can go in and quickly get a text number that's going to be live for 10 minutes and you can literally watch them. And give them a short tour before they go out and you can secure the place back up and know whether any new windows were left open or any doors. And so you like, do those. So that's been more of the answer we've done just because it is, if you do the open house it there, there's a lot of things that require onsite. So it's like, how can we help property managers again, with the logistics problem. Yeah. And logistics problem's the hard one because you go, you list the property. And half the problem is like only 50% of the people show up showings and you drove a long way to get there and you're like, Ugh. And so yes, to get as many people at a specific time is great. And so you can kind of set that up with your calendar. That's easy. But the real heart of it is like, how can I show this and actually just be right here on my computer? So I could do five showings at the exact same time from my laptop. And that's really the heart of what we're trying to get to, is that you should be able to do that during business hours, know that it's locked up and know who it is that went into the rental. And so that's part of it. They have to get verified in order to get a code. And so they're using their phone as part of that process. There's a picture and an id check as well. And so they're verifying themselves, which just helps keep honest people honest when they're setting up and doing a rental. So you're kind of doing a bit of vetting as you set some different things up. So, so that's more of where we're trying to go, is trying to get more remote.  [00:34:04] Jason: Cool. Cool stuff. So, well, I think everybody should go check it out. How can people get in touch with you or learn more about Tenant Cloud? [00:34:13] Joe: Yeah, I'm always easiest on Twitter, so, @Joe_Edgar_ , always accessible there. Tenant Cloud's the sites, t e n a n t c l o u d TenantCloud.com. And you can find us on all the social media. But yeah, definitely hope to check it out. It's, like I said, we have a base version that's free and then, other features that come on top of that. You can set up your bank account. Receive applications, list your property, move in a tenant, and collect rent online, and that's all free.  [00:34:42] Jason: So, Cool. Very cool. Yeah, I think that was the first episode we did with you. You, we were talking about how I think software for property managers will be free someday. So.  [00:34:51] Joe: Yes. I honestly think it's going to go that more and more features are coming to where it's like, the more of your business isn't there. Like some of the stuff I hope we get to, and I'll mention this just because more of the viewers are property managers, but if you remember that I talked about the maintenance request function and getting a bid. Well, I'm no stranger to property management. I own a couple of property management companies. And built the software off of that. And I know in our, one of them is fairly large, and so we have a maintenance crew, we have a turning crew, we have a painting crew. We now even have a a cabinet crew. We go through so many cabinets. We're like, we just need to build these ourselves. And so we have all these different crews and they're just doing us. But one of the biggest costs is the downtime. And so for them it's like each one of them is a side business. And so it's like we've been trying to like think of ways there, like how can we grow this? And I know I'm not alone. And so what we're hoping to get to is that all the property managers who use us are. They'll soon have a little flip that comes up that they can turn on to now get leads. And so they will be part of the ones like saying, Hey, we have a service that does carpet cleaning. And so inside of my normal property management, now I can actually go and service people outside of the properties I manage if I want to look to expand some of the businesses that I've now created. [00:36:10] And so, and it's unique because property management is different. Like if I go and if I say to a property manager, Hey I have a property I need to do a turn on. They know exactly what that means. And there's not just one contractor outside of property management that could do that. And so property managers are in a unique space where they're like, well, I know exactly what you need. I need to go do an inspection. I need to check the carpets, I need to check the walls. There's probably going to be some painting. I got to do a little plumbing. I may even have to do some hvac, I'm going to have to do a little landscaping. And all of that's tied into it and owning a property manager has built out some of the functions to be able to service that. It's not all the property management companies, but quite a few of them will do it as they grow, just because they're like, well, we're now in-house. We're doing enough of them. I've got one lawn mowing guy that's running or something. So, so it's a nice feature that we hope to really bring out to embrace our own customers, helping them now find and grow their business in other unique ways they never thought about. So.  [00:37:05] Jason: Awesome. Very cool. Well, Joe, thanks for being on the show. Appreciate you being here.  [00:37:10] Joe: Oh, my pleasure. Thanks.  [00:37:11] Jason: All right, so check out tenantcloud.com. Sounds like it's really cool software. I'm really curious to get your feedback on how it compares to whatever else you've been using or what you're using for those that are doing research lately. So, let us know in our Facebook group. So join our free community that's available to property management entrepreneurs on Facebook. It is DoorGrow Club. The DoorGrow Club. You can get to that by going to DoorGrowclub.com and it will redirect you to our Facebook group. Answer the questions and join the group and we will give you some free gifts as well and that can benefit your property management business. And, check us out at DoorGrow.com. We are the world's leading property management coaching mastermind. We are helping grow and scale property management companies rapidly. We would love to help you grow and scale your business, figure out operations, make your day-to-day easier, and take some vacations, people.  [00:38:05] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:38:32] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Are you aware of how much money you would need to protect and potentially replace all of the assets in the properties you manage? Join Jason as he chats with Aaron Lombardo from North Star Reserves about what a reserve study is, and how having one completed can benefit your property management business. You'll Learn... [01:21] Who is Aaron from North Star Reserves? [05:09] What is a Reserve Study? [16:30] What is the Difference Between a Reserve Study and an Inspection? [20:14] A New Concept: the “LIL Effect” [33:50] How to Stop Your Clients from Micromanaging You Tweetables “Property's easy to manage. People are tough to manage.” “Retaining a client, you're continually selling them on why they should be with you. It involves trust.” “One thing that property managers incur too much is blame.” “Each property is a business and it needs to be able to be maintained.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Aaron: what the reserve study really does is creates kind of an internal bank of their own funds and we help them manage a threshold so they can have a zero base threshold where they're just managing just enough in contributions to maintain those assets over long term or they can increase that threshold so that there's a nest egg if you will, a buffer or padding [00:00:21] Jason Hull: Welcome DoorGrow Hackers to the # DoorGrowShow. So if you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not bebecause you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now let's get into the show. [00:01:21] Aaron: I went in and got my undergrad, my bachelor's in psychology. So I majored in family and marriage therapy and kind of the end of that I realized I didn't want to be in psych. I love it. I love people, but I migrated very quickly into the construction industry. And I worked for the third largest builder in the country and managed multimillion dollar budgets as far as from the building side and construction. Was recruited by the largest builder in the state of Utah and spent quite a bit of time with them working through kind of their ranks, managing, again, oversight on millions of dollars in purchasing materials, actually building the structures from the ground up. That experience led me into the general manager position with them on their custom home division quietly running this custom home division. They were really a track builder and they had all sorts of, different styles, designs and levels of building from commercial to residential, and they had this quiet custom home division that was really exciting. It allowed me to really apply my psych trade into sales, dealing really with high-end buyers and executors buying properties and interacting with those properties as investments and so forth. [00:02:33] And ultimately that kind of landed quite a bit of interaction with building the actual communities themselves, HOAs, working with those HOAs. And then I had an opportunity to really jump ship and partner with a friend of mine in rental management. The short version is that he had a deal to buy a pump company fell out from underneath him after he'd literally moved across the country. And he kind of started by default just managing a rental property, a family's rental property. Anyway, long story short is he needed somebody to come along and help out with that, both on the HOA management and just generally the business. So, We ran this business, we expanded it over two states, Idaho and Utah. In the end, we separated. He took the rental management, I took HOA management. We both have grown those. I really enjoyed the HOA management side of it. It provided a lot of opportunities to interact with property managers as their competitors, but also with the boards. And so it was really by forced majeure that I had to take a deep dive into kind of the rental management, interacting again with real estate, which is where maybe my education wasn't, but my passion certainly was. And then I had an opportunity to buy this little mom and pop reserve study company out of Emmett, Idaho, and this was just a retiring couple that I had actually used their services several times in the rental and hoa management industry. And I just loved the idea of getting back into the budgets, but it afforded me the opportunity as well to get into the field doing site inspections for these properties while managing these budgets. [00:04:08] And so I did, we sold the HOA management company. We bought this little mom and pop. We've grown it to eight states, and then we consult in several others. We're in multiple markets within, kind of these states and subsets of these states, destination stops and so forth. And I'll tell you what a reserve study is here in just a second, which is why I'm here with you, I suppose, Jason, but we do, reserve studies and site inspections for golf courses and country clubs high rises. We do commercial properties and strip malls. We do a lot of homeowners associations that have clubhouses and buildings that they have to maintain in streets. We've done some really cool townships where we've done entire, small cities or small towns, airports And and then water treatment facilities. So we, we feel like we've got a real, broad gamut of these things. These properties of different sorts. Some are owned, by a governing body like an hoa, and some are owned by real estate investors or owners that are looking to track their costs. And that's where the reserve study comes in itself. [00:05:09] Jason: Got it. Cool. So tell us what is a reserve study? [00:05:14] Aaron: Right. The magic question. So a reserve study is really just a 30 year outlay of all income and expenses and using that contribution is what we call it, a contribution of that revenue to reserves or savings to maintain and repair all their physical assets over the course of 30 years. So it takes in a lot of aspects of that, right? You have the revenue that comes in and we call that the contribution. And it's just a piece of maybe the property's total revenue and then that contribution will fund the future maturation of all of those assets from the replacement of the roof to the maintenance of the plaster in the pool ceiling on the streets, et cetera, et cetera. And so it really takes, the full gamut. It includes inflation and the cost of inflation that compounds over time. It includes the useful life is what we call it in the industry for each individual item, right? Not everything wears the same and not everything wears the same in different. Locations. Our California clients have properties, in Spokane and in Spokane. It's just a harsher climate. And so their properties weather different, and if they don't take that into account and really understand the nuances of that it catches them off guard because of the weathering that occurs in a different, in different places. [00:06:29] Jason: Right. Just like cars in winter areas with the salted roads, the undercarriage gets rusted out. California no issue with that. So, That's right. At least not in SoCal. All right. So, cool. All right, I get that. So how do you go about doing these reserve studies and how does this relate to property management? I really haven't heard of any property managers doing this. I'm sure some do or should be. So tell us about that. [00:06:58] Aaron: Well, so the truth of it is there's not a lot of well, let me rephrase that, a lot of property managers do that if they're, if they have oversight in an HOA or some sort of governing body. We break our service down into two pieces. There's the actual physical creation of the reserve study, and then there's the consulting on how to use the reserve study, our other kind of group of clients, aside from just HOA property managers. Are, owners and business owners. So, typically when we're working with a property manager on a rental property or a multi-unit property, it's usually the owner or, sometimes it's the CFO or CEO that's looking at this property from a strictly, revenue generation standpoint. And they're looking at their total expense load and we build that expense load. So it comes in two parts. The first part is really just the physical creation of the reserve study that involves a site inspection. So we perform a physical site inspection where we comb through every piece of this property. Let's use a high-rise as an example. A high-rise might have everything from a generator tucked into the parking garage to, common area, boiler units that are serving all of the rental units above, and the roof and the windows, and all of the pieces. [00:08:07] In a typical high-rise, there might be 80 to a hundred components. That all have a varying degree of cost. Some of them need to be touched or maintained on an annual basis, and some of them you don't need to really worry about but every 30 or 40 years and those, long-term items usually have a significant cost that we're trying to help our owners avoid loans on. [00:08:29] Right. They can essentially, Jason, what the reserve study really does is creates kind of an internal bank of their own funds and we help them manage a threshold so they can have a zero base threshold where they're just managing just enough in contributions to maintain those assets over long term or they can increase that threshold so that there's a nest egg, if you will, a buffer or padding that allows, far more flexibility on how to use those funds for the improvement of those physical assets. [00:09:02] So the first part of that is just performing the site inspection, converting those physical assets into usable data, right? So we'll document every aspect of, the pool as an example, right down to the pool pumps. Pool pumps and pool plaster and the pool deck and the pool cover. I mean, there's a dozen components that maintain what we would, you and I would just call a pool, right? Yeah, there's a dozen components that would maintain that. We break those down, they all get a useful life. We convert that into data that has a useful life, a term for its expiration, and then a cost associated with that. In the process of that, we're contacting vendors, usually local vendors to that state or maybe that destination stop that town and city. So that we're finding out the local pricing and we plug that in commensurate to, their actual costs. And then we produce what we call a reserve study. [00:09:55] And it's a lengthy report. It'd be a hundred page report. Half of that is usually a very detailed page over page breakdown of every component, what we discovered, what our actual site inspection uncovered. And oftentimes we uncover problems that they don't, and sometimes that their management or their maintenance men don't see. Their maintenance men have a tendency to look at certain high visual items where we're in the process of discovering from a construction standpoint. What are the forthcoming or future problems that they might incur? A great but terrible example, and this has brought the whole industry kind of forefront. Everybody at this point has heard about the Florida condo that literally fell, and it was a horrible tragedy. You've heard of that? [00:10:38] Jason: I didn't hear that. [00:10:39] Aaron: You didn't hear about that? All right. [00:10:41] Jason: No. So when I was in Mexico and there was a hotel, or like a condo building next to one of the resorts we stayed at, and it won all these awards for design, but it like started sinking and collapsing. [00:10:52] Aaron: Oh yeah that's a different one. So, so this Florida compound really a preventable tragedy and a terrible tragedy. So this had a pool on an upper deck. So it was like a parking garage and imagined large concrete with rebar columns underneath upholding that pool and the structure above it. And over the course of probably decades, there was corrosion from the pool. Now pool chemicals are just brutal on everything that they touch right, even the concrete. And over time they noticed some corroding that had leaked into cracks and fissures in the concrete and had corroded, the rebar, which is kind of the structural integrity of the columns themselves. Long story short is they didn't have the funds or reserves, right. They didn't have the savings, just interchangeable word with reserves. They didn't have the reserves to fund repairs. And after decades of that type of corrosion, the columns gave way and the whole pool inside of the structure gave. And once the structure started to give, it was a cascading effect. And multiple stories of this condo complex fell and killed people, and it was just a horrible, preventable-- [00:12:05] Jason: wow. [00:12:06] Aaron: --Problem. Now that's about as dramatic as these circumstances get mind you. Right. Most of the time what we see is we see, gutters, for example, that are leaking off into the the wall and we know the cues and the primers that are kind of indicating that there's probably a leak behind the stucco itself. Right. Stucco's a permeable material. Yeah. But if it gets beyond the paper, behind the stucco, then you have wall issues and we see that. Pretty often where rain gutters are not skirting all of the snow, ice, and rain away from the building. So all of that's preventable If number one, there's funds to do it and if number two, there's eyes that can pick it up. So we help discover both of those. We help outline, highlight those potential problems and sometimes those problems in live. And then we help ensure that they have a plan of how and when those funds will occur in order to maintain and replace and repair all of those assets. [00:13:07] Ultimately the purpose of any property is to maintain and increase the value of that property, right? No investor wants to get in... [00:13:15] Jason: yeah. [00:13:15] Aaron: ...and not come out on the back end, however many years that might be, and not earn a profit at some level or another, either from the sale of the property or for the ongoing rental of the property. And that can only occur if you're maintaining the property in a condition that it can do so, in my opinion, in optimal condition. [00:13:33] Jason: So one of the things that comes to mind, so my wife and I like taking trips to Mexico and we've gone to some resorts in Mexico that have been around a long time, like decades. Yeah. And we didn't realize it because the rooms seemed new, the paint, but we saw maintenance people on this building. All day long, every day there were just people doing the grounds, doing painting, like everything. And it looked great. And then we just took a trip to Puerto Rico and we stayed at this modern kind of new sort of looking resort. I don't know how long it's been around, but it's already has rust coming down the white sides of the building from the top. They had some nets to capture, I don't know, maybe bird stuff or, I have no idea. Yeah. But they were torn and the room was mildewey and like, it just wasn't what it looked like in the pictures. It was just starting to show some wear and tear, and we were just kind of like, why don't they maintain it? Which was interesting. [00:14:27] Aaron: Well, and this is the second piece of what we do, the consulting piece of this because we have conversations like this all the time. 'Well, I've got this property that behaves very differently than this property. Right? And how do we appropriate these funds commensurate to the type of building?' It really is dependent on the purpose. Like people, not any property is really identical. They're not used the same way. They're not used the same frequency. Yeah. They're not in the same climate zone, et cetera, et cetera. And I think of a similar building that you just described in Montana. So we did recently did a site inspection on this architecturally really fascinating building. And they kind of jammed it into the corner of two main intersections. Okay. And the whole building architecturally is steel. It's intentionally rusting, and it's intentionally that way to keep the maintenance low. That steel on the outside will outlive all of us. And so the maintenance won't be going into the exterior of this building. It was designed for a very low maintenance exterior. Now, the interior finishes are different. The interior, it's got this high end deck and you've got this neat garden area and, you get into the inside, it's got this, really nice elevator and all of these things require a high level of maintenance in order to keep functionality optimal for that particular property. [00:15:42] We do some properties for investors that really intentionally just want to strip out and, for lack of a better term, it sounds bad the way I say it, but, we treat it a little bit differently. They want to strip out every dollar that they can because it's just not a high valued property to them, wherever it might be or however they might be using it. In which case we can put together a plan that. Creates basically what we call a baseline funding. It's a zero funding. It's just setting aside just enough to fund the needed maintenance to meet those financial goals. Again, being very intentional, right? I think most investors and executors fail when you have multiple properties and they start using funds from other properties to carry another or they're not intentional about the monies they're setting aside for maintenance. [00:16:29] Jason: So let me ask a question. So I recently bought a house. I'm here in it right now. Right? And it's over a decade old and we had a home inspection and most people connected to real estate are very familiar with a home inspection. How does a reserve study differ from a home inspection, maybe on like a single family residential property? [00:16:51] Aaron: Yeah, I'll be real candid with you, Jason. I think that the home inspection is very similar. Matter of fact, I have seen some really great home inspections where they will outline potential problems, right? That's the difference between maybe a typical inspector and a home inspector. An inspector might come in and they're going to say, 'okay, these are the things you need to do. These are the things that are really obvious.' A home inspector has a tendency like we do, to really get their hands dirty. They're looking for the little primers, the little cues that indicate that you have a leaking water heater, that the roof shingles are coming up on the ends and, stuff like that. And so I've been really impressed with some home inspections. The only real difference is taking that home inspection and converting it into datas, dollars, and timelines. So that's the difference. So when bought your home, you get a home inspection and it's left to you, buyer, to say, 'okay, well how do I feel about the fact that there's this, that and the other?' And you have to figure out a way to now negotiate that home inspection with your seller on what it means to you. What's the financial, consequence of that home inspection? We take it a pretty major step, but one step further where we say, 'okay, how long is that problem going to endure? When does it need to be replaced? And how much is it going to cost?' And then we build a report that actually puts numbers, dollars, and timelines to that. There's no more guesswork. The math now has a voice. [00:18:17] Jason: Got it. Got it. Okay, cool. Now I can see how this would be useful for rental properties, which are not just a home to live in, but they are a long-term investment and they're basically, each property is a business and it needs to be able to be maintained. It needs to run well, especially if their goal is to have it accrue in value over time, or for it to be making them a certain amount of money each month. Et cetera. So, okay. [00:18:47] Aaron: Now there's two pieces of that though, right? All right, so you've got, I mentioned in the beginning that you've got this kind of physical aspect the site inspection and then the data, and the vast majority, mind you, we don't shy away from data, but we also know how to read it. So when we produce a report, it's usually a lot to digest. And the second piece of that is, well, now what do we do with this data? How do I actually use this data and apply, and this kind of gets into the human element. So this is where it speaks to my psych degree, my salesmanship, if you will, which I just really love people. I think as much as we love properties and I do people, it's really what makes everything work. So now you've got to know, well, how do we take this data? And apply it to a property and in some cases apply it to manage the owner themselves. I'm not a hundred percent clear on your audience, for example. But if we just take a property manager that's managing to an investor, and I've been, in this circumstance, I've been that property manager managing to a CEO of a home builder that had multiple properties we were managing and they have certain expectations and sometimes those expectations are based on their feel, their gut feel. [00:19:59] And it was always better to manage that executor, that owner, that CEO with actual math, with the actual numbers where I can push back without it being a gut feel on my end. So I have what I call the LIL effect, like coin that myself, LIL, like little, the little effect. So one thing that property managers incur too much is blame. When there's stressors, when there's misunderstanding, when maybe the profitability is not there. Yeah. Property managers inadvertently end up being the scapegoat for owners that have left the management to the property, but shouldn't be leaving maybe the profitability to the property manager. Right? So we have what we call the LIL effect. So, and the LIL effect simply is the first L is listen more to your clients. You'd be shocked Jason. How often as a vendor... so I'm usually brought in as kind of a vendor to augment what the property manager might be doing for the owner. And you'd be surprised how many times the vendor or the owner may call and want some specific details that the property manager, doesn't know or is fine deferring to us because we do some consulting. [00:21:14] And then they open up about all sorts of problems and complaints and I'm constantly on the defence. I want to focus on the data and, not necessarily the complaints, but I'm a fly on the wall all the time. And one of the biggest complaints is that they're I think is that they're just not being heard enough. So property managers do a great job managing properties, but sometimes there's a pivot point that they miss with their owners, their clients, their executors. And so the first L is just listening more to the client. The 'I' that we have in the LIL effect is Intention, so being very intentional about building trust. I know a lot of property managers that are really good in the industry because they just, are honest and they just naturally build trust. But if they're not intentional, they leave so much of that trust on the table and they can build a lot of trust by being intentional. So the first L is for listening more to your clients. The 'I' is for intentionally building trust. In fact, an interesting story to go along with that. When I worked for a builder I was told at the very outset that there was an architect, very difficult to work with. We'll call him Brian. And Brian was impossible. [00:22:26] Brian did things his way and he was just difficult to work with. He was the head architect, so everything had to run through him, and if you couldn't get it through him, you couldn't get it done. And I had to get stuff done through him as a fairly new employee with this builder. And I determined right in the beginning that I would figure out a way to earn his trust. And I decided early on that I would just believe everything Brian told me. I would just take it at face value, trust, the fact that he knew what he was doing. Now everybody knew that he was emotionally driven, right? And a fascinating thing came out of this, Jason, I learned over the course of, less than a year, took some time, but I learned over the course o of that year that number one, I earned Brian's trust by hearing him out, asking questions strategically, and being very intentional about building that trust. The other thing that actually was quite fascinating to me is that I learned to really respect Brian. I gained a relationship with him and I could get things done through Brian that nobody else could, simply because I'd been intentional and at the time it was kind of accidental intention. Yeah. And it was a phenomenal relationship that he and I had. He was pretty rough around the edges, had his way, but I had, I could bend his ear, unlike most people could because I'd spent a significant amount of time building that trust. [00:23:48] Jason: That's interesting. I had a job working at HP and there were two of us on a team. We managed this software called Concentra, which was this workflow for all of their PDFs and documents for all their computers, printers, at everything to move through to make sure that there was some sort of quality. And it, it went through legal and it went through everything else. And so there were us two nerds and our boss was in, we were in Boise and our boss was in Texas. And I noticed he didn't trust us. He was always like trying to micromanage us and distrustful of us, and so I just started setting-- we used an instant message tool to communicate most of the time, so I just started changing my status. I'm like, how can I make him feel safer and trust me? So I had the intention. To build trust. And so, and the way I did that is I just communicated through my messenger status, showing what I was working on all the time, so he didn't have to ask me and say, 'Hey, did you guys doing stuff? Or what are you doing?' It just said, 'I'm working on this and I'm working on that'. And I would just update it throughout the day. He started to trust me and then he started to ask me about my coworker, what's he doing? Is he getting stuff done? I thought that was really funny. Yeah. Like acting like he'd-- this guy like didn't even know our names though. He like, eventually he just couldn't even remember our names, which is sad. [00:25:02] Aaron: But that level of transparency, solves all so many problems before they occur. [00:25:07] Jason: Yeah. So I like that. Yeah. Property managers need to listen more to their clients and they need to focus on the intention of building trust because really, I tell my clients sales and deals happen at the speed of trust. Yeah. In order to get clients, but keeping clients. Same thing, retaining a client, you're continually selling them on why they should be with you. It involves trust. Yeah. Trust goes, they go. [00:25:33] Aaron: It does. And it really is about being intentional, right? Because again, I know property managers who are quite good at it, but they're, there's a difference with being intentional. Yeah. Being strategic. [00:25:44] Jason: Yeah. because if their intention is just to do their job, that's not going to necessarily create trust. But if their intention is to create trust, then they're far more likely to do it. Yeah. This is interesting too becausewe have a tool we use with our clients so they can get more out of their day and we call it DoorGrow's Daily Planning. We have this daily planning exercise, and the goal is to map out, part of the daily planning exercise is to figure out what are all the appointments you have for the day, and then what intention do you have for each of those? Because we find just by having an intention and being clear on what your intention is with a particular outcome, you're far more likely to get the result ironically. So, if your intention is to go into a conversation and win, or create a win-win or to benefit them or whatever, you're far more likely if you're clear on that intention, then you just go into it and go, 'well, I have a meeting.' Right. Yeah. So, yeah. [00:26:36] Aaron: Well, I couldn't agree with you more. It's so we've got listen more to the clients, right? So to finish the LIL effect, intentionally build trust. And the last one, Is really one of the most undervalued, and that's, listen to your trades. And I'm not talking about just hearing them out, I'm talking about like understanding, understanding their perspective. You'd be shocked how many, so I talk to trades a lot. [00:27:00] Jason: Define trades. Are you talking about vendors that'll do work on property? [00:27:03] Aaron: Yes. Yeah. Yeah. Your concrete guys, your maintenance guy. The, these are invaluable people that, sometimes I think property managers don't reach out to these trades. At the level they could because they see a guy that, you know, just for lack of a better term, just eats concrete for breakfast. He knows concrete. He loves concrete, he's really good at it, and they want him to solve a problem concrete related. But I can't tell you how many times I've talked to vendors, I'm usually gathering price and I can speak their language and I know all things construction from the ground up. So I can get into those conversations and as I do that, I've been shocked. At how many things they keep close to the chest because they've learned, and this goes back to kind of the psych days learned helplessness. They've learned that nobody really wants their opinion. They just want them to solve a problem. 'Solve this concrete problem, fix this tree,' whatever it might be. And so they have learned over the years to just keep those things close to the chest. But what they have close to the chest is often little golden nuggets of understanding of both property and profitability. They have ideas on how to turn a property more profitable in their little, bucket of trade, right? They're concrete or they're trees and, property managers are leaving some profits on the table, in my opinion, because they're not getting those vendors, not building the trust with those vendors to glean the little pieces and it goes back to, I forget the name of the book, 1% Better, where if you're gathering 1% better and you talk to 15 different, vendors and they all can provide you, you know even half a percent profitability better, suddenly you have a property that's 7% more profitable. That's incredible. [00:28:46] Jason: Yeah. That's interesting. The last place I was in, we were renting and it wasn't managed by a property manager and the owner took two weeks to replace water heater because he was just being super anal and trying to figure out the best one. Basically a problem property managers can solve for people. And one of the plumbers came out and. He like was badmouthing the owner saying that he was being cheap and then he like, but the level of detail this guy was because I was just curious in asking questions because that's just my nature. He was telling me like, 'these type of water heaters, they last this long, this other one's going to go out soon. And if we put in one like this, I recommend it be this capacity because it's going to last this much longer or do this' like the level of detail he knew about water heaters. Brands of water heaters and how much, putting the right one in and what it could save you in the long term and doing the long term. I was like really impressed. Yeah, so this rings very true to me. Everybody that is really an expert in their craft. And this guy ran his company, so we were lucky that he was the one that came out, I guess. The level of expertise that some of these vendors or trades, or not sure they call them tradies, yeah. That they have is really yeah, it, I can see how it could be a huge asset. [00:30:04] Aaron: Huge asset. So that's the LIL effect. They really are a huge asset. So you've got, listen more to your clients, the intentional of building trust, and listening to your trades and vendors and anyway, that LIL effect will produce positive consequences every day of the week. There's really no negative and it's kind of rare that you can apply a strategy and not have, some downside of it. But it's pretty easy to apply. Maybe a more listening and intentional ear. Yeah. Something that we're noticing, that kind of goes along with this, and I think everybody's probably feeling this at this point. I've been waiting for everybody to feel like the pinch of what's going on, right. So, one thing that we're trying to do here for our business is just constantly be on the pivot where, well, what are our clients feeling? Yeah. What are they experiencing? What are their hardships and challenges? What other problems can we solve? And we've been doing that since inception, but I've been waiting since kind of some of the overall damage from where it started with Covid. When is this downstream damage going to really start affecting just masses, right? And profitability and properties and so forth? And over the last four to six months we're seeing more of it. And on our end, we're ready for that pivot. And what that pivot looks like is when people are pinched financially and emotionally. And additionally, right now politically, when people feel pinched in corner like this, yeah they have a tendency to retreat into corners, right? It's the old adage, that we retreat into our shell. And as people do that, unfortunately trades and property managers, when they're feeling kind of this trifecta of pinch, they have a lack of control. This goes back to the psychology. They have a lack of control. So what do people do when they're losing control of one thing? They go and gain control of another, right? [00:31:51] Jason: Yeah. They start micromanaging other stuff. [00:31:54] Aaron: Yes. And asking all the wrong questions in that micromanagement, right? And so they start micromanaging, they start trying to regain control. And I see sometimes property managers pushing back because again, the client's asking the wrong group of questions, seeking for some semblance of balance of control. And as they push back, then they're usually again scapegoated into some failure, some misunderstanding, some reason that the client needs to retake or re grab control. Yeah. And when they're insecure and out of control, we often coach our clients to tell them, 'look, let them. Give them a moment. They don't want to drive the car. They don't really want to drive the car. Yeah. They want to know that they can drive the car.' Right. And so clients come, they feel uncomfortable, they want to regain control. And so we'll tell our property managers many times, ' let them sit in the driver's seat. It's like taking a teen, and you remember the old driving the cars, they had a brake pedal in the passenger seat where the instructor could sit and slam on the brakes and-- [00:33:04] Jason: Yeah. [00:33:04] Aaron: --Scare the teen right out of his gourd. I mean, that's how I learned to drive from a instructor. But it's kind of-- [00:33:10] Jason: sounds like a mean instructor. [00:33:12] It's sometimes though it's like that the property [00:33:14] Aaron: manager would be wise to step aside for a moment and let them get in. Actually a lot like you did with, telegraphing. Almost over transparency. This is what I'm doing, this is what I'm doing. Let them see how you're driving. Let them see every turn you're making. And eventually they get to a point where they're like, yeah, he's driving fine. I don't, they don't want to drive. And property managers hold that close to the chest. I can't let them get in. I can't let them, do X, Y, and Z because that's my job. That's my responsibility. And they guard that tenaciously and that actually leads to more distrust in the moment than trust. [00:33:48] Yeah, I actually [00:33:49] Jason: teach. And I've had a podcast episode on this subject before, but I actually teach clients that the one thing that people want to buy from a property manager is not property management. What they want to buy is safety and certainty. Yeah. They want to buy peace of mind. That's really what you're selling as a property manager. And so if you're not using LIL and that framework, And you're not going to get those positive consequences. And if you're not making them feel safe, you're actually going to have a higher operational cost in your business because you're going to have a whole bunch of owners that are micromanaging you because yes, if they don't feel safe, they're going to create safety. Yes. In the form of leading and micromanaging you. And if the only positive way to push back on that is to let them know that you know what you're doing to showcase the expertise and let them know that you are better at this than them. Yes. Based on proven history and results. Yes. [00:34:44] Aaron: I, that is such a great point, Jason. Matter of fact, that's really, really kind of the key, if they'll filter everything through what you just said, if they'll filter everything through this idea. Building that trust and managing that relationship that way and not the property. The property's easy to manage. People are tough to manage. True. And if you'll manage to those, like you said, those, those expectations with their end goal then you can manage the property kind of on, on the side. In fact, it's interesting. I would also say that anytime, That they see Anytime that, our clients see micromanagement from their clientele, that should be the first cue that they're on their way out. Yeah. You know that they're, they don't trust you, that they're not trusting and that eight, eight out of 10 times 80% of the time, I would say that when you have an owner or property manager or an executive body that's frustrated or micromanaging they don't know it yet sometimes, but they're already beginning the process of finding somebody who they feel that can do a better job and they never do. [00:35:50] They only find somebody to solve a problem for a minute. But the problem is really, like you said, trust, expectation, those relationships, because the property is not the challenge. [00:36:01] Jason: Yeah. I mean, there might be one counter to this. So one thing that's I think is really interesting is we'll have clients in our coaching program and sometimes they're just like grumpy and they complain about everything and they're frustrated, but they stay. And then sometimes they're really happy and they're getting great results and then they leave. And so what we've learned to pay attention to, In the realm of client success is that it's not even necessarily connected to whether or not they are happy or you're getting them great results or not. Which is really weird, but client retention is based on whether or not they still see a future with you or not. And that there's a future plan. And so as long as they have a future goal, a future roadmap, they might be miserable as they do all of it, but they'll still stick with you because they see a future that includes you, and so they'll stay with you, but it's very easy for them to start creating a new future the second they start not having a good experience with you, they start to imagine, man, it might be better with somebody else. Yeah. [00:37:00] Aaron: And with that, you can't discount the 80 20 rule either, right? There's a, there's the law of averages and statistically speaking, it's been proven, a thousand times that. 20% of your clientele is going to be 80% of your time expenditure. Right. [00:37:13] Jason: Which is why you should probably fire 20% of your clients. [00:37:17] Aaron: I knew you were going to say that. I set you up, Jason. I knew you were going to say that. I the truth is I've actually watched property managers do that very thing and they just end up with the different 20%. Right? Right. Yeah. So better, the better way to do it is if you're going to fire, because I don't think. I don't think the idea is lost. I think you got to look at profitability and Yeah. Which ones are really not making you money, right? And those are the ones to let go because you're going to end up with the same 20% of kind of high maintenance clientele. And if they're profitable, then maintain it. And if they're not, then call it and get to the 20% of higher profitability clients. Right. That's again, coming back to intention. [00:37:58] Jason: I would agree related, if you're focused just on the currency of cash, but if you're focused on the currency of like your peace of mind and time and other things, then it might not be worth it. [00:38:10] Aaron: Some. That's a great point. That's so true. [00:38:12] Jason: So it might not be worth it because it really, the goal of a business isn't just money. The goal of a business is to give us more freedom, more fulfillment as a business owner, more of a sense of contribution and more support. That's why we build a business, why we build a team. And so some owners are stealing that from people, and I think a lot of times it's easily solved by just setting really good boundaries, expectations. And like you were talking about communication. Yeah. And that most owners, when they're micromanaging like that, they just want to know you're actually holding the steering wheel. That's it. As soon as they recognize that, they're like, oh, okay, I'm fine. And so a lot of times it's just a matter of being stronger towards them. Like some of my clients, I teach them to say, 'No, Mr. Owner, we're not going to do that and here's why.' And then suddenly that owner disarms. But a lot of times if they say, okay, I'll do that for you, the owner then goes, 'oh, I now need to lead them through everything to get the results that I want.' [00:39:08] Aaron: Yeah. Yeah. So that's great. [00:39:12] Jason: Interesting stuff. All right, so, now a lot a lot of my clients are managing small multi-family units, single family residential, maybe some condos. There might be some association management. When does it make sense to reach out to North Star? [00:39:28] Aaron: When they want to use and empower the actual math is what I call it, when they want to use and empower the actual revenue versus expense load for decision making processes. Okay. It's really, there's a balance between the revenue and the expense load, and in almost all cases, the expense load is higher. So when I call it a balance, it's not like it's an equal balance. The expense load over time is higher when you factor in the revenue with profitability, et cetera. So how do we empower the math to make decisions based on the actual dollars and cents and not just aesthetics? [00:40:08] Jason: Okay, so let's take an example. Should they reach out to North Star if they have an owner that they can tell is not doing things mathematically effectively so that they can actually leverage your data in insight to say to this owner, you're being an idiot. You need to do it this way. Is that a good case example. [00:40:28] Aaron: It's a great example. In fact, in downtown Boise there's a highrise, I won't mention it. And very nice, very, kind of high end highrise. And the property manager called us, this is actually just a couple years ago, but I still play this one out because it changed everything. And they were ready to spend $50,000 just on a furniture rehab. And long story short is the furniture was already nice. I mean, high end from the lobby to the rooftop. And in the end we ran through reserve study, helped them see that a $50,000 was not only not in the budget, but a gross overspend. They still spent 15 grand, but that other 35 went to a future roof project that they were not only not prepared for, but didn't have properly funded. So the answer is yes, to I would say anytime that a property manager wants to help mitigate or remove the emotion from the pushback that they might get with their owners or executive body and using the math to make those financial decisions, that's an appropriate time to call North Star. Another great aspect of having a reserve study and having the proper financial is creating continuity. So once you start that decision making process, owners and property managers get really good at creating continuity for that decision making process, and that reduces the time expenditure on a property that reduces the discussion, meeting time, expenditure with their owners. And so we call it continuity. In fact, we have a continuity program, which is really a consulting program that we use the existing study to take them through a year long process of decision making and preparation where we are basically on retainer by the course of the year to interact and help create that continuity. Directly, it's actually always designed for the property manager. So that's create continuity for the property manager to use the financials to manage those long-term decisions. [00:42:20] Jason: So I imagine another use case would be they're about to take on a rough property and I get questions like this, should I take it on? Yeah. I mean, often the answer is no. But if the owner is amenable to like fixing it up, making the changes necessary, but a lot of times there's a lot of emotion in it for them. Yeah. And so if they can connect them to the math and to reality through something like working with North Star then, and they're willing to do this, then they could end up being a good client and it could be a good scenario. [00:42:51] Aaron: That's correct. And we resist all things boiler plate, right? We like to tailor it to the real circumstance. We do use some boiler plate numbers to help owners get to a basic understanding of profitability and whether or not to buy a property. More often than not, Jason the questions usually: I want to make an improvement on an existing property, and should I? What's the downstream cost and the downstream cost of maintaining that improvement? Yeah. Right. We want to resurface the streets and, or we want to we want to add in a bar to this, to this, mini restaurant or a bar area. And so you, we've got to look at, where the cost expenditure is and the long-term maintenance of that improvement. [00:43:33] Jason: I would imagine that property managers, if they've even done a few of these situations or scenarios with you, learn an immense amount of insight and knowledge just by through association with what you're doing. [00:43:48] Aaron: Yes. In fact, that's, I didn't start this business doing the consulting side of this. I started with just, reserve studies, right? We just produce a reserve study, we produce the math, and it's my nature to kind of help people through that. And I don't push back on people with meeting and the time expense of meeting. [00:44:05] I help them through it. But that has evolved over years into really a full consulting program because you're exactly right, property managers when they really know how to use it They need less of my expertise on the reserve study and more of my expertise on using the reserve study to manage again, people right, to manage expectations of people, to manage tough conversations with people. Property managers have more longevity in managing a property. I find when one, they have that trust, and two, they do have some profitability because you're right, it is about those people. But their investors want to see good financials. And when the property manager can focus on intentional trust while at the same time producing transparent and profitable financials, I mean, I don't know why anybody would want to leave a property manager that is performing at that level. [00:45:00] Jason: Yeah. So I think the next question somebody would have is, this has to be really expensive. Would it make sense? Like say I get an investor and he's got like, a hundred unit building, or I get a different investor and he's got a hundred single family units and I'm going to bring in this portfolio. Is this something that. Is financially going to make sense? Is there a way for this property manager to convince the owner to do this, and for the property manager to be able to afford to do this in a way that it's going to make them money? [00:45:32] Aaron: Yeah. In a very rare circumstance, has it not really and I'm just being very candid, in a very rare circumstance, has it not financially made sense. In fact, in 2019, and it just happened to be a good timing in late 2019, we created what we call a virtual site inspection for those properties were financially, they just don't maybe have the volume of assets to merit a 30 year full reserve study in the consulting. Yeah. And and so we do a virtual site inspection, which is a little bit more boiler plate, but we'll go on. As long as I have satellite images, I'll do a virtual site inspection from satellite imagery. I can usually get some really great street view images and I can build a reserve study without ever leaving the office. We have staff here and I've got one guy and that's all he does. He just looks at those virtual studies. He builds these virtual studies so we don't ever have to mobilize. We did that because that got the price, the mobilization costs down and therefore it got the price of the reserve study commensurate to producing well, just a profitable report, so it didn't make sense. Yeah, it's not cheap to to, again, to be candid with you, there's a lot that goes into it. Sure. On a high rise, we might have, 80 hours into a full study with the site inspection and all the data gathering. So it's generally not cheap. And so we do try to find balance in that. [00:46:49] Jason: Got it. Well, this is interesting. I think we've gotten a lot of info from you. I appreciate you being here on the show. [00:46:57] For those that are curious or interested in maybe doing their first, reserve study or in connecting with you, how can they get ahold of north Star Reserve? [00:47:10] Aaron: Well, for your customers and clients, Jason, I'd give my personal information out. So they can contact me directly at aaron@northstarreserves.com. [00:47:21] aaron@northstarreserves.com, all spelled out northstarreserves.com is our website. They can call our office at (208) 365-0977 and we'd be happy to help out, put a quote. I don't charge for any upfront consulting. We'll take anybody through their property, their needs just to make sense and vet out whether or not it even makes sense. And I I feel that's just ought to be industry standard, and help people make sure it makes sense in the first place. Right. [00:47:52] Jason: Awesome. Well then hopefully everybody reaches out. Right? I appreciate you. All right, awesome. Well, we appreciate you being on the show, Aaron. This was really insightful and yeah, I'm really, I'm going to be curious to see how this could help benefit some of our clients as well. So thanks for coming on. [00:48:09] Aaron: Yeah, thank you. Appreciate you, Jason. All right, so check out northstarreserves.com. Now, if you are a property management entrepreneur and you are wanting to grow your business, add doors, reach out to DoorGrow. We can help you do this if you're wanting to scale your operations, you just feel like you're banging your head against the wall. You're frustrated. You're trying to deal with all these different tools and software and trying to figure out what's the best way to scale my business. And to make a business that's infinitely scalable? You're going to need a lot of systems. And we've developed what we call the Super System. So you're going to need a people system for hiring and vetting candidates. You're going to need a system for operations in an operating system for planning that motivates your team instead of it's top down pushing your team all the time. We have DoorGrow OS. We have DoorGrow Hiring. You're going to need a system for documenting processes. We have DoorGrow Flow, which is a flow chart based software for mapping out processes and having your team run processes through. So if you're wanting to grow your property management and you're wanting to scale it, you're wanting to get a really good coaching for your operator or operations person. You're wanting to get really good coaching for your BDM or your salesperson to grow and scale and add doors. We are the best at this, so reach out to my team. We have a plethora of coaches and resources. [00:49:32] We've been doing this for over a decade. We love growing and scaling property management companies, and we know that we can help you. If you're willing to just do what we tell you to do, so reach out to DoorGrow. We would love to help you out. And if you want to test just something, test your website, go to DoorGrow.com/quiz test your property management website and see how effective it is. Usually this is enough to get people to wake up and go, 'Hey, I've got some leaks in my business people.' So most of you have leaky websites that you've gotten from people that are not DoorGrow, and your website is leaking you leads, deals, and money every single week. You could potentially be getting twice as many leads in deals if you're scoring an A on this DoorGrow Quiz. But most are scoring a D, C, or sometimes an F, right? So take this quiz, check it out, DoorGrow.com/quiz and grade your website. And that's it for today. Until next time to our mutual growth. Bye everyone. [00:50:30] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow! [00:50:57] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Has anyone ever told you that you need to implement more humor to grow and improve your property management business? Well today, property management growth experts, Jason and Sarah Hull are going to share why humor is an important tool when getting prospects to trust you and choose you over other management companies.  You’ll Learn… [01:26] Why we use humor to create trust [05:44] Mistakes happen… even in business [10:26] How humor and teasing can build rapport [13:45] How humor can be a sign of intelligence Tweetables “A lot of times, we take ourselves too seriously, and so we act too serious in our business, and when we're too serious, people are less likely to trust us.” “You have to be willing to not always look perfect.” “Even the best, smartest, fastest learning companies and people, they still make mistakes.” “It's okay to make mistakes because it happens to everyone, and it's okay also to ask people for grace.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: Humor really is a sign of intelligence. The more intelligent somebody is, the more they can think on their feet and be witty and create jokes and add humor into the conversation. So I've always viewed humor as a sign of intelligence.  [00:00:16] All right. Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You realize that they're the ones that are crazy because they're not, because you realize that property management is the ultimate high trusts, gateway to real estate deals, relationships, and residual income. [00:00:56] At DoorGrow, we are on a mission to transform the property management industry. We want to change the industry. We want to transform property management business owners and their businesses. We want to eliminate the bs. We want to change the perception. We want to 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. All right, so I sort of adlibbed that a little bit. I kind of messed up my intro a little bit.  [00:01:26] All right, everybody. So I want to talk about humor. I want to talk about being funny, and a lot of times we take ourselves too serious, too seriously, and so we act too serious in our business and the when we're too serious, people are less likely to trust us. So you have to be willing to not always look perfect. Like I've made mistakes in business and some of the best ways I can close people and convince people to trust us is I get transparent and real and raw and share some of the challenges I've had in business. That allows people to open up and share as well, and it builds this bridge and this relationship of trust. And you've heard me say before, sales and deals happen at the speed of trust, right? And if they trust you and they know you, and they like you, they're going to work with you. So what I want to talk about is humor. [00:02:22] And so you may have noticed, if you're following us on YouTube, we've put out some funny videos. So, one of them is called Profit Martian and makes fun of the idea of maybe a property manager not having enough profitability in their business and you'll see Sarah, my wife and I, just being really silly around that and it's pretty funny. And then you may laugh, so I recommend you go search for Profit Martian. You can add DoorGrow and you should find it and have a good laugh. The other video we made recently is Not move in ready and you'll see me at the beginning yelling, "not move in ready!" Right? "This is not move ready." So check that out. Sarah and I made a humorous video showing a couple that decides to kind of manage the property themselves and all the stupid mistakes that we make. She's suggested I get a property manager and I was like, "ah, I don't need that. I can do it myself." Right? So check that out. That's funny as well. We actually just recorded our third video, which is going to be about all the reasons why you might not meet a property manager. [00:03:27] And it shows me doing some really uncomfortable things and challenging things and pretending that I like doing the property management stuff, acting as an owner that's doing it myself instead of using a property manager. And I think the working title is 13 Reasons Why You Might Not Need a Property Manager cause we had like 13 different instances. So you'll see me running from a dog when I'm supposed to be doing an inspection and, stuff like this. So, they get pretty ridiculous. What it does is we've already gotten feedback from some clients that signed up because they saw some of these videos because they say it shows our personality, which is true. And it shows that we are real humans, which is true. We're real humans. And it shows that we understand the industry. Like, you can't make funny memes and humor and stuff related to property management unless you kind of understand it, right? And so it showcases a level of expertise just in that we understand it well enough to make some jokes about it. [00:04:27] And so I recommend that you be sure or remember to add a little humor into your sales process. Add a little bit of humor into your interactions. Be willing to laugh and joke about yourself. Shows a lot of vulnerability and confidence to showcase that you don't always have to look perfect. If you're always trying to maintain this look of perfection cause you think that's going to make people feel safe. It actually does the opposite. There's no real secrets or hiding. People know if you're trying to create this perception that everything's amazing in your business when it's not. And so you can say, "look we're not always perfect. We don't get it right all the time, but we care and we will make sure that we make it right." That's the kind of conversation you need to have because then they're going to go, "I can trust a business like that more than the businesses "Well, we maintain a high level quality service and we blah, blah" and use a lot of business speak and try and look perfect all the time. They're going to go, "Hmm, I don't know this doesn't seem real to me. I don't know if we can really trust these people." Because it's not always about what you say. They can read body language. Some people are really intuitive. I think especially women, they're very intuitive about body language. They can pick up on things that you're not being honest on. [00:05:41] I don't know. Anything else you wanted to add to that? [00:05:44] Sarah: Oh now that I've been completely put on the spot, so I guess my take on that is I think just showing that you are human is really powerful. I think especially for me and other perfectionists out there, we want to present like this tidy, clean, perfect package, right? We're like, "oh, I do everything perfect, and I'm so wonderful all the time. And like, I never make mistakes. Some of it may be posturing for people, some of it may also just be like, you're afraid to fail. You're afraid to make a mistake. And I think, I had lived in this space for a very long time where I was scared to make a mistake because of the consequences. Right.  [00:06:24] Here's a perfect example. If you misjudge a tenant, right? And now you put the wrong tenant in, because some people look really great on paper. Yeah. And everything seems wonderful and you've met with them and you can just kind of, judge to the best of your ability. Like, "Hey, I think they would be a great fit." And then you move them in and then it's like, It switches and you go, "oh, wow, I was way off on that and I clearly misjudged" and things like that. [00:06:52] Sometimes it's unavoidable but I think just being able to say, "Hey, like I've done this, and then what did I learn from it?" Because you're going to make mistakes no matter what. Like, none of us are perfect. Some of us are really good at trying to be perfect all of the time, but even the best, smartest, fastest learning companies and people, they still make mistakes. And I think the thing about that is that you need to just realize, first of all, that it's okay to make mistakes because it happens to everyone. And it's okay also to ask people for grace. And I think that if you do ask, especially with clients or tenants or whatever it is, like, "hey, just understand, we're not perfect all of the time. We will try to make it right because occasionally we do mess up like we are human and we are humans that rely on technology. And technology is not perfect either." Right? So like when you automate things and you're like, "oh, this was supposed to happen and it didn't happen because something in the process broke somewhere." Yeah. Like it happens. But just asking for grace, realizing that you will make mistakes and that it's okay, and then the biggest thing you can do honestly, is just what did you learn from that? So things are going to break, things are going to go wrong. Somebody on your team or yourself, or a process or a software or something at some point... it's not going to work the way that you intended and things break down and mistakes will happen.  [00:08:25] And then when that happens, then all you can really do is like, you have to pivot. You have to be able to figure out what are you going to do to like, correct that as quickly and as neatly, I'd say as possible without a lot of blow back. But then what did you learn from the experience? Because if you don't learn anything from that and you don't say, "Hey, Maybe we can look at this in a different way. What can we do? Is there some sort of check and balance that we can put in place? Like how do we make sure that doesn't continue to happen, then it doesn't happen again? What did we learn from this experience? And if you don't do that, then the whole point I think is learning. And if you don't do that, then you're like you're missing out.  [00:09:05] Jason: Okay. So related to making mistakes and showcasing humor I didn't mention this, but what do we have at the end of each of our videos?  [00:09:15] Sarah: Oh, we have all the bloopers and I think the bloopers are so funny. I love them, but we, I mean, we all make mistakes, right? Yeah. Like, sometimes you forget, especially when you're like we've been recording these videos and. You forget your lines sometimes, or like, yeah, Jason in the last one, he's like, "oh, the camera has been rolling the whole time. I'm like, "UGH!" It's been just recording me, like moving things in the kitchen and like I'm standing there waiting for him to hit the record button. He's like, "oh, it's already recording." So I think if you can laugh at yourself, don't take yourself too seriously. And that for me has been huge because I am an INTJ. I am a perfectionist. I am the like, I need things to be the right way all the time and I don't have very much grace with myself and I don't have very much grace with other people. And that's something that I've been really working on I'd say over the last year or so is it can't always be perfect as much as I would love it to be, it's not realistic. It's not realistic to have a 100% success rate 100% of the time in 100% of the things that you do.  [00:10:24] Jason: Yeah. It's good stuff. It's been proven that when you tease other people or joke with other people, It assumes rapport. Is that right? You can't like tease somebody that you don't have a good relationship with because they'll just not like you, and it seems really harsh, but, we can tease each other a bit, which we do. But it's an intimate form of communication and that's a form of joking. So you can add some humor into your conversations. Lightly, maybe teasing or something that potential client, "oh what You must really be a glutton for punishment, you know that you are doing all this property management stuff," you could say to them, and I know because I do a lot of it, or something like that. But you can make jokes and that assumes rapport and actually creates rapport with people. It creates the perception of that being willing to joke and play around.  [00:11:13] Sarah: So, It's funny that you say that. I actually do that on my sales calls and I didn't even realize I did that until you just said it, so I'll do that, like when I'm talking with them and I'm, especially when they're self-managing or when they have somebody else managing, which is like 99% of the conversations we have, but yeah. Right. Like. I always ask like, "and how has that been going?" And it doesn't matter either if they already have a manager and they're looking for another one, it obviously isn't going well. If they're self-managing, it definitely isn't going well. Yeah, I don't really need a lot of information when they're self-managing. I already know they're in pain and I know they're probably not enjoying what they're doing. Very few people are like, I love all of this stuff. And that was the last video that we just did. But. I kind of will, as soon as they say something that really is like their pain point, right? [00:12:02] They're like, "oh yeah, like the, the tenants call me all the time, or, like, this tenant is late every single month. And like it's been going on too long and now they're behind three months and now I feel like I need to either get them to pay or evict them. And that's like painful for me. I don't want to be the bad guy or I don't know how to handle this legally. Like if I have to evict them, like I'm at that stage now and I have to evict them, but I don't know what I'm doing," and they don't say it exactly like that. But that's the, that's like the read between the lines message that you're getting. I'll kind of joke with them at that point. And they'll say, "oh yeah, sometimes like, tenants suck." And I just laugh and I'm like, "yeah, sometimes you're right. Sometimes tenants suck." And I know that is painful because we too have seen that and we too have dealt with that. And that's exactly why we have systems and processes in place. And sometimes it's not even that the tenant sucks, sometimes it's the tenant is amazing and then something changes in their life and now they suck. So, and that happens, right? It's called life. Like people lose their jobs, they lose their spouses relationships end. Hardships... they're just part of life. And sometimes that carries over into how they behave as a tenant. But I will, I'll kind of laugh like on the call and they'll say, "oh the building is completely vacant now because we had all these tenants in it and they didn't pay, so we got them all out." and I'm like, okay. So it's like all, it's all vacant. Yeah. And I'm like, "and I bet that's fun for you, right?" Like, and they're like, "oh yeah. It's like, it's horrible." But I didn't notice that I really did that until just now. [00:13:32] Jason: I think women do a lot of things intuitively. And I think there's a lot of things that people pick up when you do sales enough. Like you start to intuitively pick up things that work, especially once you're really comfortable doing it. So I think one of the things that I've noticed is that humor really is a sign of intelligence. The more intelligent somebody is, the more they can think on their feet and be witty and create jokes and add humor into the conversation. So I've always viewed humor as a sign of intelligence, and I've always viewed people having a sense of humor as a sign of, maybe intelligence or being more of a light in humanity. People that have no sense of humor, they're not willing to take jokes, they're not willing to joke. They're not super fun people to be around. And I think it shows us that when somebody knows the fine line of whether it's funny to somebody else or not, shows that you have that emotional quotient, you have that EQ intelligence and there's some emotional intelligence. And I think if you're able to be witty, it shows that iq, like you're able to piece ideas together and do something unexpected which is what humor's kind of based on. And people will see, okay, there's some intelligence behind this person. So, and I think that circles back to us making the videos, us being able to formulate an idea, know that we show that we know the industry. There's intelligence that goes into us putting together our scripts and what we're going to do in our videos and making it funny. And comedians I think are some of the most intelligent people out there. I love the observational humor. I love when they can see truth and things that don't make sense and it's ironic. So comedians really are able to showcase a high level of intelligence. They're able to piece things together and do things that people can't see coming. [00:15:16] And that's why punchlines are so funny. They're unexpected. Our brains get excited about that because it's different. It's unique and it's something we hadn't expected or heard of. And that's where humor becomes so funny to us and exciting because we didn't expect it. And it takes intelligence to be able to catch people off guard like that. So add a little bit of humor into your day and your day's just going to be a little bit more fun if you're laughing at some stuff and laughing with some people and laughing with people creates connection as well. Like if they laugh and you're laughing and like you, you can make jokes together. There's some bonding, I think that happens and really that creates more trust with clients. So, Anything else we should add?  [00:15:56] Sarah: Yeah I don't know what you started out with, but I feel good about that.  [00:16:00] Jason: Okay, cool. I'm glad you came and joined me.  [00:16:03] Sarah: That was a mistake. Wasn't planning on being on the podcast. [00:16:07] Jason: She just walks into my office. Making noise. She could see I'm on the video. [00:16:10] Sarah: I couldn't see you were on the video. No. His desk is against the wall and I can hear him. And he does a lot of voice message, so I always just assume he's either on a call or some sort of voice message on telegram. [00:16:21] Jason: All right. If any of you are struggling with growing your business, you're having trouble figuring out how to scale your operations, you're having difficulty with your team. We have rolled out what we call the DoorGrow Super System. It's the system of systems we put together the ultimate sort of package of operational stuff, planning stuff process stuff, hiring stuff, and we brought in expert coaches to facilitate all of this as well, because you know it's not the Jason show at DoorGrow anymore. We've got experts like Sarah and Clint Collins and Phil Mazer and Roya Mattis and Stacy Pittman, and like we've got the Avengers team of coaches, so if you really want to take your business to the next level and you want to grow faster and be less frustrated with your team, be able to have more jokes and have more fun and stop wearing all the hats you don't really enjoy wearing because you're the one screwing up your own business if you're wearing the hats you don't enjoy wearing and start just getting those all offloaded, we're really good at that.  [00:17:23] Like we can turn your business into something you love being in and you enjoy being in each day, and it will actually run better without you doing all that stuff. And so we can help you get to that next level, especially if you're 200 doors or higher. This is where all of this becomes really magical. And if you're below 200 doors and you're struggling to break even that a hundred door barrier, we can help you do that very easily. Adding doors is super easy. We can help you do it without spending any money on advertising. I know this sounds crazy, but we can actually help you grow faster without doing ads. And ads are expensive. And so if this is interesting to you and you're curious on our guerilla marketing strategies and how we can help you grow your business and get more leads, and get more doors and get better operations, reach out to DoorGrow and learn about our Mastermind. It's pretty awesome. And that's it. Check us out doorgrow.com and until next time, to our mutual growth. Bye everyone.  [00:18:21] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:18:48] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.  

One of the most complicated parts to navigate when you own a property management company is the different types of insurance and risk management you have to know and have.  Property management growth expert, Jason Hull brought on Calvin Roberts of Falcon Insurance to discuss everything you should know about insurance and risk management as a property manager.  You’ll Learn… [01:26] Introduction to Calvin and Falcon Insurance [05:46] Risk Management and Property Management [13:24] Holistic Risk Management Strategies [17:57] The Types of Insurance Coverage [25:25] Insurance Best Practices and Tips [29:56] Tenant Legal Liability Tweetables “It's the true risk management angle that I find to be sort of like chess. That's why I think it's interesting because one move counters another.” “It’s just making your rights known in the lease agreement that will hopefully alleviate the vast majority of instances like this before it could ever find its way to a courtroom.” “If you don't feel like you're progressing or moving forward in your business, you just might not have a big enough goal. So set your stake a little bit bigger, a little bit higher.” “I think cyber's a great idea for everyone. I carry cyber liability insurance on my own insurance policy for Falcon. It's fairly cheap, and it does add a lot of value.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] [00:00:00] Calvin: If you haven't gone through all of the building limits with your insurance broker over the last three years, and really over the last year, maybe two years, it's probably significantly underinsured. I read the statistic recently that over 75% of buildings-- commercial investment real estate-- are underinsured by 40% or more  [00:00:25] Jason Hull: All right. Welcome Doorgrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you're interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the bs, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder, and CEO of DoorGrow. Now let's get into the show.  [00:01:26] So my guest today who I'm hanging out with is Calvin Roberts of Falcon Insurance Agency. [00:01:34] So Calvin, welcome to the show. [00:01:37] Calvin: Awesome. Thank you once again for having me today. I appreciate the opportunity to speak with you and super excited.  [00:01:44] Jason Hull: Yeah, glad to have you. So, Calvin, give people a little bit of backstory on you. How did you get into insurance and how did you get into business in general and then we can chat more about insurance.  [00:02:01] Calvin: So I started off in retail property and casualty insurance. Very young. I was 19 years old. I knew I wanted to take immediate action to, you know, more or less accomplish the goals I had set out on achieving. And I had some family members who had a very successful career for themself with insurance. They weren't on the retail, sales insurance agency side of it. They were more working for the company directly, but I saw the effectiveness of insurance as a growth vehicle for, you know, achieving good, stable personal income and overall just view that as a very, a very fulfilling field if you're one of the few people that find risk management genuinely fascinating. So I began an Allstate office in Mid, Michigan in 2016. I was there for about two years and quickly realized I needed to go independent. I didn't like being locked down for just one company. So in 2018, after I, you know, got my feet wet and did a couple years there. I branched off and worked at indie agency and I was at that office for about two years further, and also quickly realized I needed to own my book of business, my contractual relationship with my clients. That's where, you know, the real scalability and effectiveness and retail insurance as being a personal financial driver came into play. So I split off right as Covid was kicking off April, 2020. I figured if there's any time to bite the bullet, restart from zero and you know, take it from the ground up once more, april, 2020 was not the worst time to go out for it, you know. [00:03:53] So I, you know, split off then worked 1099. I had a friend that had started a insurance agency at their own couple months before and was like, "Hey, Cal, why don't you come work for me?" And I said, sure, but I am going to eventually leave to form my own agency. So I pre-negotiated contractual ownership of my clients. That was something that was very important to me and worked under him to more or less build the foundation for eventually splitting off and forming Falcon. You know, it's kind of a chicken-egg scenario with retail insurance where you want insurance companies on day one to work with you when you form an agency, but it's hard to get them to work with you unless you have some type of existing clients and premium volume that you can bring to the table on day one. [00:04:47] Yeah. So during that period I worked to, you know, set my pieces up and build a impressive enough book of business to where I could attract insurance companies on my own. And then last January I left my friend's agency and formed Falcon. We're a national boutique commercial insurance brokerage. We are very forward thinking, licensed nationally, and we don't ever really lose on price, but where we really sell on is having a unique, holistic risk management, value add strategy for our multi-family operators. We bring $0 best practices, you know, tips and tricks to the table that many of our competitors just don't take the time to share with the operator. And that's really how we differentiate ourself is taking a bold, big picture approach to managing risk for a multi-family operation. [00:05:46] Jason Hull: Okay. So what about you makes you interested in risk management? This is not something that most people wake up and go, "man, I want to learn about that today." Right?  [00:05:55] Calvin: So I know, you know, every little kid growing up wakes up in the morning and thinks, "I want to be a insurance broker when I grow up." [00:06:03] Jason Hull: It's right up there with like firemen and working with animals like veterinarian.  [00:06:08] Calvin: I am one of those few insurance geeks that finds it legitimately fascinating. You know, it's not very hard to write an insurance policy. Most people can probably do it for their home and auto, online, and realistically even most small businesses. Most people can probably put that together for themselves. It's the true risk management angle that I find to be sort of like chess. That's why I think it's interesting because one move counters another, and it's all about just proactively working a flank, whoever might be seeking to cause financial harm to your organization. So I'll give an example. Most insurance policies exclude care, custody, and control liability. So that's liability arising from your guardianship of property. So where that would come into play on a multi-family operation would be the vehicles kept in the parking lot of one of your buildings or complexes. [00:07:08] Let's say you have a resident, maybe they let their insurance policy lapse, you know, they forgot to pay it and it got canceled and maybe they had a brand new 2023 lease vehicle. You know, they pick up a new Ford truck. It gets stolen or maybe a tree branch falls on it. The bank is hounding them like, "Hey, why didn't you have insurance?" They're thinking to themselves, "I need to do something to get them made whole so I don't get sued" and you know, maybe, you know, "I have to get to work. How do I do that without a vehicle?" Type of thing. They're quite likely to attempt to sue the multi-family operator and or property management company due to this. So something that I recommend all of my clients implement into their tenant lease agreement is a stipulation that they are expressly not liable for care custody control of tenant vehicles parked on the premises. You know, it costs the operator nothing to add a one-paragraph section for their tenant lease agreement and the effectiveness of this, should it go to court, kind of varies on a state-by-state basis. [00:08:23] You know, depending on how the courts have interpreted this and your jurisdiction. But simply by having something like this in your tenant lease agreement, it talks a big game and it's pretty likely to, you know, hopefully dissuade 95% of people from even attempting to litigate. So it's that element of, I don't want to say bluffing, but just making your rights known in the lease agreement that will hopefully alleviate the vast majority of instances like this before it could ever find its way to a courtroom. Because you know the first thing that would happen. Should a loss like that occur is the resident would talk to their personal attorney and they're going to immediately ask for a copy of that tenant lease agreement. [00:09:14] Right. You know, they see a section like that and maybe they, you know, advise to maybe not attempt to litigate. They just aren't sure if that might play out in the courts favorably for them and say it's just not worth it.  [00:09:29] Jason Hull: Yeah. 'An Ounce of Prevention Is Worth a Pound of Cure'. Right, exactly. So, I mean, they could get a really great lawyer, you know, to try and protect themselves. But you know, having a really good lease agreement in making sure that you have some of those things in place to protect you from potential issues surrounding insurance. Yeah. Sounds wise. So, yeah. Very cool. So, and you geek out on. This is fun for you.  [00:09:56] Calvin: I think it's legitimately interesting to think about. I'm one of the few people that gets kicks out of it. [00:10:03] Jason Hull: Which is cool. I mean, if you are going to be handling this stuff for your clients, hopefully you do enjoy it. Right. Thank you for sharing kind of your journey. What's fascinating to me is that every single step that you had mentioned most insurance agents or people that kind of progress through that would probably drop off that first level. Maybe the second level. They just get stuck. They're comfortable. So what is it about you that drove you to, in such a short time period, like get to the point where you are innovating, making changes to starting your own business?  [00:10:38] Calvin: Really a few things. I've always wanted to be in the agency principal. That's where it enables me to have the freedom to do the things I like to do. Yeah. You know, I don't just want to pick up access to five insurance companies and then try to write as much business as I'm able to that agrees with the appetite of those five insurance companies. I target segments, you know, industries that I find fun to work with, interesting to work on. [00:11:08] Overall fulfilling to be involved with, and I want to be as effective as possible constantly when going after and targeting those segments. So when you're working for someone else, I mean, they can have great access to insurance companies or it could be not as great and fairly lacking. More often than not, it is fairly lacking. I found most of the agencies I had been with previously, they had done, like you said, they got comfortable and kind of stopped trying to push the needle, so to speak. And, you know, that's fine. They were making, you know, excellent income for themselves and their family and it was working very well for them. But it just comes down to, I don't like to lose when I'm going after something. Yeah. So I might. Be humbled the first 1, 2, 5, 10 times I go after a new segment, but eventually I will start winning and I want to have access to the insurance companies. I know we'll win. I want to be active in the states where I would like to chase business, target accounts. Yeah, so it's about having the freedom on my end to accomplish my goal.  [00:12:23] Jason Hull: So, I mean that plays into stuff I've talked about on the show previously. I mean, you're an entrepreneur at heart. Like now entrepreneurs, they want more freedom and they want more fulfillment and you know, than the average person when most people want safety and certainty, which is good for insurance agents, right? So you had an outcome that in your mind you were like, I want to be agency principal. Like you knew what you wanted. And so this is take note, everybody listen. Because most of you're business owners, if you don't feel like you're progressing or moving forward in your business, you just might not have a big enough goal. So set your stake a little bit bigger, a little bit higher. Like what do you really want? It probably isn't, probably not satisfied or comfortable with what you have, but maybe you're not clear the outcome that you want. So, so, now a lot of our listeners do residential and a lot of them, some have multi-family. Some have single-family properties they're managing. What did you want to come share with us today and chat about?  [00:13:25] Calvin: So, I would love to talk about holistic risk management strategies. You know, things like my contractual risk transfer agreements that I think are advisable for all investment real estate operators, multi-family, and one the four family residential. Okay. Yeah. It doesn't cost anything besides maybe a consultation with your attorney, and it adds a lot of value that is not a recurring cost. It's a one time, you know, check to your attorney. Time and effort. So give an example. Let's say you're hiring a contractor, maybe an arborist to come trim the branches off of the tree on one of your properties. You'll want them to provide you a certificate of insurance that names your organization as additional insured. And you want that because if, let's say maybe when they're cutting down a tree branch and it falls and takes out the roof of a neighboring property, I mean, that's terribly plausible to happen. [00:14:28] You would rather that not be a claim on your insurance policy. You want that to fall on the arborist policy you know? We're in a what's called hard market, which basically means, for lack of a better word, it's a seller's market with an insurance currently. It's being driven by interest rate changes, inflation, and several other factors coming in to play. We don't want that claim to be tied to us that. You know, be passed off to the responsible party, the contractor that we hired. So by asking for that certificate, it makes it less of a challenge to get their insurance to respond should that type of loss occur. And on top of that, I like to see in the insurance requirement section of our, you know, contractor agreement for employing them on a 1099, that we have a primary non-contributory clause. We want a hold harmless agreement, and we would like a waiver of subrogation. We do that for a few reasons. We don't want to, you know, take the step of getting the contractor's insurance and having it name us as additional insured only for their insurance company to say, "oh, well, you know, we think that you are partially negligent somehow. You know, maybe you should have had the tree branch trimmed a year ago, or five years ago, and you let it grow too long." We don't want them to get into a more or less a battle with us and our insurance company on how much of the loss they're responsible for. We want them to take immediate responsibility and not attempt to, you know, wipe their hands of it, so to speak. [00:16:14] We also don't want the other insurance company to pay the claim, you know, settle the lawsuit only to attempt to come back and subrogate that loss from us, you know, the property owner or property management company. So that's where that waiver of subrogation would come into play. That would be where they attempt to be made whole by, you know, attempting to recover from a third party, so sue us, for lack of a better word. You know, maybe they might say, oh, well, you know, you were negligent because you had the duty to trim this tree branch when it got over, you know, 14 feet long, or just whatever argument they choose to try to put together. And then we're back at square one. We're being sued. [00:17:04] It's a claim. Our insurance policy we don't. So we ask for this as a requirement in our contractor employment agreement. It's fairly boiler plate. I mean, if you look at the insurance requirements on subcontractors coming from general contractors, you know, residential and commercial developers and builders, these requirements are usually found in what they're going to look for in their subcontractors, but I do commonly see it missing within property management companies. Despite property management companies being, you know, kind pseudo contracting type operations. It's kind of like that hybrid between like the clerical office job and the on the job site, you know, residential builder type role. [00:17:53] Jason Hull: Yeah, a lot of them kind of function as a general contractor to a bunch of contractors. So what what are the types of insurance coverage? Let's go to the basis, what are the types of insurance coverage typically required for a residential property management company? [00:18:08] Calvin: The residential property management company, you will want a general liability policy that would respond in the event that we cause bodily injury or property damage for which the company is liable. You want professional liability insurance. That's in case there is ever a professional boo boo, so to speak that comes up. I had a pretty nasty law scenario I won't get into too much detail on over the summer last year, which thankfully has not turned into a lawsuit. Let's kind of crossing my fingers and, you know, a little nervous for the insured on this one. I work with their third party property owners, but the property management company is not itself a client yet. But the story on this is that someone was, you know, injured, let's say in the apartment building via violent action from someone that may or may not have been a tenant. I'm not sure exactly on the circumstances. And the exterior facing door on this newer acquisition property had been purchased, you know, about four months before the loss event happened. That door had not been re-keyed by the property management company. So if a old tenant from five years ago still had their old key to get into the laundry room, they could, it was still the old locks. [00:19:29] The property manager was unaware that there was a door entering into the basement area that was accessible from the outside. So they just never thought to rekey it, you know, happens. There was a bad event in the property and if that were to ever make its way to court, the property management company would almost certainly get tied up into that. And to be honest it's kind of unclear if that might fall onto a professional liability or a general liability form. It's kind of gray because it's technically a bodily injury that occurred. It was bodily injury due to more of a lack of professional action than, you know-- it's not like they would hit someone with their car kind of thing. [00:20:13] So we would probably file claims on both policies and just kinda let the insurance companies fight it out on who's responsible to hear from there. So that would. A pretty good instance of where professional liability might come in into play. Okay. I also think that cyber liability insurance is a good idea. So cyber would come into play if, you know, let's say one of our accountants, you know, maybe we have two or three staff accountants on board. They download a file and maybe it has a virus and their computer gets hacked. And as a result, the personal banking information for 1500 residents that we have on file might have been stolen by a nefarious third party actor. We would become liable for what happens with that data, and that's where cyber would come into play.  [00:21:04] Jason Hull: Yeah, there was a one of the major property management software that our clients use, one of our clients were telling us was hacked, So, yeah, so now they're having to deal with that mess.  [00:21:14] Calvin: It happens a lot within the small business and the lower mid-market, you know, operation world. In recent years, I would say the biggest segment that really needs to put emphasis on protecting themselves is that middle market operation. Because if you're a nefarious third party actor, and maybe you're doing ransomware attacks where you hack into their system, lock down all of the data and say, send us $500,000 worth of Bitcoin to this address, or we're going to delete everything in three days. Yeah, I mean, it happens fairly often and they're not going to go after that real small operation. It'll be a operation. It's big enough to have financial resources where they can whip out a half mill if they need to keep their business alive more or less. But they're also not big enough to where, you know, they're that Fortune 1000 who has a, not only a risk management team, but they also have the, you know, cyber risk management team and the IT team, and they're able to much more effectively defend against that. So they target the businesses that are in between those two stages because they have the resources to pay out in a, you know, cyber extortion scenario. But they also do not yet have the resources to where they can adequately defend proactively against it. I think cyber's a great idea for everyone. I carry cyber liability insurance on my own insurance policy for Falcon. It's fairly cheap, and it does add a lot of value.  [00:22:54] Jason Hull: Yeah, I mean it's interesting. Most small businesses are one bad password on their team, away from affecting all of their clients in having to e crow in front of all of them. And you also have no idea how the companies you're using and most property managers are using a lot of different software tools including the one that has all the accounting stuff going on, you know, their property management software, back office and they have a whole team of people that one person can screw it up for everybody. So yeah. So we've got general liability, professional liability, cyber liability. What else?  [00:23:34] Calvin: You probably want worker's comp, you know, if it's just yourself, you can get away with not having it. But if you have any staff on board, even if they're a 1099 employment relationship, you will want the worker's compensation. And I say the 1099 rule, because that's a common question I get asked. You know, "I don't have any W2 employees. Do I need worker's comp?" The answer is yes, unless the third party, you know, 1099 employee that you're hiring provides you a certificate of workers' compensation insurance. If they do that and you do not have any other W2, then no, that is not a hard requirement. You can use your discretion on that. But if you are hiring, you know, even 1099, you need the worker's compensation insurance. It's fairly inexpensive, all things considered, and most states, because it does kind of vary by locality, it's a requirement and can create a whole host of hurt for not having it. It's one of those things where I am terrified, you know, maybe not doing something that the government loves, so to speak, and that's up there with things that ticks them off, you know?  [00:24:54] Jason Hull: Yeah. So another one that I hear about in the industry a lot is errors and omissions. Can you touch on that one or explain that one? [00:25:02] Calvin: So the errors and emissions is that professional liability element.  [00:25:06] Jason Hull: Okay.  [00:25:07] Calvin: So they have kind of synonym names for that line of insurance.  [00:25:12] Jason Hull: Okay. Okay, cool. Yeah. So, perfect. Okay. because I hear like all the time they're saying, getting E and O you need E and O stuff like that. So that's kind of what they're calling professional liability. So how can property managers better protect their owners through these insurance products?  [00:25:32] Calvin: Occasionally, the building owning entity itself may be tied up in a loss due to, you know, perhaps alleged property management negligence. So I'll give an example. Let's say, the property management company is assigned to hiring out snow and lawn maintenance services, you know, someone to come out and, you know, remove snow from the parking lot on a small apartment complex or a three-family rental property. And maybe they select a contractor who, they're nice and they're cheap, but they aren't super consistent or dependable. So sometimes when it snows, they just don't come by and snow and ice accumulates in the parking lot and perhaps a resident slips and falls on the way to their vehicle one day and they're seriously injured. It's one of those things where if the tenant sues, which they probably will, they're going to sue the property management company and they're going to sue the building company. [00:26:34] We would want, if we're going in the direction of, you know, looking out for our property owners and having that be kind of our unique selling proposition, we wouldn't want their insurance to respond because they hire us to take care of those things essentially. That was our boo boo one could say. That's where having our own general liability insurance would come into play, that coverage would trigger, and you know, it's kind of the inverse of how I usually see this play out, because it's generally the building owner's policy that would respond and then they would have the property management company as an additional insured. But I mean, if our branding and selling point is that we, you know, put a special emphasis on always doing right by the owner and just not allowing situations like that to occur, that's where we would want our insurance policy to respond primary.  [00:27:31] Jason Hull: So, I would imagine with covid happening and all the stuff that's gone on recently in the increase in government control that's constantly happening, if somebody hasn't taken a look at their insurance, maybe in the last five years, what are some recent changes or things they should be paying attention to or they should be talking to somebody like you about?  [00:27:54] Calvin: The first thing that I look for when reviewing a new policy for a new client, kind of getting eyes on the existing arrangement of coverage, just to make sure that everything is done correctly before I try to compete on price against that is to look at the building limit. If you haven't gone through all of the building limits with your insurance broker over the last three years, and really over the last year, maybe two years, it's probably significantly underinsured. I read the statistic recently that over 75% of buildings commercial investment real estate are underinsured by 40% or more, and the reason why that is not good isn't just that in a claim scenario that burns to the ground, we're only going to get a check for 60% of what it might cost to rebuild. because we're thinking, hey, the home's only worth 30% of what it might cost to rebuild. It's not a bad deal still. It's that the overwhelming majority of insurance policies, commercial property policies have what's called a co-insurance clause. And coinsurance is where the insurance company wants you to have sufficient skin in the game. So you can insure a property for 80% of what it might actually cost to rebuild. [00:29:14] So that million dollar to rebuild building, you can have a policy on it for 800,000 and that would be fine if you will like to carry 400,000. You know, maybe the market value of the property, that would not be acceptable and they would divide the amount of insurance that we have, 400,000 for this example, by the minimum amount of coverage that we should have had, 800,000. [00:29:39] That leaves us with a 0.5 gut insurance penalty multiplier. So on a $200,000 fire, they're going to subtract 50% and your deductible. So you get posed on that and are paying most of the loss out of pocket.  [00:29:55] Jason Hull: So are there any other unique or unusual coverage options that are related specifically to residential property management? [00:30:06] Calvin: I've been putting a great deal of emphasis on the tenant legal liability product over the last two years. It started popping up pretty actively around three or four years ago. I mean, there are some operations that have been doing this for a decade. It became fairly popular around 2020- 21. And what the tenant legal liability insurance does is it provides a mechanism, one for monetizing the insurance vertical for the operator, and two, it enables the property owner to shield themselves from having small, you know, tenant negligence type losses pile up on their own insurance policy and therefore claims history. The most common cause of loss I see on residential investment real estate is you have a tenant come home one night. Maybe they just worked 11 hours and you know, tired after a long, busy day and they maybe get home, crack open a beer or two, start cooking something, throw a pizza in the oven. Going lay downs on the couch for 20 minutes. Well, that's cooking. Watch some tv, and then they fall asleep and it causes a $75,000 kitchen fire. It happens all the time. It's a high frequency, low to medium intensity type loss, or like we had in the upper Midwest over the holidays, maybe they are going out of town for the holiday. And they're thinking to themselves, I'm going to turn my heat off during that time. It'll save me $20 in electricity. Right? So they turn the heat off and they come back four or five days later and the walls have exploded. You know, the pipes have burst and $90,000 worth of damage has happened because about we don't want that type of loss to be associated with our property policy. [00:32:07] We're probably going to get nonrenewed, and it's going to negatively impact our pricing and cost for several years. It just is a bad scenario to be in. That's what destroys the loss experience for investment residential real estate is that high frequency, low to medium severity type tenant negligence cause of loss. So what you do is you write into your lease, the tenant must provide a certificate of acceptable third party renter's insurance. You know, State Farm, Allstate, Farmers, kind of whoever. And if they fail to do so, or if they let coverage lapse, you know, they stop paying for it, we as management reserve the right to place that coverage or a comparable coverage at their cost and for both of our benefit, more or less. And the reason why you do that is we want there to be that coverage in place. You know, I had just over the holidays, like probably five loss occurrences that would've otherwise gone on the property policy that were able to be pushed off onto this tenant legal liability master policy. So it kept their property policy clean. You know, we didn't have to file a claim against any of my insureds because of it.  [00:33:27] Jason Hull: It's like having insurance to protect your insurance.  [00:33:30] Calvin: Correct. It's unbelievable that property insurance has become this level of convoluted, but it's the game that we're playing and what we have in front of us. This is one of the most effective tools and toolbox. [00:33:44] Jason Hull: So it's about having layers of protection.  [00:33:47] Calvin: Exactly. Got it. It doesn't cost us anything. We pass the cost off onto the tenant. And then what we do is we add maybe $3-7 per door per month on top of what we might pay to the insurance provider. So maybe we pay nine, we charge the tenant 16 and pocket that $7 spread as an administrative fee. [00:34:11] And that's a, but you might see this on P 12 s occasionally when you're underwriting a property on market or otherwise looking. Investment real estate is, you'll see insurance listed under the profit side of the equation. That's where this is coming into play.    [00:34:28] Jason Hull: Okay. So it can be a profit center. [00:34:30] Calvin: Exactly.  [00:34:31] Jason Hull: Got it. Okay. So, how often should a property management business owner be assessing their insurance?  [00:34:41] Calvin: Once a year. I would think about it very actively as you come up to renewal and then, you know, depending on what best practice implementations we're hoping to, you know, add to what we're doing over that next year, it's good to think about the key points frequently, but we should put special emphasis on it once a year as you come up to renewal. You know, just kind of see. What, if any improvements might be recommendable and how the market has shifted over that last year, but you don't need to think about it every second of every day, but it is good to have it in the back of your head often because it kind of forces that extra level of diligence to being front and center. [00:35:32] Jason Hull: They just need somebody like you to think about it every day.  [00:35:35] Calvin: Exactly.  [00:35:36] Jason Hull: So I think a question that every business owner has is, "how do I balance the getting the best deal on insurance versus doing too much, get enough coverage, not spend an arm and a leg..." like, you know, in finding this balance and then trusting an insurance agent to do what's in my interest instead of just their interests? [00:35:58] Calvin: So I'm a big believer in transparency with my clients. So something that we always provide with every account, new and old, is a market report. So let's say I, you know, I go to 11 different insurance companies for a new property that you're looking at. I provide a breakdown of where each company is coming in at with their pricing, with comparable coverages between them. You know, we can't set the pricing on the retail side. We're just kind of at times the middlemen of bad news, so to speak. [00:36:32] Jason Hull: The messenger.  [00:36:33] Calvin: Exactly.  [00:36:34] Jason Hull: But don't kill the messenger. [00:36:35] Calvin: By having that market report, it demonstrates that we're bringing our due diligence to the table and not just going to one company and saying, here you go. Here's our price. This is what we can do. I think that's, just a low-effort, less ambitious approach. I mean, sure you can move a lot faster by hitting one company, but you can deliver the best results by going to every company that makes sense to approach. And letting them fight it out. Maybe company one is hotter than company two and a given zip code, but that competitiveness flip flops, depending on just the details of the case that you're working on. [00:37:21] So by approaching every insurance company where it makes sense to approach them, it's within their appetite, you let them fight it out and you see where the cards land. You know, sometimes the price comes in a lot lower than we were expecting to see. Other times, it's not within the range that we were hoping it would be, but by hitting every company possible and then showing your cards as to where they land, you know, that's really all we can do. And it demonstrates that we put, you know, our due diligence into marketing the account.  [00:37:55] Jason Hull: Yeah. So you said that what a lot of insurance agents might do might be low effort or less ambitious. And so I think this is important to point out, this ties it back to the beginning, and this will be maybe good, you know, wrap up for us, but I think, you know, property management business owners listening to the show, my recommendation is you want to leverage and use vendors and use people as a support system in your business that are not low effort and less ambitious people that are running their businesses. There's a lot of accountants and insurance agents and people that really, they're basically like an employee with clients in their own mind. And then there's accountants like, you know, my Profit First Coach, an accountant and others that we leverage in our business. They think like entrepreneurs. They are always trained to improve themselves and improve their business, and they see things through a similar lens. So I can trust their advice and I can trust that they're wanting to that, that they know how an entrepreneur thinks and they're kind of eating their own dog food as an entrepreneur, and these are very different. Not all accountants are entrepreneurial, even though they have their own business. Not all insurance agents are entrepreneurial, even though they might have their own business. They're like just some State Farm agent that has their thing and they're set. [00:39:20] Right. So, so I think that's important to point out. I recommend that you find vendors and people to work with that see things through the lens of entrepreneurism because it's a very different lens. There's a very strong different focus that they prioritize fulfillment and freedom instead of just the safety and certainty. They understand that aspect. And in your line of work, you need to pay attention to safety and certainty, but you're somebody that I'm sure can understand the goal that these entrepreneurs have of having more freedom and more fulfillment. And to you, I would imagine safety and certainty and providing insurance is a way of helping them create more of that. [00:40:02] Calvin: Exactly.  [00:40:03] Jason Hull: And that's different than a lot of insurance people.  [00:40:07] Calvin: Yeah. I mean, I've definitely met some very ambitious colleagues within the field, but it's one of those things where it's not really that difficult in terms of chance of success or failure to make a very healthy living for yourself and for your family working in retail insurance, I mean, if you are in the gig for 10 years and you're writing even a modest amount of business, 2, 3, 4, $500,000 quite easily. So it, I see how that can more or less, I view it be as a trap because you become quite comfortable and stop trying to push the needle.  [00:40:50] Yeah.  [00:40:51] Jason Hull: Comfort kills sometimes. Yeah. Yeah. And you know, that's the case I think for all of us as business owners, we can get comfortable sometimes, and if we're not willing to get a little bit uncomfortable, if our goals don't sort of scare us a little bit, we don't have that ambition then we kind of lose life. I think feel like that's an important aspect for us to really find that fulfillment and enjoyment. Well, Calvin has been great having you here on the show. How can people get in touch with Falcon Insurance and get in touch with you?  [00:41:23] Calvin: My email or phone or Facebook or LinkedIn, whichever is most convenient for you. I am extremely available and glued to the grind. Close to 95 hours every week. So you can email. Give us a call, shoot me a message on Facebook or LinkedIn. We'll rise to the challenge every time.  [00:41:43] Cool.  [00:41:43] Jason Hull: Share some of those things right now so the listeners can hear that.  [00:41:47] Calvin: Awesome. My email is Calvin-- c-a-l-v-i-n @ falcon i n s agency.com and my direct line is 810-309-9475. You can find me on Facebook or LinkedIn under Calvin Roberts.  [00:42:07] Jason Hull: Perfect. All right, thanks, Calvin. Appreciate you being on the show.  [00:42:10] Calvin: No, thank you very much once again for having me. I appreciate that.  [00:42:13] Jason Hull: All right, so if you are wanting to improve your property management business, and struggling with figuring out how to scale your team, your operations, your systems, here at DoorGrow DoorGrow, we are rolling out a lot of really cool new tools that are game changers for the industry. We've got DoorGrow CRM, which is going to be a disruptor, we've got DoorGrow flow, which is a process software, which is going to be a disruptor, and we've got DoorGrow OS, which is far and way better than things like EOS or Traction. Really awesome way to manage and run your team and the real rocket field of getting your team to think as decision-makers and as if they're business owners in the business to innovate and move the business forward. [00:43:03] And we have DoorGrow hiring. This is a game changer. This is one of the most costly mistakes business owners make in their business. Team members are the most expensive resource usually in a business. Hiring can be incredibly costly. It often takes you one, two, maybe three months to realize you made a bad choice, and then they may have cost you a lot of opportunity, cost, and money in the meantime. These are all systems that we're helping build. We call this the Super System, all of our different systems. It's like the Voltron of systems or THUNDERCATS of systems or Power Rangers when they combine. I don't know what age some of you are and when you grew up, but depending, this is like the ultimate combination of systems and it's all of these are free and included in our high-level mastermind in which you get to connect with game changers in the industry. People that are growth-minded and grow your business even faster. And we give you a lot of really good coaches and systems. We have some of the best in the industry we brought in as coaches that are supporting our clients. It really is a game-changer. Nobody else can touch us because we run on DoorGrow OS. We leverage our own systems and do these things, and we move rapidly as a company. [00:44:18] So DoorGrow is not the same company it was even 30 days ago, even 90 days ago, especially not a year ago, we have an amazing team and we would love to support you and help you scale your business and get you to that thousand doors or higher, whatever your goal is, and make your day-to-day in life easier and easier the more doors you add, which is the reverse of what we see most clients doing before they come to us. [00:44:45] If this is interesting, reach out to us at doorgrow.com. Until next time to our mutual growth. Bye, everyone.  [00:44:52] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. 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