Imagine a blue-collar kid, armed with only ambition and an accounting degree, transforming a small-scale venture into a thriving property management company. That’s Tony Cook for you, he runs the Bay Property Management Group, who with his grit, hard-won wisdom, and smart marketing strategies, carved a name for himself in the competitive world of property management.
Join us as Tony provides a comprehensive understanding of the role of virtual assistants, the significance of thorough training, and the challenges of property maintenance.
Imagine a blue-collar kid, armed with only ambition and an accounting degree, transforming a small-scale venture into a thriving property management company. That’s Tony Cook for you, he runs the Bay Property Management Group, who with his grit, hard-won wisdom, and smart marketing strategies, carved a name for himself in the competitive world of property management.
Join us as Tony provides a comprehensive understanding of the role of virtual assistants, the significance of thorough training, and the challenges of property maintenance.
If you're starting out now, you got a couple of properties under management or you just have your own properties. What is the step one to starting to grow your property management company?
Speaker 2:The first thing I would do is a ton of marketing and get it to the point where my phone's ringing so heavily I can't take it. That's a good problem to have. Now I just throw money at it, right. So hopefully you have that. So it depends on where you're coming from. If you've got a couple hundred grand in play with, throw it at marketing.
Speaker 3:What kind of marketing?
Speaker 2:SEO, big time SEO man. I get 99,000 search queries every second, 8.5 billion searches per day. If you can get.000001% of that, you're in pretty good shape, man.
Speaker 1:Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Calvis. All right guys. Welcome back to another episode of the Everyday Millionaire Show. We are here with Tony Cook. Tony, how you doing. Pretty good man, nick, how you doing.
Speaker 3:Good, good.
Speaker 1:So Tony comes from a Bay Management Group. That's kind of where you are now. But why don't you give us a little elevator pitch on where it started and how it got here?
Speaker 2:In terms of BMG, or even prior to that.
Speaker 1:Just prior to that, your personal life leading up to BMG. Fast forward through that and then break down where you are now.
Speaker 2:Yeah, sure. So I mean it started back in the 80s, obviously, when I was born and grew up very poor. I grew up with a young family. My parents had me as teenagers and whatnot, so it was kind of blue collar grind. Ultimately was the first one to go to college in my family. Once I got done with college, couldn't find a real good job up in Rochester, new York, so we decided to move down here that was back in 2013 and got a random call from a recruiter and had a job for a startup company that was BMG and took a swing for it. Man, just went for it and here we are 10 years later, started out in accounting and became the controller and then eventually the owner approached me and wanted me to run the show. So been doing that for about seven years now.
Speaker 1:Nice. I saw in your bio, though, that you dropped down of high school and then went to college, so you just had like a skip year there, two years. So how did that? What happened there, why did you drop out and what led you to come back to education after choosing to leave school?
Speaker 2:It's a good question, man. It's a complex question. So my party years were basically from 17 to maybe 22 or so, but it started in high school. So in high school I was a really good student, did really well, but followed the wrong crowd. And my brother followed the wrong crowd he knows it and ended up getting a lot of fights and ultimately dropped out because there was a ton of people at the school that wanted our family, basically wanted to kick our butts, and took two years off, met my current wife and their upbringing was a whole lot different than mine, and so she kind of pointed me in the right direction. She went to school, I decided to follow Sue, because I'm not going to be the non-bred winner and then, naturally, it just kind of all unfolded from there.
Speaker 1:Nice. So you got your GED and you started applying for schools and that's hey led to accounting. You just picked accounting. That was like what interests you? Accounting just is kind of a boring thing. No offense, how did it come to accounting, dude? I have no idea. It's just like oh, something that sounds good.
Speaker 2:Dude, I grew up in a blue collar family. Not a lot of business minds in it. There were some, but I didn't really speak with them that much, and so when I was going to apply I tried to pick what I thought would be easy. That was just the natural thing, like what's going to be easy, what's going to make me more than I'm making right now working this debt on job? Basically, I think I was making like 12 bucks an hour or something. I was 19 years old and I'm like let's get out of this. And business came to mind. I'm like let's learn about business. And then when you're going through business, you've got like 20 different categories finance, marketing. I said accounting seems easy to me. I'm a numbers guy. Like math. It was brutal, but that's why I chose it like math.
Speaker 1:Yeah, Nick, would you say, accounting is like the easy. Would that be like the easy thing in your business? That's probably not the easiest thing.
Speaker 3:No, something that's best suited for delegating to someone else who can do it better. Exactly, yeah.
Speaker 1:Accounting is like one of the most important things in business. Nick and I have been talking about this for weeks, like getting your books in order and all that stuff. But it is a daunting task, especially in property management and construction to the two industries that I'm in.
Speaker 1:But so how did that look? So you went to school, you got a four year degree in accounting and then the recruiter got your job with Bay Management. So Bay Management they're now a massive company. What did it look like when you came on and what was some of the things that you saw? That were issues that, as the accountant or the new person in accounting, had to fix.
Speaker 2:Oh, this is fun. I don't even know if this is public, but whatever, I don't think they'll care. So basically, when I came to BMG I was the 10th or 11th employee, I can't remember exactly but very small mom and pop shop at a fell's point managed, I think, about a thousand doors, mostly single family. So I started up in accounting. There's only three of us. We were packed in a row house it was on 1800 block, eastern Avenue back in the day so we're all packed in like sardines in this row home and I immediately recognized they had absolutely no idea what they were doing.
Speaker 2:So the owner is phenomenal with sales business, like he's a genius. He really is. I give him total props. But when it comes to books and accounting he just doesn't want anything to do with it, and so I think for a couple of years they just kind of let it go a little bit and there was a big migration from they were using only QuickBooks to Appfolio. It was completely botched like a year before I started there, and so the first thing I started to notice is like things just aren't adding up. Like the money's all there, everything's good, but it's like the it's just not in order, like the bank recs aren't done properly, and so it was literally a year and a half of cleanup.
Speaker 3:So you said it was a startup but you said, when you got to them they already had a thousand units under management. How did they get from zero to a thousand?
Speaker 2:Peer marketing man and referrals. I don't know the exact beginning to this day, to be honest with you. I believe his father helped out with referring, like some commercial people that were buying multifamily and whatnot, and then he just started marketing, marketing, marketing and getting calls. It's pretty much SEO is very it's like 99% of our business is SEO.
Speaker 3:And how many? How many units do they have under management today?
Speaker 2:We're about 7,000, just about.
Speaker 3:So per hundred units that are added on, is there like a certain number of employees that should be added on? And let's say you know for us, like let's say we have a small portfolio of a hundred units, is that like a certain number of employees that should be on that, on that staff?
Speaker 2:Absolutely, absolutely. And so initially, when you only have a thousand doors, you don't know all these things, unless you really studied it and have a plan of growth like exponential growth. I'm sure Patrick had this plan the whole time. I never thought we'd get to this point. I started at a startup. I'm like, okay, maybe we'll manage a couple thousand and it'll be. You know, 20 employees, we're 200 and something employees.
Speaker 2:Now it's pretty wild, but we didn't until maybe five years ago figure that out and we tweaked and tweaked and tweaked with it. And then, of course, with COVID, you have the VA's. Now you have more remote workers coming in, you know to the situation. So now you can actually staff up more. So really the answer depends Do you want to run lean and put a lot on your staff or do you want to run less lean and not do that?
Speaker 2:Typically, what we like to do for every 150 single family doors, one property manager, you know again depends on we're third party management. So it really depends on, you know, the owners and how hands on they want to be. We allow a lot of hands on, which I know a lot of companies don't do so. It's about 1pm for every 150, attack for maybe every 250. Because I think we have about four per office and then accounting one for every like 300 doors and then leasing agents. I mean it just depends on the time of the year in the market. We do commission based, so they kind of come and go.
Speaker 3:So maybe that like one property manager for 150 that deals with like everything, like tenant placement, you know, deal with turnovers and leasing.
Speaker 2:Yeah, so we haven't gone the portfolio route like that. I know some companies are doing it. We like we're departmentalized, but as an owner, as a client, you, your property manager, is your account manager basically. So the account manager or property manager, they're the face of our business after the business development manager. So you get handed off to them and you're with them from here on out. But when your property goes to get leased, then they pull in the leasing agent. They introduce themselves, give you the comps and all that. They're doing the leasing behind the scenes, giving you an update weekly. But you're still engaging with the PM continuously there. And then, of course, we have in-house maintenance tax that can do the turnovers and inspections and all that.
Speaker 1:So the property manager, what's their kind of day to day tasks when they're passed on? You know somebody that signs on a bunch of units. They're passed on to this property manager. What is the property manager doing? And then that leasing person are they working for you guys or are they just like agents on teams all over the place that just come and do commission-based placements?
Speaker 2:Both on that and I'll get to that. So property managers basically I'd say 70% of their job is service requests in turn over work. So heavy, heavy maintenance. They have to troubleshoot maintenance really well. They have to project manage remotely with the agents and the tax being the boots on the ground if they need to send pictures or whatever. Most of them are overseas and we've been able to do that.
Speaker 2:Now. Some owners don't like it, but most are totally fine with it. You're getting great service. You know, instead of having 250 doors like they used to, now they have 120 to 150. And so they're responding to you very quickly. You know, if we put too much on them it's going to be a problem. And so largely maintenance compliance getting rental licenses, getting led certs done, managing the turnovers, calling tenants when they haven't paid their rent, you know, owner or disputes with other tenants and multifamily buildings. They're kind of similar to what you would have in a multifamily setting, like they're really running the show there and kind of coordinating with different individuals in our company to get stuff done. But they're largely maintenance and turnover work and just making sure the tenants and owners are happy and whatnot.
Speaker 3:So what are the best tasks to give VA's and the property management scenario?
Speaker 2:Every single thing that can't be done locally. So I would say literally everything, but you need somebody locally for accounting, yeah like money they don't have access to like financial stuff.
Speaker 1:Oh yeah, they do, they do all of our books.
Speaker 2:They do all of our racks, everything.
Speaker 1:But they could send money like oh yeah really. Yeah, it's a scary thing to think about.
Speaker 2:Yeah, it's scary yeah so you lock it down, man. So we've used different banks, but you lock it down with them. So you have different tiers of approvals, right? And so you have. You know, initially we started with accounts payable and it's like, well, you're just entering bills, no problem, right. And then we realized we're spending a lot of time doing ACHs and stuff like. Epfolio at the time was very it wasn't as simple as it like a click now. And so we're like, why not just give the VA a try? You know, we've been here a while, I trust her and she's actually my assistant today. But we gave her a shot and basically what we did is told the bank hey, let her issue them, that's fine, Somebody needs to approve it in our accounting department. And then there's a secondary approval and we have an auditor in house, so the likelihood of something happening is zero. It's never happened before.
Speaker 3:Do they handle tenant calls or do all of the maintenance requests run through Epfolio? Who would?
Speaker 2:the property is yeah, oh yeah, oh yeah. So we have. Each office has about 10 property managers and let's just call it a thousand plus doors. So, yeah, absolutely 99% of the time it's gonna be in the portal. I encourage our property managers if somebody calls you and it's a simple request, just tell them to go to their portal. It's documented, it's clear. You know there's no communication breakdown. You know, if we need clarity, we'll call. We just ask that you upload a photo and or a video and just make it clear and if it's not, they'll call and they'll modify the work order and you can see that in your portal.
Speaker 3:So just for clarification, you said the property manager handles that, but not does the VA's handle any type of maintenance requests that come through at Folio.
Speaker 2:So the VA is the property manager.
Speaker 3:Oh, okay.
Speaker 2:Yeah. So, the only put it this way. So the three main departments in property management leasing, maintenance, property managers right, the leasing and the maintenance are here. All the property managers are there, except for like one per office for the you know multi-family owners to go to court things of that nature.
Speaker 3:And how does the company train those new VA's that they're bringing on as property managers who aren't local?
Speaker 2:Very extensively the initial. So switching from local people that have been doing this for 10, 15, 20 years, et cetera, or even just a couple of years, but understood our culture. You know how we operate, how our buildings are made and built so much different than the Philippines and Mexico and things of that nature Like they have like a lot of terracotta and one they're not used to. Shingles, like shingle, was it drywall with that? Like it's the craziest things you hear. And so what we do is the first week is like huge, huge, just you know, doing your fair housing, training, learning, asana, Netfolio and Outlook and all those things, microsoft Teams, you name it SharePoint, and then, and then essentially they're plugged in with their shadowing somebody. So you're gonna go anywhere from a month to two months with just shadowing somebody else that's managing their own portfolio of 150. And then what we do is we're continuously gauging them. You know we're not, we don't have quizzes yet but you know their supervisor's talking to them at one-on-ones every week and essentially, when they feel they're ready the trainer feels they're ready and the manager feels they're ready then we start slowly giving them property.
Speaker 2:Now, every once in a while it sucks, a property manager will open leave, then you gotta take the whole portfolio and plug it in a newbie. That becomes a problem. There's not a whole lot you can do about that. So what we try to do is just over staff. And we didn't have that luxury pre-COVID. You know pre-COVID was. I hope this doesn't happen. So if it does we're screwed and that would be bad for customer service. The margins didn't make sense to have more PMs. Now you can just load up. So we have literally like one or two extra per office. Just I wanna say chilling. They're watching, helping, doing things, but they're ready on a whim's notice to take over.
Speaker 3:So the contractors that you guys use, whether in-house or just subcontractors, through the maintenance calls? Are they logged in as a vendor in Apulio for the PMs to assign a test to, or do they just have? Do the PMs just have a list of the contractors to call whenever there's a leaky toilet, for example?
Speaker 2:Yep, good question. So we have both. So, in-house, we try to, over time, have everything be in-house. Problem is is you know how much management you need for that? You run a business. You know you're gonna need project managers, You're gonna need superintendents what have you? Like? We don't know roofing. There's no one in my company that maybe there is. I've never spoken to them. That is an expert roofer, right? Like we don't hire expert roofers Maybe they did it in their previous life and I'm not aware of it but for those things we just outsource it, man, and what we do is everything's electronic. So you're gonna get a work order sent to your email and then they're gonna accept it through email and then they're gonna do the job, send the pictures, coordinate with the tenant, send the invoice and all that jazz.
Speaker 3:So that's essentially how the PM communicates with the contractors via email.
Speaker 2:Email and phone call text largely and then-.
Speaker 1:They've set the work orders and stuff through Apulio right and yeah, you create the work order at.
Speaker 2:Apulio and we actually have Apulio Plus, so it triggers the workflows, which is amazing, and so it's kind of like automated in a sense, where it tells you as a PM exactly what to do Go check the previous work orders, check to see if there's any warranties et cetera, See if the owner uses their own contract or see if the owner doesn't want that plumber at their property. The craziest things come up. So that would be create an Apulio email to the vendor, but if it's in-house you can just create it and like send it through teams email calendar invites, Like there's different ways you can get that done, but ultimately lands on the maintenance text calendar and they're notified and they know what to do.
Speaker 3:Is there like a follow-up period? Let's say, you send the PM sends the work order to an in-house guy and he doesn't hear from him for a day or two. Does he just, I guess, just follow back up with him to make sure that the work has been scheduled and or completed?
Speaker 2:Yeah. So if it's a vendor of ours, absolutely. If it's in-house, there's really no need to worry because we have maintenance coordinators as well, that kind of help out. That the PM department only for the in-house guys. So if you're a PM and you're sent, you want to work order and you want to send Ryan to take care of it and he's in the field, you're actually gonna send it to me, the maintenance coordinator. I'm gonna look at it and sit there and say, okay, where is this property? Cause we're all over man, who's my closest tech that lives there?
Speaker 2:We always think about, like make sure you're sending your techs to close jobs and then you try to make it so the tech ends their day close to their house. You'll lose people if you don't do that. Like, people will get tired of driving an hour home when it could have been 10 minutes. Why did I start my day here and then way out there? So the maintenance coordinator, within like minutes, is gonna go ahead and look at all that and then send a calendar invite to both the PM and the tech and so you're notified almost immediately that it's on the books and then the very whenever that calendar invite comes up, you as the PM and there's a follow-up in that. Fully on the work order. You're gonna know if you didn't hear back at that point when it should have been done. And then that's when you're gonna say I never got the completed photos at the invoice and that's all in the workflow that we'll kind of tell you to check on that.
Speaker 3:Gotcha and I found it a lot easier when scheduling these maintenance requests to have the subcontractor in-house guy scheduled directly with the tenant. Is that what you guys do most of the time?
Speaker 2:150%. Yes, in-house. We kind of let the PMs and the techs like some techs want to do that, some don't want to do that. Pms, some want to, some don't. I'm very loose with that, like it doesn't matter to me. One of you needs to do it and if you work here and you want to do it, great, it's getting done. That's all I care about. I would prefer that everything is done by the person that's handling the job.
Speaker 2:That would be much better. But it's just, some PMs don't like it. They're old school, that's how they've done it before and they just want to deal with it, and some techs that want to be very hands-on with tenants. So one thing that I deal with a lot.
Speaker 1:my staff right now works eight to four and most times where there's problems with property management is from four to all. The other times that people aren't working Because people come home from work and that's when they notice things that are wrong with their property so I'm constantly dealing with that issue where it's like it's 6.30 and the guy just got home from work and realized the toilet's leaking. Like how do you deal with that? Do you have people working different shifts so they cover that nighttime shift?
Speaker 2:I'll take you through the we've done, we've tried everything, basically, and if you have a better solution, please tell me.
Speaker 1:No, I'm asking you because I don't.
Speaker 2:This is a fun topic. So back in the day when BMG was young, the maintenance techs were on call. We literally had an extra phone that they'd carry around. And that's very common in the industry still, especially with multi-family. And so you as a tenant, when you're calling in, you're getting that tech directly. Problem is is that that like takes away so much from the guy that literally just worked all day, and so we were offering them extra money to do it. So hey, every time you have the phone, every time you have the phone, 500 bucks for the week, whether you get one calls or 50.
Speaker 2:So we started with that. The techs got burned out, so over time they're just like I can't do this anymore, man. I just worked 10 hours. I'm shot. Last thing I wanna do is pick up a damn phone.
Speaker 2:Now At Folio came out with the Maintenance Contact Center. I think they call it smart maintenance. Now it's terrible, to be honest with you. It's just not good. They don't train people properly. I've expressed my frustration with them on countless occasions. So we tried that for like two years. It just didn't work very well. Then we went out and said you know what, instead of having our in-house team do it? Why don't we just outsource it to somebody else and there are companies that do this but we thought it'd be much cheaper and better to control it internally, so we went out and just found two people per office to do it. Typically, when you put the ad out, you're finding retirees. You know both people in Baltimore, I believe, are retirees right now. They're home. You know they're not doing a lot outside of the house. They're like whatever, I'll pick up the phone, no big deal. It's funny, though, when you start to analyze it. So we track every call right, and so I know how many calls we get. 99% of them are not emergencies.
Speaker 3:Let's be honest.
Speaker 2:You get out of work and it's like you find something in your house. It's not an emergency, we're not coming out tonight, so that's monitored through the portal and then if they call in they get routed to the appropriate person. They're gonna determine if it's an emergency or not. 99% of the time it's not. And what I analyze over time is you're really dealing with maybe five tickets a week and that's with the amount of properties we have. It was not much at all and I'm like why are we paying at full a fortune when I pay this guy 500 bucks a week and sometimes they get no calls and he's just great. Thanks for the 500 bucks.
Speaker 1:Yeah, yeah, I just always end up. I'm that guy on the weekend that's just dealing with all the stuff. When the people come home and they realize that this is wrong and everything to the tenants is an emergency, everything, everything, it doesn't matter. And I hear what it is and sometimes I get it, you know. But there's other times when I'm like I really can't do anything about this right now, Like it's literally 6.30 on a Friday. If I call my guy to go back to work right now, he's gonna quit tomorrow.
Speaker 2:Yeah, and it's even tougher because your stuff's in-house. I think you have some stuff in-house. When it's third party, you gotta be more mindful of the cost than you would with your own stuff.
Speaker 1:With your own stuff.
Speaker 2:it's like okay, I'll eat an extra 50 bucks for a call, whatever, like just, I don't wanna deal with that on the weekend, Like because then you're dealing with the owner that's bitching about it.
Speaker 2:Now I'm managing your property and I get a call Now if it's gonna be 150 versus 100, I gotta check with you, man, is Ryan gonna be good with that? Like, and you might not be. And so then I'm like all right, what do I do now? So you know, we try to be reasonable. You know I wouldn't say beat down vendors, that's not the right way to put it, but we try to have reasonable pricing with them. We give a lot of volume right. So if you're getting 400 grand worth of work a year on like service calls, I would hope that you're not gonna charge us 150 bucks to go out Now. And I work very closely with our contractors to make sure they're making money and stuff. It's really important, like, if you're not making money, you're not gonna be happy.
Speaker 1:You're not gonna do a job, you're not gonna be motivated to do You're not gonna be motivated.
Speaker 2:And then owners you try to explain look, you don't wanna pay the cheapest guy, you wanna get good contractors in there.
Speaker 3:So, on average, how many maintenance texts do you need per 1,000 properties?
Speaker 2:Four, so one for every. 250 is kind of our math and it varies. I'd say 200 to 250 in the summer, they all sell salary or hourly, with bone quarterly bonuses based off like how much money they generate the company.
Speaker 3:Gotcha. So how much do you guys charge? Is it like a percent that you guys charge for like maintenance stuff?
Speaker 2:For our got like hourly rate for our guys or I guess, flat rate billing at all.
Speaker 3:No, I guess, like once, like if you're coming out to one of my properties that do like a plumbing job and it's 175. You guys charge 200, for example. Is there like a percent like on top of what the maintenance cost and what you guys are adding on to make your money also?
Speaker 2:like a markup, yeah, like a, like a yes and no. It's tricky. So you got to be careful with that Because, as an investor, when you go to a management company and it's all over the internet, you expect to pay less money, like and I think it's a common misconception, to be honest with you as an investor let's say, you got 10 properties, you go to a PM, you're like you're gonna be able to do it better than me, you're gonna be able to do it cheaper than me, etc. It's not always the case, you know, because our vendors are vetted, they're insured, you know they have we make sure and we and we will literally cut you off in two seconds If you don't send us your liability and workers comp. So you got to be really, really careful with that stuff.
Speaker 2:So the vendors, when we negotiate, when we bring you on, we actually will negotiate and say, hey look, we, we need to make Money in this as well. So instead of charging the owner like a markup fee or something like that, we essentially tell them hey look, you're gonna get a crap load of business, you're not gonna have to market, etc. And we kind of see it as like a referral fee, essentially, on each job we do a 20% fee and so the vendors taking the hit there. So they're essentially coming in, they're gonna charge market or so and then they're gonna take that little hit to essentially Make sure BMG makes money, the owner's not overpaying, etc. So the vendor ultimately does take the hit, but it's the volume of work where we're able to keep, keep them forever. Most of our vendors have been with us forever.
Speaker 3:So what are some of the maintenance things, if any, that you have to hire out Someone who's not in-house to take care of?
Speaker 2:roofing, big plumbing jobs. You know If you have to do a main water line and whatnot, hvac work, you know we don't have guys that can do installs and whatnot. We have guys that can do service requests. The problem is I don't like to send them out, because if they go and then they see, okay, I know what it is, but I can't do this now the owners like why'd you charge me now?
Speaker 1:I got another company.
Speaker 2:Like that used to happen and I would just credit the owner. But I ultimately said guys, let's just not, because the problem is, I bring in somebody that's a HVAC tech that you know license. They're very, very good at what they do. There's no one else that can oversee them to ensure it's actually getting done right. We essentially have to trust that guy that is getting it done because no one's coming in behind them, right?
Speaker 1:You know that's expensive and the business to do that problem is to and I thought about this too like Even with 7,000 units, like to have your own like HVAC company in-house. It's like a whole nother thing to manage, where the profitability wouldn't make sense unless you like scaled it up. Yeah. And then the guys in the field. I have this problem all the time. When I send my guys for like a simple thing that Like I think is a simple thing, well, they don't have like an HVAC truck with all the different tools and different you know Materials on that, or electric or whatever. Yeah, that's why it's always better, I think, just send the professional that like has the plumbing truck so he has all the fittings in the truck exactly because then our guys, what ends up happening is they go to the house, they say, oh, this is wrong, and then they drive to Home Depot.
Speaker 2:I'm just chewing up clock so don't like, okay.
Speaker 1:Well, it just took three hours and the plumber would have taught. You know, charge us 300 bucks and this guy just. It took 280 bucks to do with our in-house guy and it probably didn't even get done right, so like it's very kind of did we really just win here?
Speaker 2:exactly? It's very, very common man and, unfortunately, when you're so, we have an in-house recruiting team and so you know they're recruiting tax all the time. And it's one of those things where, when that's not fully what you're doing and it's just kind of part of your business, it's an important part, very important. You know, tents were new because of that, but when you, when you have that, I mean you just got to be extremely careful and you got to do it right you, when you bring them in, you don't necessarily know we're not like expert, like you would know. You know you do this stuff. You know we're on a contracting business. We don't. You know we don't run a contracting business. We run property management business. But there's not all these, these managers that can make sure these guys actually know what they're doing. They're not coming in and demonstrating work to us. They're coming and we're hoping they can get it done right and if they don't, we're gonna eat it and send someone that can so hopefully it works out.
Speaker 3:I have a question. I get between maybe 30 to 60 piece of mail per week, and how do the PMs who are working in different areas, how do they handle things that they can't physically receive in the mail?
Speaker 2:Yeah, so that's one of the. There's maybe 4 or 5 people per office that are local. One of them is the, the person at the front desk, who's actually not even the receptionist, so they're overseas as well. When you call our company, you'd have probably have no idea, because they speak just like perfect English and whatnot, but there's one person at each office that handles mail Keys. So if you have to go to our office to get keys, they're gonna do that, filings on tenants, like if they have to go to court, and whatnot in various other like office order supply. You know getting supplies. You know All different, very you know all different things, but there there's someone on site at each office to handle that. That's one of the things. I know there's solutions out there for this, but they'll essentially get the mail.
Speaker 3:They'll scan it in and then they'll fire it off.
Speaker 2:Yeah, we'll either drop in a folder email to them, depending on what it is, I just Recently hired a VA.
Speaker 1:This is like a second, a second week now. Maybe it's first full week, but he's been a second week. He's been just like amazing and like just such an integral part of my life now, oh yeah, I organize my emails in the morning and then that's great.
Speaker 1:Going through. We have like a morning meeting and then an afternoon meeting and we set the goals. Like he's taken over the Instagram, the Facebook's, like he's going into my personal Facebook and messaging people from the Maryland investors network that are looking for contractors, and like all those things are Tasks that I was burning up time in front of my computer, yep, when I should be doing things like this and you know, out at events and meeting people or whatever else. Yeah, when did you make that decision to go VA or heavy on the VA's? And then did you hire Like I got mine through a like placement company. Is that who does that kind of what you're doing as well, through like placement companies? Essentially, yeah, yeah.
Speaker 2:So I would say like two years prior to COVID is when I started to think about it, you know. So we're not very active, like a lot of people know us, because the internet, like we're not out at events ever. I mean, I just met you guys. I've been around quite a while now. You know we just don't do that stuff. So we're very. You know, we rely on SEO and work more behind the scenes. You know we're it's wild.
Speaker 2:But two years prior to that I start talking about it, you know, because I'm seeing it in the conference circuit and property management. I'm seeing all the, all the big boys do this and I'm just like, ah, we're not ready for that. I don't like to be on the cutting edge of things. I think it's, it can be lucrative, but you're playing a dangerous game. When you go even with chat, gbt, which I've largely implemented, but I waited six months, I'm like, let me just see, let me make sure this isn't a waste of my time and the four version that you pay for is way better. Yeah, we have that. It's great. We do our listings and all kinds of stuff with that. It's fantastic. But but yeah, I mean I was talking about it for a while, because margins and I'm just looking at it it's like owners are being beaten us up over management fees, like wanting to pay a hundred dollars flat when it's like, man, you're rents like three grand, like it's you one, you can pay more than that. You know to we can't run with a hundred bucks a month. It's not gonna work, you know, having to pay the PM and all the rest of our team to do all the work, and so I started to think about it. But when COVID, it's like, okay, we have to do this.
Speaker 2:Now, you know, we're watching other companies just get destroyed out there, and companies that are bigger than us, companies that are smaller than us, it's. It got very expensive. Inflation went through the roof, everything went up. You have to get your cost down somehow, and so naturally we went with the easiest things first. Like what are the things that aren't as scary to do? And for us it was entering bills. My constable, it's like how, how hard could that be? You know, you get, I could do that at my house in my boxers, right, so I can't someone in Mexico do it in theirs, you know. So we started with accounting and we stuck with accounting, and it was through a placement agency. We used three different ones initially and it went pretty well. There was high turnover, crazy high turnover, and so our average staff member has been with our company for a little over two years, which is pretty solid. We were having PMs leave every month and account accountants leave in every single month.
Speaker 3:What was the reason for that?
Speaker 2:It depends what country you're dealing with, to be honest with you, and I don't know how to say that nicely, but it's it's. It's a culture thing I feel like largely like, for example, in the Philippines. It's just there's more like obedience there. They're used to being treated much differently than than we are here, and there's there's like issues with illnesses and things of that nature like major crises. Crises are happening all the time.
Speaker 1:You know natural disasters, you know typhoons funny that my power outages and my guide might be a the other days like Telling me that they just had a freaking 7.2 earthquake.
Speaker 2:He's not lying. They had a Mexican all time.
Speaker 1:They had to like go to like some shelter for a couple hours and I'm like holy shit I.
Speaker 3:Okay, what country? In Philippines? Oh yeah, dude there, yeah Carl, yeah, hey Carl.
Speaker 2:So so there's literally been countless, countless times that's happened, like where an owner will not not the owner calling constantly, but we've had situation where an owner a call hey can't get in touch with so-and-so, and it's like they're in the Philippines. Man, they're, there's black out there right now. That's something you got to deal with, and so we're very we learned. The first year was a massive learning experience. I think we did great, and I don't think we had much of an impact in terms like losing property or pissing people off or anything like that.
Speaker 2:But you start to learn and you start to screen a whole lot better, and so what I did, naturally, is look at what all the staffing agencies are doing. Just do it in-house and do it better. You know, screen the heck out of them. Make sure their internet is fast, make sure they can type very fast, make sure they can speak very good. You know, get introduction videos from them before you ever even call them and waste your time. Have them do write-ups about various different things to make sure they know what they're talking about.
Speaker 2:I don't care if they're actually using chat to beauty or not. You were smart enough to do it and send me the right information, weren't you. So that's kind of how I look at it, but our screening is heavy on that. Now we use online jobs. Dot ph is a really good web site. It's like 99 bucks a month and you literally have profiles of people on there, and so if someone screws you over, go on there and put a post about it. Now they're there, their review is gonna drop and I'm not gonna hire him because what happened to you? You know you can't do that here, right? If only you could do that with ten ends, right.
Speaker 2:Don't you know you can't do it. America is different, but over there it's, it's different.
Speaker 3:So what other countries Do you have, the Asian, besides the Philippines?
Speaker 2:So it started with the Philippines. Only then we went to Mexico. We're in Jamaica, kenya, I think we have one in Egypt right now. Canada, we have one. It's maybe Britain or something. We're all over now is.
Speaker 3:Are there any areas that you find more beneficial based on the time zones and other Reasons?
Speaker 2:yeah. So time zone doesn't matter, because they're gonna work our schedule right. It is a problem with holidays and whatnot, and what I always tell is hey, we have these holidays off, you don't have to have the 4th of July off, it means nothing to you, that's totally fine. Take off your holiday, switch it up, no big deal. And then anytime somebody's off in our company there's a backup. So you know, we may or may not let the owner know that, depending on how long they're out. If they're out for a day, don't need to let anyone know. Just if something comes in, they'll take care of it. You know, if they're out for a month, well, yeah, we're gonna communicate and make sure you know what's going on. So so, yeah, I mean, it just depends.
Speaker 3:It just depends on the area so growing a property management portfolio from 1,000 to over 7,000. Are there like breakthroughs and are there parts where, let's say, you're at 1,000, you get to 1,500, and then at 1,700, you start losing money until you get to 2,000, and that's when you start making money again? Did you see that in that growth? Yeah, man.
Speaker 2:We cracked the foundation so much back in, like 2015 through 2018. That was our learning years, I would say Heavily, heavily learning about. Look, we're all young Like at the time, I think, obviously early 30s, late 20s, like I took some years off to parties. So it's like we're figuring this thing out and the owners only two years older than me and our average staff member is probably 30 in their young 30s or something like that. And so we're young, we're hungry, we work hard. You know we do all those things, and so we're always, always, always, looking at the bottom line.
Speaker 2:We are so critical of the financials. I'm bonus on it. Other people are bonus on it, depending on your role. Everyone's incentivized in our company, for the most part, to do a really good job. Not we're gonna fire you if you don't right. So incentivize, incentivize, incentivize. And naturally people want your margins to stay low or, I'm sorry, your margins to stay high. They want you to make money, and so if everybody wants you to make money in the company because they wanna make money, it's almost like they feel like they're part owner, even though you don't have the equity of a profit share. Maybe you know you get a percentage of your maintenance income or whatever it is. They're essentially running a business within your business, and that gives them that kind of that feeling of I'm running my own thing, even though it's almost like a franchise field, though, where it's like, hey, you need to do it this way, but do your thing.
Speaker 1:So what would you say to somebody that was like just starting out? They have a couple of properties under management. You know five properties under management. What's like step one on growing a property management company.
Speaker 2:Yeah, I actually didn't answer your question fully. Let me get back to it really quick.
Speaker 2:No, no, no, that was on me, so it's tough what I hear. So I got there at the thousand unit mark. What I hear is about 250 is where you start to struggle pretty badly and it's like it's not enough to bring on the staff I need. Right, cause I said you need what want. You're gonna need two PMs, but you really want two PMs for over 300 doors. You're overpaying a little bit and that's hard for someone that's small and so you know you're gonna need a tech or two. That's great cause they're gonna save you money.
Speaker 2:You know like you don't want to outsource when you can pay someone you know market or whatever. You're gonna need someone to do your books. Is that gonna be? You Probably not Get a VA to do it Now. You just got the VA to do that. So clearly you were doing that for a while and you're like man, this thing start to get to a point where it's like a feel, you just feel it in your business. So there's no hard numbers in my opinion. When you get to different employee numbers, that becomes a problem. So when we hit 50 staff members, maryland starts to change the game on you.
Speaker 2:Now you gotta provide certain benefits and do different things, and that was a whole experience. Now you're getting audited every single year by either the state, the Fed, whoever Cause. Why the hell is your company growing so exponentially? Look, look at the SEO, look at the work you know. So there's breakthroughs that happen, but all along the way you need to be looking at your bottom line at least every month. What is our profit margin? How do we do in comparison the same month last year? What can we do better? Why did we spend money there? Be hyper critical of that stuff. And then your question about the yeah, yeah, yeah.
Speaker 1:So if you're starting out now, you got a couple of properties under management or you just have your own properties. What is like the step one to starting to grow your property management company? Are you immediately starting to hire people? Are you building a vendor list? Like what is your kind of step one?
Speaker 2:If I was doing it from scratch right now, I mean I would know how to do it, cause, again, I didn't start this company, but I know how to do it. First thing I would do is a ton of marketing and get it to the point where there's my phone's ringing so heavily. I can't take it. That's a good problem to have. Now you just throw money at it, right. So just hopefully you have that. So it depends on where you're coming from. If you got a couple hundred grand to play with, throw it at marketing.
Speaker 3:What kind of marketing, though?
Speaker 2:SEO, big time SEO man. Where look up the stats after this? What percentage of the time are people on Google? It's insane, and what percentage of what At the time? Your time are gonna go good right here. Yeah, look it up Google and then look at the top apps that are visited daily. Google is absolutely crushing everything. It's not even close.
Speaker 1:It's like they're running a marathon. So when you say SEO, you mean just like getting your website dialed in to a point where, when somebody types it into Google, it's coming up right away.
Speaker 2:Yep. So think about it like a brick and mortar in the most popular area in town. So you're getting everyone that's walking by you right? You wanna be there? Yeah, look at this, it's insane 99,000 search queries every second.
Speaker 2:That's crazy 8.5 billion searches per day. If you can get.0001% of that, you're in pretty good shape, man, and we have owners in Antarctica. We have owners all over man. More people are. We're a global economy these days, so you can do this stuff from anywhere. I know wholesalers that are doing this all over the world. They've never been to these places before, and so Google's the way to go.
Speaker 2:Search engine optimization Get your website like you would your building when people are walking by going ooh like. Make your website like that. Make it dialed in in terms of like the link building and all that. I'm not an SEO expert, by the way, so people will listen to something like this. Patrick focuses on that.
Speaker 2:I'm more of the operations guy, but I do know when you go to Google, those paid searches at the top. We did that for a long time. We have the TPC. You know each time they click, you pay. Some people will. Your competitors will click, click, click, click and ring it up. We've had that happen.
Speaker 2:We tinkered with that and I think we still do it, but largely the organic searches and the map listings when people are searching and we're really dialed into keywords. We know what people are searching for based off Google algorithms, google I forget what it is, but anyway we know what people are typing. We wanna rank first and so we're gonna have content all over our blogs and everywhere that basically has those keywords that the more information you give my understanding to Google that is valuable, like to the people that are searching the more they're going to like you and put you up front. So if you're going to my website and you're learning something or you like it and you're staying there, they're going to like you and they're going to rank you higher. We do really good about that.
Speaker 3:We come up first everywhere and everything and that's like an individual or company that you guys hire to handle all of that Initially.
Speaker 2:for, like the first five years maybe four years, I don't know exactly we tinkered with a lot of SEO companies. Then Patrick decided to become an expert himself and he's like, oh yeah, they're not doing it right, Not?
Speaker 1:even close. So okay, but now you got great SEO and I have a ton of people calling you Non-stop what's next? Because that could be overwhelming, okay, so we're still in the beginning phases.
Speaker 2:Okay, so calls are coming in like crazy. You can cherry pick them right. Like, hey, sorry, I'm not. You know, when we tried to go up into Southern Pennsylvania this is a good example we tried to get up and hand over and whatnot. The margins aren't there, the rents are too low. It's hard to break through a new place without buying a place there or having some type of presence. It's very, very difficult to do that. So it's okay to tell somebody hey, you know, I know you found me online, I'm not taking more clients right now Like it's not a big deal, like the problem, that's a problem you can fix. And so then you go out and hire a business development manager, someone that's going to take that on for you, and you pay them 100% commission for every new property. You sign up Whatever amount of money 250, 350, 500, whatever you want to do in the beginning it could be stupid high just to get the business in because, property management is residual, and so that really helps have that residual.
Speaker 2:So business development manager I would do. First I'd be working with realtors to do all the leasing for me and then at a certain point I'm going to stop using the realtors, I'm going to bring in my own leasing agents and then, behind the scenes, as soon as my wife or whoever's doing my books and stuff for me my marketing can't do it I'm going to bring in a VA to start doing that, and so that's kind of the flow I would take with it personally.
Speaker 3:So would you have a real estate team and bring the leasing agent on to it?
Speaker 2:Have a real estate team.
Speaker 3:Or would you? Just because you said you would hire out a leasing agent who is just like independent agent, but then you would hire and then bring him in in-house.
Speaker 1:So then just bring in a full-time leasing agent. Yes, like somebody who just full-time that just does leasing.
Speaker 2:Yeah, so in Maryland you don't need to be licensed to lease up property which is great.
Speaker 2:In Pennsylvania you do In Northern I would say Northern Virginia, because that's where our office is. In Virginia you do, but in Maryland you don't, which is where a lot of our properties are. So you can go hire the guy working at the shoe store sales and as a matter of fact I won't say his name, but he's like one of the best agents we've ever had and he's been here for six, seven, eight years I don't even know now and he just dominated at shoe sales. So our leasing manager at the time was like you need to come work for us. He's great. He's a letter company in leasing, I think once or twice, and he's always in the top three. And so you just bring him on and you pay him commission. Hey, for every, for every lease you sign and you move in. Once you hand in the lockbox and in the sign lease and all that jazz, first month rent and whatnot, boom, you're going to get a commission on your next payroll. So they are employed on commission but they do very well for themselves.
Speaker 3:How do you guys market the bacon units?
Speaker 2:Through Appfolio, which indicates to like 50 other places on the MLS Craigslist. We're not doing as much these days because Facebook marketplace kind of took over there, but that's the primary ones.
Speaker 3:What would you do if, going back to Ryan's, like if you just started out, you have five properties? How would you market in that scenario?
Speaker 2:Facebook marketplace 100% in Zillow. 99% literally 99% of our leads come from Zillow.
Speaker 1:Yeah, same.
Speaker 2:It's insane, we see it in Appfolio. It's nuts, it's a lot I hate the MLS too.
Speaker 1:Like I always talk about market, this was the markets before. I hate it because I don't want another agent involved in my fricking $1,500 lease. It drives me crazy, it's so frustrating that I have to pay you by law anything. If you're the buyer's agent for a tenant, you're already just no offense, bottom of the barrel agents. Oh for sure. Yeah, I'm just paying you for nothing, but it is like something that we promise our owners want.
Speaker 2:They want more exposure, but I'm going to waste my broker's fee.
Speaker 1:I'm going to waste this and hopefully I'm going to pay some numbskull to yeah yeah.
Speaker 2:And the big problem with that, and we use, especially in the Virginia office, we use so many agents. You have to be licensed there. It's hard to find agents to come lease units for you when they could go out and dominate selling property and whatnot. So, yeah, I mean the big problem I have with the agent stuff. And they have the same problems, right, they don't like to work with us. I don't think a lot of the time we hear complaints all the time the communication problems, right.
Speaker 2:So when our agents are communicating, I told you we pass off the PM. They're then working with the agent. The owner knows our agent, so they're with one person, the whole two people, with the PM and the agent. There's communication every week on showings, applications, feedback on the property, price reduction ideas, all of that stuff. If they're going to throw incentives, the whole nine. And then when they move the tenant in, it's a good experience. They get our move in packet. They know how to operate the property the way we want them to operate it, the way we've told the owners it's going to be operated. Sorry, if that went out. Basically, when you have a realtor or an agent, that's not happening. They're making promises to tenants sometimes.
Speaker 3:Oh yeah, they'll paint that room, no worries, look at that done when you move in. I can't tell you how many times that's happened. Who goes over that? Who reviews the applications?
Speaker 2:Yep. So we have application processors. Right now we have two that do the entire company. So you never want to have your applications approved by your agents. They're just going to move anyone in. That's a conflict of interest in a major way. So actually the owner's mother still to this day does a lot of them. For our offices we have very strict requirements. We're more strict than most, and so we get complaints all the time from tenants. I got a 620. You need a 640. I'm sorry, it's just fair housing, man, be careful. So strict requirements and you'll be good to go.
Speaker 3:So what's the minimum you guys require? 640?
Speaker 2:640 right now. Yeah, I think back in the day it was like 600. We've just continuously increased it since COVID, really.
Speaker 3:So how much difficult is it to find those tenants at 640 than it was back then, maybe when you had at 600?
Speaker 2:The tenants at 640 are more challenging. For sure, people are ruining their credit these days and at least from what I see. I don't know the data on it, but I can just tell like the amount of denied applications we get isn't obscene, it depends on the area. So if you're marketing in can, you're gonna get a 700, 750, 800, like that's no problem. I rarely see a 640 in those those nicer neighborhoods, right. But if you have a property saying pig town or something I like pig town, I would live there back in the day You're getting a 640 is gonna be hard. You know a lot of time. You have young kids going to college and whatnot. They don't even have credit. So you have co-signer situations and whatnot. Heck, you can even get people from China coming over. You get people from all over the world coming over Hopkins it's like they don't. They don't have a social security card, but we have ways to manage all that.
Speaker 3:Do you guys ask any preliminary questions before running them through the application process to automatically eliminate then?
Speaker 2:Oh yes, tenant Turner, if you haven't heard of it, is fantastic. We're actually just implementing it now in one of our offices We've had in our Philly office. I just didn't know anything about it because I just started working with that office recently. But tenant Turner does all that for you. So they go to your list and click boom, and you're immediately Pre-qualified. Right then in there they're asking all the questions and if you don't want to answer right there, cool, call the number and then you're gonna get like a dialing service That'll basically do the same thing and then you can click three to get to the agent. The idea is, as an agent, you don't want to pick up the phone a million times to waste your time Pre-qualifying tenant Turner.
Speaker 3:is that? So you send a link to the potential tenant and they go through it and that's kind of just like Eliminates them or exactly the next step?
Speaker 2:Yep, so it integrates with that folio right now. And so when you go to one of our listings and you go to inquire- it's taking you to tenant Turner now and it's basically like an automated it's. It's not.
Speaker 2:Okay, it's it's your answering questions and, as you go through, boom, boom, boom, boom and then if you want to showing and you're pre-qualified according to our criteria, that it is an automation Then you can schedule showing directly with the agent who, tenant Turner, has the schedules built in the background, so you know. And then once they, once you schedule the agent, will get an email and they click approve or don't approve, or modify or what have you, and you can allow so many like people to go to a property at once, which is great, so you get like 10 people at a time really is what you want to do.
Speaker 2:But it's great, I turn is awesome.
Speaker 1:Yeah, I'll look into that. Yeah, I don't know that Cody uses tenant Turner. I'll have to figure that one out.
Speaker 2:It's a no-brainer. I think it's like a buck, a unit per month or something, and it literally takes all of the calls and admin work. I know we have like a.
Speaker 1:Questionnaire. Yeah, we probably magic questionnaire, whatever it is.
Speaker 3:Yeah.
Speaker 1:Through AppFolio. But yeah, I don't know about that. So are you investing yourself? Do? You own some properties as well. What? What does that portfolio look like?
Speaker 2:Yeah, so up until Last year I would consider myself not very risk-averse, or I'm sorry. Yeah, yeah, I invested in index funds forever, just index funds. I read what's the book that got. That got me into this years ago. It was a Bogle Jack Bogle's book, I forget the name of it, but basically he's like all you need to do is buy an index fund and the S&P 500 or VTS a x and write it out.
Speaker 2:Ignore the noise, ignore the, the news, ignore everything. Don't listen to what your body is telling you, don't listen to social media. And it worked great and I've done very well with that. But Last year I just kind of looked at it. I'm like We've got like 6,500 properties. At the time I'm like there is a literally a treasure trove sitting right under me that I could have access to at any moment.
Speaker 2:Obviously, I'm not the owner, so I would have to go to the owner and work out an arrangement, and so I was able to acquire a few deals that way. So when you, as an owner, terminate services and you're like, hey, I'm selling, you go to our website, you put in a form and we get you know. It's a survey as well, so we know how happy you are. If you were pissed and you're selling, probably not gonna call you. I mean I'll send you like an apology I sure will and I'll make content, but I'm not gonna ask about your property. It's obviously you don't like us, right? I get it. But if you're selling and you know you just want to get out of the market your tired landlord, whatever, I'm gonna try to get the property and have BMG manage it. And then wholesalers I've worked with them too.
Speaker 3:So how often are there landlords who are just you know tighter dealing with it, wanting to sell?
Speaker 2:daily, Literally daily. Man tired landlords are nonstop. Especially depends on your area Baltimore and a lot of what I will talk about is Baltimore. That's where we are right here. Baltimore is a tough market to be in for rentals. We don't even manage in like 70% of the city at the moment. We used to take on any and everything. We manage everywhere and one. The margins are there. Two year in court every two seconds lead paint lawsuits. It's it's not worth it. As a property manager, you are literally throwing yourself in front of the owner and shielding them from the tenant as much as you can. Essentially they're gonna sue you both ultimately if something happens. So you know we try to avoid. Avoid the tough area is the best we can.
Speaker 3:So what happens to the the properties of the landlords who want to sell? When they come to you and say, guys, I'm, I'm tired of being, you know, a landlord or owning this Property, do they offer it to you guys? Or they just say, hey, who's a good agent that I can list this property with?
Speaker 2:you, you know what we find, and so I didn't know this until last year because we didn't, we didn't tinker with it, we just let them go. And then I think someone said something to me one day why are you not monetizing that in some way, shape or form? Refer to an agent, do something with it, hard money, lender. What do you need? Insurance, like, certainly make money on it. You know, we just never did that. We just let them walk out the door. We didn't feel the need to do it, and so we started capitalizing at last year and basically the Nine times out of ten. What I find is that when owners go to sell, they don't even tell us first. It's already on the market, which is crazy to me.
Speaker 2:So, we're actively managing and usually they went till the vacant and so it's in turn, right, we're working on the property, we're getting it prepared, and then we get in. We get an email or a form that says I'm selling, and then we go look online. It's like this has been on the market for 30 days. I never told us that. Nine times out of ten they already have an agent from when they bought the property, and so by the time we get in there and we say, hey, we can help you out there like no need. I already told John that when I sell it he'd have the listing, so that that certainly creates a challenge for us. But we did put a new clause in our PMA first right to sell, so we'll see how that goes. That's new.
Speaker 1:Yeah, we, I think we have that in there too. We've had that in there for a while, and and if somebody's like hey, look like my uncle's yeah, I'm like okay, great, yeah, we're not gonna do a tease about it. But I think we try to take, you know, every piece of that, a little piece of each.
Speaker 2:Absolutely and as you should. I mean the people should understand that, yeah, you are a resource, you know a lot of people, you can connect with whatever you need and everybody wins so you mentioned turnovers, when, when, in the process of a turnover, who goes to the property?
Speaker 3:and then, yeah, how did they determine? When it's, you know, an owner's property, who you're managing the property for, who determines what work is going to be done and what work isn't going to be done? That can be, you know, fly by, yeah, so I can take you quick through the process.
Speaker 2:So when you as a tenant give notice to vacate or skip out on us, essentially it triggers our workflow. You know our checklist for each team and what they need to do, and so it starts with scheduling the move-out inspection. So typically you're gonna give notice now, you're gonna move out January 20th or so 60 days out, the, the remember I said the tickets go to the maintenance coordinator and then you put it on the calendar. Same same thing with the, the inspections and whatnot, and so that tech knows two months out generally that it's the maintenance tech they're gonna have a move-out inspection to do. We found agents, even some property managers. A lot of people don't have eyes for what should really be done. The tech seem to have the best eyes, not always, you know Some people, some people are pretty thing, you're crazy. The agents, they know it's fair but they also don't want to sit there and nitpick a property and go through everything and check the plumbing under the sink and all that jazz. So our tech will go out do the inspection. They will in at folio. So the report gets shared with the PM. The PM will go through and look at all the flagged items that the tech indicated needs to be done. The PM will then call them if they need to and go over it and then when the tech submits the the inspection report the bottom it'll give their estimate. So, as they're already going through it, you know They've got a quote prepared so that immediately goes to the owner Within 24 hours of move out. The owner already has 48 hours.
Speaker 2:The owner has a quote and an inspection report to view and at that point we let the owner decide. Hey, you know, we can do it for 1200 bucks, 1500, 5 grand, depending on how much of a mess it is. Do you want us to do it or not? And we can do it in-house. Great, 90% of time we're gonna be cheaper than a contractor. We're welcome, we'll get you more quotes. It's a waste of time. We should really focus on getting the work done and getting your next tenant in. But certainly some people want three quotes and it's like, all right, there's a week of vacancy.
Speaker 1:You know Right, that's 30 bucks. I think that's a few bucks, but definitely overlook the time it takes to get that cheapest quote in there. Get it done.
Speaker 2:It's like it's a lot you do all that.
Speaker 1:You've just wasted a week, like you said. Are two weeks like okay. Well, you just spent how much on your mortgage? Your mortgage? What 1500 bucks like you just wasted seven, all the holding costs, man, I Tend to not look at things in terms of the expense.
Speaker 2:I look at it. What did I? What's the opportunity cost? What did I lose? Here I lost, let's say it's a three thousand dollar rent. $1,500 is gone that I could have made right there. That's gone and that's a lot of money to be tinkering with right there. That's a big difference. That's your leasing fee to the agent you just let. Now you're paying it twice For some just wasting time.
Speaker 1:So what are your some of your goals going in? We're about to end here 2023, yeah, and starting 2024. What are some of your goals for 2024, personally and for the company?
Speaker 2:Personally is get my button better. Shape man COVID really got me. I've always been very athletic sports, you know, not super competitively, but I've always engaged in sports. I told you I'm playing basketball. After this had a son 15 month old. You know he's a lot of work, but I certainly let that get to me. Probably drink a little bit more than I need to got a belly never had a belly in my life and Welcome to the club.
Speaker 1:Yeah, boy, I.
Speaker 2:Know what it feels like man, it's a, it's a thing, but anyway. So yeah, get my butt back into shape is really my big priority, physically, mentally. The whole nine and you know, read a lot of books. You know, when I'm in good shape and I'm feeling good and drinking a lot of water, you know I'm reading a ton and I haven't read a book in a month, which is not good. I should be reading one a week is what I'm accustomed to, and so that's for me. And then and continue to buy rental properties. Man, like I'm trying hard, I'm not finding a lot of good deals. That's the problem. A lot of people are, you know, especially me just getting into the scene here. You know, locally, with people knowing me, people already have their, their crowds and stuff. I'm trying to. It's hard and I tried to go in the cold calling route and do my own wholesale and thing, it just crashed. I didn't.
Speaker 3:I need someone that knows. Do you have plans to go after the ones that you guys manage, who the owners want to get rid of?
Speaker 2:Oh yeah, I can't go after them because I'm it'd be a conflict. Some employee there?
Speaker 3:Well, I guess I mean, I guess I know there's like a line between like going after them and them saying, hey, I want to get rid of this property. Can you help me with that?
Speaker 2:Oh, certainly so. Anytime they want to get rid of a property, I'm the first one to call probably after the PM to understand the situation. But I get all of the emails. So every day I get at least one or two between the whole company and I'm like, oh, okay, and solace point, cool, yeah, I'm gonna call that guy right now. That's perfect. And see what, see what's up.
Speaker 3:So I have to two more quick questions. So make it quick.
Speaker 2:Yeah, why are we?
Speaker 3:percent of the portfolio is section eight versus market tenant five to ten percent.
Speaker 2:Section eight probably definitely closer to five percent. We don't do much. Section eight at all.
Speaker 3:Gotcha. And then, at what point do you guys follow a failure to pay?
Speaker 2:Failure to pay rent depends on the jurisdiction. So that's, that's something you in property management you have better have a good attorney. You will get your ass jacked up in two seconds. And we've been jacked up, you know. Look at the records. We've been hit and it's stupid stuff. Like we weren't following that lease Exactly how it said and the judge interpreted it one way. It's crazy. So have a good attorney and make sure you're buttoned up with that stuff. You can get yourself in a whole lot of trouble there.
Speaker 3:So I mean in terms of like, if the tenant hasn't paid rent. And now it's the 10th of the month, yeah, do you guys file on on the six? Do you file on the give them?
Speaker 1:Of saying in different jurisdictions yeah.
Speaker 2:When you can charge late fees. So in I'm gonna quote this wrong pride, but I believe in Philly you have you charge late fees in the 10th. I could be wrong on that. There's so many jurisdictions now, there's like 30 counties probably, but different cities, different states, different towns. It's dude, our Laurel office has PG Montgomery and a Rundle DC. I don't. I think I said how. I don't know if I said Howard, within those there's townships. I have one rules.
Speaker 3:I guess I'll simplify that question. Then do you guys file as soon as you're legally allowed? To yes, okay, 100% let's say, for example, baltimore County, baltimore City. You know you're late, after the fifth, you'll be following on the sixth the moment we can file, we are yep.
Speaker 2:You get in the way. So our company, everyone's talking leading up to that that the first, for sure, because that's when rents are due and then leading up to the sixth rent week is like we're swamped man. We're following up with tenants owners gonna call on the six check with that time to make sure they pay.
Speaker 3:Like we're really scrambling at that point you guys call the tenant first on the six before filing, or you?
Speaker 2:just want to make a second.
Speaker 3:Oh, just okay.
Speaker 2:Yeah, so we have a lot of automation, so FLA is great with that.
Speaker 2:They'll continuously notify them leading up to rent being due, and then even notify them that rent's late. But every Friday RPMs are to call the tenant if they haven't paid Each one of them and put the notes in our system. So then their manager can rip through the delinquency and see what's up. But to answer your question, yeah, man, we're with fair housing. Especially when you get bigger, you have got to do things across the board the same way and just follow the book. Try to veer away and be cute about anything. If you can file on the 10th, if anything, make it later. Don't dare try to do it a day early. You get a good slap on the hand there.
Speaker 2:So basically we're filing like probably 10 days a month and we use eviction assistant to do that. It's a company called Everett down in Columbia plugged to them. But they're fantastic, man, they have all of our information in there. It's a few clicks and they're doing everything. They're sending their agents and doing all the work for us.
Speaker 3:Nice.
Speaker 2:Yeah, you don't need an attorney. You don't need to hire any sorry attorneys.
Speaker 1:Yeah, yeah but the attorney is important too, because we just had other things.
Speaker 3:Yes.
Speaker 1:Yeah, we just had an attorney on last week, diana.
Speaker 2:DK log she's great.
Speaker 1:Yeah, she's really good and she like opened up my eyes to a couple of things. I'm like, god damn, I got to change up a little bit. A little bit of stuff that I'm doing, oh, a lot of stuff. I'm sure it's hard to protect yourself, we're all doing stuff wrong.
Speaker 2:We don't even know everyone.
Speaker 3:If you find me.
Speaker 2:One person, as in property management with this, isn't selling. You know basketballs. There's a lot of stuff going on in here and it's changing all the time. During COVID I can't even like remember the last three years, because the roller coaster of you know all these different acts that were coming out and changing. Oh, now you can't file. Now you can. Oh, now you got to wait.
Speaker 1:Oh, now you're running your money from the city and the all those different programs.
Speaker 2:God, that was such a nightmare.
Speaker 1:I'm still waiting on money from the friction and eviction prevention program. Oh yeah, it still hasn't paid me.
Speaker 2:Yeah, yeah. So it's a challenge and I encourage anyone that is in property management to ditch the clipboards, ditch the paper, go automated, go solutions that connect your team together, go workflows, because when things change, like a few years ago, hey, now you can't file until the eighth. Okay, what happened before that was email the whole company. So they know and hopefully they do it right. That's not the way to do it. Now, follow the workflow and we'll see if you're late, we see if you mess up.
Speaker 1:I see a dashboard constantly, so you know you don't want to think about that, apple is really good at that. So, like if you're out there and you have a significant, you know, I think you need 50 properties minimum, or 50 units.
Speaker 2:I think it is 50.
Speaker 1:As soon as you get 50 units, get into AppFolio.
Speaker 2:Something similar yeah.
Speaker 1:AppFolio. I just I went for building to AppFolio and it was just. It's so much better. It also is like it is what you feed it.
Speaker 2:Yeah, oh, absolutely the big part. There's a lot of limitations and it's a one size fits all deal, but certainly at a minimum use that and then, until you figure out what you don't like and use something else. But yeah, you need a good software man. Yeah, you need a great software, yeah.
Speaker 1:Well, Tony, I appreciate you coming down and talking about your journey here and property management. It's always fun talking to another property manager and hearing the similar problems and fun stuff that we deal with on a daily basis. So yeah, definitely. We also want to announce that we have another event coming up. Yes, we do January 11th January 11th, six to nine CVPs in Towson.
Speaker 3:Upstairs.
Speaker 1:Upstairs. So if you're looking to sponsor, hit me up at Ryan at PEPropertyManagementcom and let me know, see you guys there. See you, guys, there.