DGS 59: Scaling Maintenance in a Property Management Business

Are you a property manager? Is maintenance your biggest cost or time suck? Does it keep you from growing your business? You can’t expect to grow a company when you’re stuck in the operations piece of it every day.

Today, I am talking with Ethan Lieber of Latchel, which helps property managers with maintenance and growth. You can get stuck where you have to hire and hurt your margin or you’re growing and just can’t keep up. You’re behind on work orders and that’s not good for anybody. It’s not good for your business, tenants, and property owners. Latchel builds solutions and services to try and fix that problem.

You’ll Learn…

[07:10] When thinking about the growth of your business, that comes from the way you acquire your customer scalable and how you get scalable lead generation.
[08:00] Frontend/Backend Scalability: If you’re only bringing in new customers and increasing units, there’s going to be a problem if your operation can’t handle that growth.
[08:25] Latchel focuses on making maintenance scalable; grow without worrying about creating your margin or being able to fulfill any promise you’re giving to customers.
[08:45] Latchel realized that technology is support for a process, but it can’t be the process; so it offers maintenance software backed by an actual human-based service.
[14:00] 3-step process for a call: 1) Determine if it’s an emergency or not; 2) Send possible emergencies to in-house team member; 3) Send out a vendor/contractor.
[15:35] Companies should create a preferred vendor list/network to send out vendors that they partner with when bandwidth is not available.
[16:35] Human Side vs. Automation: Beautiful thing when you can combine expertise and the human mind with technology; use technology to reduce inaccuracies.
[18:55] Types of transformations of early adopters that implemented Latchel to offload maintenance with phone calls and coordination.
[22:35] Property managers are careful about giving something up; if they want to grow, they have to delegate, give up control, and use a vendor network.
[26:10] When Latchel works with any customer on taking over maintenance, Latchel builds boundaries to work under and sets clear expectations.
[41:00] Latchel makes life easier for maintenance coordinators by earning trust; transparency becomes important, especially through documentation.
[44:50] Latchel works with property management software through an add-on service, but is looking into API connections to integrate with existing systems.

Tweetables

Latchel frees you up to grow but keep your margins healthy

Resources

Latchel

Homey

Keep

Property Meld

SuperTenders

EZ Repair

AppFolio

Propertyware

Buildium

Rent Manager

Rentec

DoorGrowClub Facebook Group

DoorGrow Live

 

Transcript

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

DoorGrow hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not because, you realize that property management is the ultimate high trust gateway to real estate deals, relationships and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners.

We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win. I’m your host property management growth expert, Jason Hull the founder of OpenPotion, GatherKudos, ThunderLocal and of course DoorGrow. Now, let’s get into the show. So today I’m hanging out with Ethan Lieber of Latchel and Ethan, welcome to the show.

Ethan: Thanks, I’m super pumped to be here and be a part of the DoorGrow club on Facebook. I’m excited and pumped to be talking to some of your listeners and I hope we can get some good information for them.

Jason: Yeah, absolutely. So tell us high level what is Latchel for those listening and then I’d love to get into the back-story.

Ethan: Yeah. At a high level what Latchel is, we help property managers with maintenance. So we have kind of two levels. One is your basic 24/7 and after-hours emergency maintenance where we take all the tenant calls. We have action and house team of property managers that will troubleshoot anything that might be an emergency and of course dispatching for it. It might be your vendor network or it could be one of the Latchel partner vendors. Then the second thing we do is extend that to coordinate our recorders. So that could be nonemergency, it could be even unit turns, it could be getting estimates or bids and things like that. That’s at a high level of what we do.

Part of the reason we do it is to help property managers focus on growth. When we actually started the company, the thing I kept hearing from property managers was, “Well, we’re kind of capped out right now because I couldn’t bring in more maintenance because it would be too much time spent on maintenance.” So we want to solve that problem.

Jason: Awesome. I mean it is a problem. Property managers get to a certain door count and then they think, “Man, I need to hire people in order to handle more.” Or they’re doing it all themselves initially, or they got one maintenance coordinator handling hundreds of properties, trying to figure this out and that person is about to break a lot of times, they’re stressed out.

Ethan: Yeah, you can get stuck in this place where you either have to hire, and now you’re really hurting your margin because hiring is expensive or you’re growing and you just can’t keep up, and now you’re back lagged on work orders and that’s not good for anybody. It’s not good for your business, it’s not good for tenants, it’s not good for the property owners. So it’s a big problem. We build things and solutions and services to try and fix that.

Jason: Yeah. Ethan, give us a back-story. How did you get into running this property management maintenance-like solution. Did you wake up when you were like eight years old or six years old and you’re like, “I want to do this. This is what I want to do.” Or how did you go into this? There’s got to be a story here.

Ethan: Not quite. I think like a lot of property management entrepreneurs, sometimes you just kind of go with the time and you get caught up in something and you look around and you’re like, “Wow, how did I end up here?” that’s kind of what happened to me actually. I was working full time in software and mobile applications for the lead gen space. Basically, I was building applications that connected contractors and homeowners. All pure software solutions and my co-founder Will Gordon who is our COO called me one day and he kind of pulled me into the property management space.

My family has always had a history in real estate. My father was a real estate agent so I was familiar with real estate, how property management work. Will is in this position where he had just taken over managing his property management company from his family. It’s a small company of about 30 properties. At that time he was actually also working full time at Amazon and he basically contacted me to see if I knew any solutions that would help them with the maintenance side of things because that’s what kept pulling him out of his day-to-day.

We went looking, we didn’t really find anything out there to help and this was back in early 2016 that landscape’s a bit different now of course. So we went to actually talk with about 50 different other property management companies, some of these are really small, five to 20 units, kind of fresh start property management companies. We talked to a few large ones, the biggest one was 4,000 units and this was in the Southern California area.

What kept coming up and talking to these property managers was that maintenance was either their biggest cost, their biggest time suck, or it was what was keeping them from actually growing their business. We looking at Will’s property management company was the same thing. It was maintenance that’s let everything down and pulled him out from his day-to-day. You can’t expect to grow a company when you’re stuck in the operations piece every day.

Jason: Biggest cost, biggest time suck and biggest preventer of growth. I mean that’s a pretty strong problem to solve. Usually property management get the maintenance side and then you got the leasing side. I think every property management business owner needs a solution on both of these. They need these two major pieces to their puzzle besides just their property management back office or whatever tool they’re using because usually those don’t do either of those very well.

Ethan: Yeah, I mean you have your bank softwares that do you sort of that accounting ledger, the system of records but what’s sort of missing from that landscape is the piece that actually makes your operation more efficient with leasing and maintenance being the two big ones. In a way when we talk about these things, about how do you do operations more efficiently. Really what we’re talking about is how do you build scalable property management practice and what scalability means.

It’s sort of like a stress test and I’ll give some of your listeners can actually use this to start thinking about scalability and that’s this. Imagine your property management company suddenly grew two X tomorrow. So if you have 100 properties today, what if you had 200 properties under management tomorrow? What would break in your business? Those things that would break? Those are the things that are probably not scalable. When you think about the growth of your business, that can actually come from two sides. I think one comes from the acquisition side. It is the way you acquire your customer scalable and I think actually Jason, you work a lot on this. Which is, how do you get scalable lead generation? How do you build a good site to bring those in? And it ends with, how do you build scalable way to onboard new owners.

So when a new owner comes to you with some properties, you some process for onboarding them, setting expectations of the service and doing that efficiently. That’s the front end of scalability then there’s this backend of scalability which is the whole operation. If you have an amazing front end and you’re just bringing in new customers like crazy and you’re going from 100 units to 1,000 units by the end of the year, there’s going to be this big problem if your operation can’t handle that growth. You need to be scalable on both sides. Really where we focus is on making maintenance scalable. So you can grow without worrying about creating your margin, and you can actually grow without worrying about not being able to fulfill any promise you’re giving to your customers.

Jason: Yeah, makes sense. So that’s kind of how you got into this. Tell us a little bit more about Latchel and how it differs from some of the other solutions out there. So there’s like Homey, Keep, Property Meld, and there’s other ones coming into the space and then some of these absolutely has their own in-house maintenance staff, software and there’s some of these sort of things out there. Explain how you kind of fit in the marketplace and you differ because I’m sure everybody’s wondering how they can compare.

Ethan: Yeah, let me start from maybe a sort of philosophical standpoint which I think kind of set us apart right at the beginning of starting this company. I’m going to actually talk about our first-day rental shop. It’s sort of is what lead us to be what we are today. The first thing we ever did when we launched service, we had one property manager that was going to say, “Hey, cool. I’ll give you guys a shot. Let’s see if you can make this maintenance thing easier for Me.” The first thing we ever had, it was just a pure technology solution. What it did is it automate a text to tenants to get something scheduled. Then actually the first version we had, the property put a work order in our system, it just texted the vendor the work order and said, “Hey, here it,” and then a time gets texted to the tenant and said, “Here’s the time. If that’s not good for you, let us know and we’ll switch it.” I’ll just call her Sally. Sally is the property manager that kind of said, “Hey, cool. Let’s try this out.”

It was [8:00] AM east coast time. I’m on the west coast by the way and at this point, it was just me and my cofounder Will around the west coast. It’s [5:00] AM for us, [8:00] AM for her. She sends this work order. We wake up at [8:00] AM with an email that’s just like, “Hey, this sucks. I’m done testing this.” we’re like, “Well, what happened?” What happened is she put the first work order and then it sends some text and then the tenant was like, “Well, wait, I have a question,.” and the process just stopped.

It just stopped right there. We kind of realized, technology is an amazing support to a really good process but it can’t be the process. We made the decision as a company to not just have a software, but to have an actual human-based service that was backed by software. So we sort of remodeled the company and what I’d like to describe as a tech-back service. So when you sign up for Latchel, you’re actually getting human teams working for you but they use our technology and our technology syncs with our human process to kind of create this really efficient harmony.

Some of the differences between the way we look at these problems and some of the ways other companies look at these problems, we look at it from a more holistic perspective. Can we actually completely offload the maintenance issue from a property manager completely. We look at it from a different perspective, from a company that builds pure software. So if a company is building pure software for a property manager, the property manager needs to build some process and procedures to work well with that software. So they still need maintenance coordinators potentially. They still need property managers that are going to get their hands dirty with maintenance. But the software helps them become more efficient.

We kind of took an approach where we said, “We’re going to do all of it.” We need to have these human teams to do all of it, plus the software to make them efficient. So there may be a bit of a philosophical difference in the way we do things versus like you mentioned Property Meld, I think Property Meld is the best solution for the company looking for that software to help their team be more efficient. But Property Meld doesn’t necessarily mean you can completely forget about maintenance.

Of course, if something goes wrong, we still need someone there. So really one of the main difference there is we just have the human team to back you up so that we can take more of that time off your plate. So it’s sort of like choosing between running shoes and cowboy boots. You choose the one that fits what you want out of your business and where your company is heading. A lot of people also compare us to like to a contact center and whenever we’re compared to a contact center, I usually focus on the couple things that differentiate us when it comes around our human process. We kind of talked a little bit about scalability but we had to build our company in a way where if we 10x the size of the company tomorrow, we can still run which is like in a way, a big mental problem. You really have to think about that.

If I 10 times units, how do I run efficiently? So for us what we found that worked best was a 3-step process whenever a call comes in. The first, we’re just going to screen that call to know if it is an emergency or not. And we’re really just looking to see if this is a possible emergency. So any leak, we’re going to say it might be an emergency. We have a second step where we send any possible emergencies to a human team of property managers that we have in-house. So we actually put a real property manager with a tenant. Actually, I think this is one of the biggest advantages we got.

I have a story here. We had a tenant call only the toilet in the apartment wasn’t working. They were flushing it, it just wasn’t flushing. So they’re pushing the lever to know if it’s flushing. A troubleshooter of ours asked them to take the top of the toilet off, they look inside, they were like, the chain of the flapper is broken in the middle. So okay, that’s why the toilet is not flushing. […] and at the end of the call, you hear them flushing the toilet. That’s a that’s a pretty cool advantage you get where we didn’t have to go dispatch a plumber at [9:00] PM when it’s going to be really expensive because it’s after-hours. We can defer that to […] part of the third step which is if we can actually troubleshoot a contractor or a vendor out. It’s one way we do this.

We go down your preferred vendor list. The second way we can do it and this is what’s been really helpful for a lot of startup property managers or smaller companies without built out vendor networks. It’s also nice if you’re expanding team areas or expanding rapidly and your existing vendor network doesn’t have the bandwidth, Latchel has actually built a lot of vendor partnerships. We can send out vendors that we partnered with to go do these jobs when yours don’t have bandwidth which is nice because it goes back to that scalability where now, your vendor network will be the limiting factor in your ability to get maintenance done. These are really the two things that kind of make us standout I think from your typical contact center or call center. Aside from the split process has actually allowed us to do these things more efficiently so we don’t have cold times like you might have with like an affiliate.

Jason: Yeah, I love it. I love the idea of focusing on the human side first. I think there is such a temptation in current times, modern day whatever you want to call it that everybody’s trying to get towards some sort of level of automation in which they can eliminate human beings. It’s tempting because we’re like, computers, if they could just do everything, it would be so much cheaper. But there’s sometimes an art to things like maintenance. Sometimes there’s an art to things like leasing and coordination. Sometimes there’s an art to troubleshooting and solving problems. It’s really hard to create the complexity necessary to mimic a human brain.

Ethan: Yeah, exactly. It’s kind of interesting actually, I have used this example from chess. The best chess players, they’re not grandmasters, it’s regular people paired with a computer and obviously, you need to know the rules of chess. But as long as you know the rules of chess and you’re kind of like just an average guy like me, and you get paired up with a computer, you will actually win a chess more often than a grandmaster or grandmaster paired with a computer.

So there’s this kind of beautiful thing you get when you can combine the expertise and human mind with technology. And that’s really what when you look at scalability and how to do a better job with maintenance with leasing really with any company process you want to be looking at, how do I link my people better and faster at what they’re doing. How do I use technology to reduce inaccuracies that they might make? That’s kind of Latchel’s perspective on all this.

We’re building a lot of software and a lot of technology and that’s to make our human team a lot better and more efficient in what we do and it also allows us to kind of pass that margin and cost savings back to property managers. I think one of the unique things about property management is it’s inherently a tight margin business. And so you need to do everything you can to do things cost effectively because you want to keep healthy margins. So we kind of try and make our business structure in a way where we feel like we’re charging the price that keeps our customers at healthy margins.

Jason: So one of things we’re all about at DoorGrow’s transformation. so what sort of transformations have you noticed among your early adopters in getting Latchel implemented and bringing this into their business, being able to offload some of this maintenance load with phone calls and coordination?

Ethan: Yes. There’s two examples I like talking about. We had a customer, Jelena a few months ago. I’ll call him Jack. When he started, he had 25 units. When he started, he joined our 24/7 emergency dispatching service. He is basically worried about just getting flooded with calls. We wanted to offload the tenant calls and have us do the emergency dispatching that I kind of mentioned earlier.

Now, him not having to take his tenant calls and worry about at least the that we see emergency side of maintenance. Within two months, he had gone from 25 units to 100 units. So he came back to us about 60 days later with 100 units. So he 4x in about two months and he had this new problem which was, “I’m a solopreneur. I’m doing this by myself. I can’t handle the nonemergency maintenance anymore. It’s 100 units.” so now he went up to our premium service where we take the coordination for all maintenance work.

Now keep in mind, he started with us at 25 units. So he didn’t have a built out vendor network. So he’s really relying on us to be able to get that operational support to not only with vendors but also with the actual coordination. so that’s one example that I love using because I think it’s really great for a company that maybe early on, you may be just starting out. It’s never too early to start thinking about scalability because who knows, maybe tomorrow you’re going to talk a property owner that house 50 homes or 50 units and now all of a sudden you’re going to be in a panic, “Well, how do I manage that?”

The second example is actually a little bit on the other side of the spectrum I’ll call this property manager, Jane. She’s also actually in the bay area. She came to us and when she was at 1,500 units. This was about 95% single family home. So 1,500 homes. She came to us for after-hours only, emergency dispatching service. So she already had some processes in place for her daytime team but that on-call process was just crushing them. Not only was it like taking property managers out of their sleeps. So they’d come to work just wrecked. But at 1,500 units, you’re getting so many after-hours calls at that point that it’s not scalable to just have people on rotation on-call.

They’re just going to get too tired out. So she was looking at us to help with that. In less than a year, they’ve grown to 3,000 units. That’s a bigger scale and I’d like to think that partially they’re able to do that because they have Latchel handling their after-hours. But it also speaks to their ability to create scalable practices for their daytime teams because they’re doing all the daytime stuff and nonemergency maintenance in-house. So they have really good processes for that and they’re using us to supplement for those after-hours emergencies.

Jason: Cool. So Ethan, one of the questions that’s coming up in my mind that I think a lot of people listening might have is, they hear about this and they go, “Okay, that’s great but I’m curious about this vendor network. Is this vendor network, are they in my market? Do they cover every area?” a lot of property managers are really careful about giving something up. They’re control freaks a lot of times. Especially small ones. The solopreneurs are control freaks. Eventually, if they want to grow, they realize they have to give up everything that got them to that point of success. They have to give up maintenance coordination. They have to start hiring team members as they build out. So if they’re going to give this up to you guys, I want you to touch on that. How do you make them feel safe and how can they hand this to you effectively and then this vendor network, do you cover everywhere? What’s a good fit for that?

Ethan: I’ll speak to both of this actually an I’ll kind of bring in one of the latter points you mentioned back to you. How important delegation is when you’re growing. You can only grow your business so far without a team. Of course, part of being a business owner is learning how to do a good job, delegating and that means sometimes giving up control. If you’re controlling everything, that means you’re micromanaging and that means you’re really putting a cap on your ability to grow in scale. Yeah, you have to be able to delegate and let go of control of things.

Jason: Yeah, I would go further than that. I would say your ability to grow and scale is directly connected to your ability off load, period.

Ethan: Yeah.

Jason: Yeah. Business owners, that’s the hardest thing to do. A lot of this mindset that I can do it, I can do it so I should do it because I’ll save money. If your number one priority is to save money, then you will always be your best employee. You’re on zero dollars an hour in some instances. So yes, there’s an alignment there. You need to be willing to off load. So it helps property manager feel safe about off loading to Latchel or off loading maintenance coordination.

Ethan: Yeah, and I’ll talk about it in two ways. When you want to build just your company to be scalable, this is whether or not you’re a Latchel customer and using us for maintenance. When you delegate things, part of scalability is having a clear process and procedure. That means documenting things in a way that your team can understand because you’re also going to be delegating to your team.

When you’re at 1,000 units, you’re going to have more employees than when you’re at 100. At 100, you can probably get yourself another 1,000 and you need to have your team on the same page. At Latchel, we document everything. We have process procedures for everything and we actually talk about this stuff every week to get feedback from our team. Is this process working? Can we improve it? And we improve it together and then follow the new process, and you want to be doing the same things and that allows you to let go a little bit. So let go of some of that control, but if you would in a way where you’re not just sending people out to figure things out for themselves, they have this bounce.

Jason: I’m think in theory, this is like how you guys run Latchel internally or you’re talking also about your taking the maintenance processes in building these out and people that come in and subscribe to your service get access to these.

Ethan: Both actually. We can talk about it in theoretical level. This is just what you want to do to be able to unlock a lot of growth at an operational perspective. We actually do this internally. Part of that means when we work with any customer on taking over this maintenance, it means building the boundaries that Latchel is going to work under. And it also little setting a clear expectation. Here’s what Latchel does and here’s what you will continue doing. Part of this boundary is, and this is kind of how it fits into the vendor piece you asked about.

We have to set budget limits. We need budget limits on things and those, it’s a very clear boundary for us to know okay, here’s a budget limit on a nonemergency job. We can’t send a vendor out or have them to do work if it’s going to be out of that budget limit. That gives property managers the ease of feeling, cool, it’s not going to go over that and they have the duty to their owners to stay within budget. So it’s things like this that we document and build out and we need to be flexible enough to have this fit for any type of property manager because everyone works a little bit differently.

Now, we have some standard processes too that we also try to sync with the process of our customers because when we’re aligned, that’s when we’re doing our best work. On the vendor side, one of the trickiest things for any property manager is building a vendor network that’s also going to be in alignment with their maintenance processes. the worst thing that’s going to happen is like you work out a deal with one of your preferred vendors or, “Hey, we’re going to give you this stuff and here’s the budget limit.” and half the stuff you send them is suddenly not done a week later, or they’re sending back invoices that are over the budget limit.

Part of what we had to do as a company is build a lot of these strict boundaries for the vendors that we work with. Of course, there’s sort of this betting period we have with any vendor and that helps, of course you need to make sure your vendor, they’re licensed, bonded, and insured if they have to be in your state. That’s all part of the normal things we have to do with our vendor network. But we also like looking for sort of the—we make it a policy to look for the extra things that these vendors are coming off referrals from us. They’ve done work for us before.

It’s very rare that we’re going to go out and assign someone brand new but it sometimes does happen where you get an emergency that comes in, something needs to get done quick, we may call out your preferred vendor list, no one ‘s available, we’ll call some of these Latchel partners, they’re not available. At the end of the day, you got to get someone out to fix an overflow in the toilet or we’re going to be dealing with property damage. In those cases, it’s important to have a process for how you bring in those new vendors that you may have not worked with before because that process is what’s going to come to control the rest of them to be doing something that you don’t want them to do. For example, going over the budget.

Jason: Latchel will help at each of those three levels?

Ethan: Yeah. We have different processors.

Jason: Vendors, the Latchel partners or your people that you’ve kind of identified. And then you’ll also go out and maybe help them find somebody if that isn’t available.

Ethan: Yeah, exactly. We have to do that for companies when they’re in kind of more rural areas sometimes. If you’re in sort of like a major city, we generally don’t have a problem. If you’re a couple hours out of the nature metro area, it becomes more important for us to have some processes to find brand new people that maybe neither of us have worked with, and they do it in a way where you know it’s going to be controlled and you’re not going to be dealing with a vendor going out, going rogue, going over budget and things like that.

Jason: So building out your Latchel partner’s network, this is like probably an ongoing active thing that your team is always working on then?

Ethan: Yeah. This is sort of like a big thing we do day in and day out, building those networks. I think one of the advantages that Latchel has is, we’ll have 10, 20, sometimes 30 or more property management companies in a given area. That means the flow of maintenance work coming through Latchel is pretty massive and that gives us a lot of power to bring these vendors into our network because they know they’re going to get steady work.

One of the best ways you can create positive vendor relationships is by giving them steady work. I mean it’s sort of well of course, you don’t have to tell me that but the hard part is, how do you actually do that in practice. One of the things I’ve sometimes talked about to property managers that aren’t thinking about joining Latchel as a customer is to potentially link up with other property managers in their area and actually see if you can share vendors.

Because, if you can go to vendors with 1,000 units because you partnered up with other property managers in the area that send work to these vendors, they’re going to be a lot more dedicated to that whole group. I like to call it like a hack for building vendor networks. So if you weren’t going to work with Latchel, you wanted to build a good vendor network but you felt like you didn’t have enough units, that’s one way to do it.

Jason: How many units do you think a company has to have to have a really solid vendor network? Because, one of the biggest complaints I hear inside our Facebook group, in the DoorGrow club and among clients is that vendors may be good for two to three years max and then they start doing better as a business and then things start to fall apart and their business tends to break and they have to find new vendors or they’re complaining that they may not have enough work to keep that vendor really attached to them or connected or feed them enough business and then they’re running into those issues.

Ethan: I wish there was an exact answer of, “Hey, x many units and you’re good to go.” most of it is about what how much work do you have and it’s also seasonal. I’m sure that everyone that’s listening is finally starting to breathe a little bit now that software is like over and you’re not like inundated with turns in maintenance requests. I mean it’s the same for any vendor, they’re inundated to you during those months. But I think more importantly, it doesn’t have to be that you’re filling up vendors so much that they’re overwhelmed. It’s that they feel that you’ve earned their trust. You need enough work being sent to them where they trust you because if they trust you, they’re going to reciprocate that.

If you think about it in terms of earning trust with those vendors, it’s flexible how many units you need but generally, the way you could think about this is you’re probably going to get about three or four nonemergency requests per unit a year. So let’s say you have 100 units, you’re talking maybe 300 requests, you divide that by 12. I’m really bad at math, it’s something like mid 20’s each month. That might actually be enough to support a handyman and be maybe not full time but at least giving them enough work to be really loyal and dedicated to you. You’ve earned their trust there. That’s probably not enough to earn the trust and dedication of an electrician because out of 25 work orders, you might only be getting one electrician job per month.

Jason: And so the more local property management companies that get together and start using your service probably have a bigger benefit to all of them in being part of it. It’s almost like a co-op of vendor network in buying power or in retaining good vendors.

Ethan: Definitely. We actually see our best areas are those where we’re dense with property manager customers because it gives us more power to build a strong vendor networks. Part of the check in—we had to really focus on this as we grew as a company was earning that trust with our vendors when we weren’t dense, so we have a lot of programs in place that have allowed that to happen. One of which is sort of guaranteeing the payment which is really amazing for vendors because they’re getting stiffed all the time and they’re probably not getting stiffed by your listeners because your listeners are focused on building ethical, strong businesses. If you’re stiffing people, that’s maybe not the best way to grow a business.

There’s a lot of landlords out there too that are calling out to a handyman for a one-time thing and then they’re not paying them. So that’s a good thing to do too. Just building a strong—earn their trust by making sure they that they’ll be paid and things like that. We have other processes for building those networks too.

Jason: So Ethan, another question. In the beginning, I was thinking, Latchel maybe is kind of like these maintenance coordination software platforms. After talking with you, you mentioned the human side, how does that compare then with the services on that side like call centers, like SuperTenders, Easy Repair. I think some people would have questions about that. How is it different from that side of things?

Ethan: I think we’re probably most often compared with companies like that because we solve a lot of the same problems that they do, we just take a different approach to it. We’re a company like I said that philosophically is building technology and software to make our human process more efficient and we do that because not only do we want to be able to free you up so you can grow but we want to be able to keep your margins healthy. So it’s really important to us to make sure the cost of our service is priced out in a way that keeps margins healthy.

I know this wasn’t part of the question but just as an example because I think it’s actually going to surprise a lot of people. Our after-hours emergency dispatching service, we don’t have any minimums for one because we’re all about helping companies grow and that means helping small companies grow. So for after-hours we charge $25 plus 50 cents per door per month. So if you’re at 100 doors, that’s $75 a month with after-hours coverage. That’s how you keep margins healthy. For our 24/7, and it’s the $25 plus a $1 per door.

Jason: Okay. Your call centers are based where?

Ethan: Yes, I mentioned that 3-step process. So our first step is sort of that reception and the screening to see if the request is a possible emergency or not. That’s done in Cebu in the Philippines. If anyone sees a VA or Philippines call center. Philippines it’s like an amazing place to get high-quality reception customer service work because they are known for BPO, just business process. We provide them our software and they’re using our software to go through and screen these things to determine if they’re emergencies or not. They’re trained in customer service with our software. We have 100% accuracy on flagging possible emergencies. We actually kind of over send to the next step…

Jason: What’s tier two then?

Ethan: Tier two is our property management team. Anything that gets flagged as an emergency, they go to this tier two. These are all real property managers and they’re actually distributed in the US, so they’re all US based. We have some on the west coast, some at west, some at the south, some on the east coast, really all over the place. Basically, what happens whenever a maintenance request gets flagged as a possible emergency, that whole team gets pinged. The first person available gets on that call with the tenant to troubleshoot.

I mentioned that story at the beginning of the toilet. So that team, they’re all active property managers actually in the US. Most of them manage anywhere from 20 to 50 homes. But you’re getting the real property manager online. I talk about scalability, the way we’ve been able to do this is actually by splitting those duties at that way because we don’t want an expert in all the maintenance, like our property managers on the phone to just screen a call because that’s really expensive. We want the experts doing the expert work and then of course, we want our customer service team in the Philippines doing the customer service work and reception work. The dispatching happens with our US-based team as well.

Anyone on our premium service joined the nonemergency coordination, that option happens with our Seattle based teams. They’re all in Seattle. That’s where we’re headquartered. That team, they’re all former property managers and former contractors actually. They’re not active property managers anymore because they’re full time here at Latchel working for our premium customers but they all come from property management. You kind of need that because and if for any of your listeners have ever tried hiring so much straight out of college to do maintenance coordination, the first 6 months is probably a complete disaster. Like you need someone that knows this stuff and is trained to do a good job with the coordination, to know does this estimate even makes sense.

Jason: Premium level of expertise that can be involved in the process and then so for the maintenance coordinators because what’s going to happen, here’s what’s going to happen, some people are going to watch this and then the business owner is going to send this to their maintenance coordinators. They watch this, “We should probably do something like this, let me know what you think.” So the maintenance coordinators often have their processes, they have their way of doing things. They’re scared to give those things up. They’re scared to make changes. Entrepreneurs are like, “Woohoo, let’s try new shit. Let’s just do new stuff.” And they just do it. So for the maintenance coordinators, how do you make their life easier?

Ethan: Yeah, that’s an awesome question. Earning trust, it’s actually one of our leadership principles. We actually built our company on the side of 14 leadership principles that actually came from Amazon and earning trust is one of those. I talk a lot about being customer obsessed, earning trust, have no bias for action because they’re part of the ways we want to think about building Latchel as a company in the way we want to work with the customers.

So for us, it’s important to earn that maintenance coordinator’s trust and really it don’t have to be maintenance coordinators, it could be like a team of property managers, it could be anyone at the company. Transparency becomes really important. So we actually have online portals that allow the maintenance coordinators or property managers to track all this stuff in an online portal. We also are very transparent in email communication. So when things happen, we send emails. You can also log in and see everything moving at real time.

We log all communication in a job log in our portal. So we want everything documented. We want everything visible. Basically, we really want to make it easy for a property manager, or a maintenance coordinator, or an owner to track the progress of all this stuff. That’s really important. What we’ve done most recently is actually give in more control to maintenance coordinators or property managers as well. The way we used to work, you basically have to chat with our team to have them do something.

We have a live chat in the portal so you can really quickly chat with any of our operators. Those operators, by the way, they’re all former property managers and contractors. We’ve recently done something where we’ve allowed now anyone at the company to log in and to actually give us information in real time about the job or the status of a job. So if you hear something first about maybe a job getting complete, you can actually just go and mark it as complete, or if you need something canceled, you can just go in and mark it canceled yourself. So it gives a little bit more control. We’re not a replacement for a property manager. We’re not a replacement for a maintenance coordinator. We’re like steroids for your business. Steroids is probably a bad example, stay away from that. You’re Tony Stark and Latchel wants to be your Ironman suit.

Jason: There we go. I love it. Ethan, it sounds really cool. So how can people get in touch with you guys and before we got hopped on the call, you were like, “Hey, I’ve got an offer. Is it okay if I hand it out?” which the answer is, absolutely. So why don’t you share that with us and let everyone know how they can get in touch with you?

Ethan: Sure. So if you want to get in touch with me or my cofounder Will Gordon, we actually do you all consultations with new customers. So I’d say go the latchel.com. There’s a big button on our site, I think it says schedule a free consultation or schedule a consultation. Click that button and you’re going to get like a little form to fill out just to give us more information about you and there will be a little referral box at the bottom. If you write DoorGrow, or DoorGrow Show, or DoorGrow Live, or DoorGrow Club, any of those things, we’ll know that you came from DoorGrow and we’re going to give you an offer. So if you do end up signing up, we’re going to give you your second month of service for free.

Jason: Awesome. Thanks for that. Everybody, check out Latchel and yeah, it would be really cool. One final question. I saw somebody post that we probably should touch on. A lot of people are using AppFolio, they’re using Propertyware, they’re using Buildium, how does this connect? How does this relate? Because they’re probably concerned with how it’s going to be with a property management software.

Ethan: Yeah, I’ll say this is actually the most frustrating question for me that I get because a lot of these systems are closed off. They have a closed API which basically means they don’t allow other softwares to just pipe in automatically. So what we have to do, we have an add-on service where our team will manually update your system of record. I will say most of our customers don’t actually add that on because I think what they end up finding is so much of the coordination work and just day-to-day getting pulled out of what you normally do goes away that it’s super easy, maybe 10 minutes in the morning to just go ahead and update AppFolio. We do have customers that opt into that because we can manually go into your system and update it for you.

Jason: Okay. So your team can actually do some of that if they wanted?

Ethan: Yeah.

Jason: In the future, you guys are looking at doing API connections to like a property where it’s got some API stuff coming out. Buildium has been integrating with a few partners. Manager has an API.

Ethan: Yeah, so I’m going to be so happy when Propertyware’s new API comes out. But for now, we don’t integrate with existing systems. The one we are looking at is any with completely open APIs like Rent Manager is one, I believe Rentec is another one. We haven’t done it yet because most of our customer base is actually on AppFolio, Buildium and Propertyware. It’s interesting like how I just don’t see Rent Manager used as often which kind of has a little fire under us to do that integration. I do imagine though at some point in the near future, we’ll do integrations with those companies.

Jason: Awesome. Well Ethan, thanks again for coming in on the show and I hope people check you out. I know you’re going to also be at DoorGrow Live and so we’re excited to have you there as a vendor. Some people will be able to talk with you and your team in person I would imagine.

Ethan: Yup.

Jason: Alright, awesome. Thanks for coming out on the show. Again, go to Latchel, check it out and then fill out their schedule thing and plug in DoorGrow. Keep us posted on whether you get some leads from this. I would be curious to find out.

Ethan: Yeah and honestly too, if any of your listeners just want to have a conversation about anything we talked about, I’m happy to do that too. I’m always open to talk to property managers and entrepreneurs.

Jason: All right. Thanks so much, Ethan.

Ethan: Thanks Jason.

Jason: Alright, so for those of you, that sat through this interview hopefully got some really good value. Make sure you join the conversation inside the community in the DoorGrow Club. You can go to doorgrowclub.com and that will redirect to our Facebook group, to our community, and we would love to see you in there, communicating. One of our most active members in there said that he’s already added over $100,000 to the annual revenue just from ideas that are tossed around for free inside that Facebook group. Make sure you get inside the Door Grow Club group and we will see you in there. I’m Jason Hull of DoorGrow, until next time.