DGS 225: The #1 Way to Increase Productivity and Profitability in Property Management

Owning a property management company can be expensive, risky, and stressful. Property management business owners often surround themselves with the wrong team members.

Today, property management growth experts Jason and Sarah Hull sit down with Pete Neubig with VPM to talk about building effective and efficient property management teams.

You’ll Learn

[01:58] Having a business in “Chaos Mode”

[09:02] The importance of core values

[14:45] How VAs help your business thrive

[23:18] Accountability, KPIs, and training

[30:06] Creating company culture with VAs

[37:07] Getting the right people in the right roles

[41:30] VAs for property management companies

Tweetables

“When you’re in high growth, you seem to be in chaos mode, and when you’re in chaos mode, you don’t make any money.”

“When you’re not proactive in your business and you’re reactive, you’re losing trust and churn goes up.”

“If you don’t have your org structure correct, it doesn’t matter how many whistles and bells you have.”

“I think every business owner needs to build the business around themselves.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Pete: If you don’t have your org structure correct, it doesn’t matter how many whistles and bells you have. If your org structure is not correct, It all goes to hell in a handbasket.

[00:00:09] Jason: All right. Welcome DoorGrow property managers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives, and you are interested in growing in business and life, and you’re open to doing things a bit differently, then you are a DoorGrow property manager.

[00:00:28] DoorGrow property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it. You think they’re crazy for not, because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management, business owners, and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win.

[00:01:03] I’m your host, property management expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, my wife. Co-owner of DoorGrow and the COO of DoorGrow. Now let’s get into the show.

[00:01:16] So our guest today, we’ve got Pete Neubig back on the show with VPM Solutions. Welcome Pete.

[00:01:23] Pete: Welcome Jason, sarah. Thanks for having me.

[00:01:25] Jason: Yeah, good to have you. So now Pete, you were an operator of a property management company.

[00:01:31] Pete: That’s correct.

[00:01:32] Jason: With Steve Rosenberg and you really helped to dial in the operations there and build that up. And now you’re helping people do this in their property management business with your VA company. So we’re going to be chatting about today is the number one way to increase productivity and profitability, so this should be interesting. So Pete, what is the number one way to increase productivity and profitability? Let’s get into the subject.

[00:01:57] Pete: Sure. So before I jump right in, I’ll talk about just a little brief history of Empire Industries, which was the company that we owned. So, we came from the investor side, Steve and I, we partnered up, we owned about 31 homes. Bought too many, didn’t know how to manage it.

[00:02:12] We love the idea of buying the deal. We hated the idea of managing it. So we went out looking for management firms and then realized we felt we could build a better mousetrap, which we ended up doing. Our original vision, I know you talk a lot about vision in your coaching, our original vision was we were going to own 500 homes and manage them ourselves, and within a year, that vision went to crap and we ended up managing 60 homes and I owned 37 of them. I’m like, “Steve, how are we managing these other homes?” And we were third-party managing all of a sudden. Because he felt that everybody needed help. And so we started third-party managing. So that’s how we got into it, and we ended up building a better mousetrap and we created a third-party management firm and we took it from those 31 doors that we had all class D minus stuff, which is a whole other podcast. And I think you’ve actually listened to one of yours recently about something like that. So we ended up taking it to about 980 single-family homes and nothing more than four units in Texas, single families, one to four units and we went to three markets. We were in Houston, Dallas, and Fort Worth. And what happened was with us, our vision was no longer aligned. Steve wanted to take the property manager firm national. I wanted to literally just stay in Houston and get like 1500 homes. And so that fractured the partnership to the point where we decided to sell the business. Long story short, I couldn’t afford to buy him out and he didn’t want to buy me out. So we ended up selling to My Management, took a job with them for a couple of years, and realized I was no longer employable and that’s when I started VPM Solutions. So that’s the short version of it, but we were in chaos mode for many years at Empire.

[00:03:43] When you’re in high growth, I don’t know if you’ve seen this with your clients, but we were in high growth and when you’re in high growth, you seem to be in chaos mode. And when you’re in chaos mode, you don’t make any money. We didn’t anyway. And so what we had found was our number one challenge was payroll costs. So the number one challenge that I’ve seen, and I’ve talked to a lot of people across the country, your number one challenge is either growth or payroll costs. The interesting thing about property management because it’s a service-based industry and because it’s so service-based that you almost have to stress your team out to make money.

[00:04:16] Right? So you’re on this kind of seesaw where I don’t really have that many doors, but I need the people. But so the salary cost is so high that there’s no money for me. As I grow the doors. Right. Now I don’t hire anybody, but now I’m making money, but my team is now completely stressed out. They work in weekends, they work at nights, they’re taking phone calls. They don’t give the great customer service. And so payroll costs, what we saw was with us, our payroll costs are about 56%. Which is really high. A business should be around 30 to 36% is what I was taught by my business coach. I don’t know if you’ve seen anything different in the service space, but that’s what I’ve heard. So I had to figure out how to get my payroll cost down from 56% all the way down to about 30%. And I’ll tell you how I did it with virtual assistants, so I’ll let the cat out of the bag, right? We got it down to about 34%. So from 56 to 34%, and every percentage that you save in payroll costs is a dollar in your pocket.

[00:05:11] But then you’d be like, “Well, Pete, if you have less people or, you have less payroll, typically you have less people. And if you have less people, your team is stressed,” and I get all that. But let’s talk a little bit about what happens when you have a stressed team. Okay. So when you have a stressed team, the little things go out the window, right?

[00:05:27] All of a sudden, you’re not making those calls to get those online reviews. All of a sudden, you’re not making the calls and your communication goes downhill. And when a landlord owner or an owner client calls you to find out what’s going on with the problem, whether it’s maintenance, lease, you know, lease renewal, whatever it is, they feel like they’re managing you.

[00:05:43] So when you’re not proactive in your business and you’re reactive, you’re losing trust and churn goes up. At Empire, our churn was around 34%, which is insane, right? The average churn in the business, my understanding is like 18 to 20%. Right.

[00:06:00] Jason: And that’s his annual churn.

[00:06:02] Pete: Yeah. So it’s high, right?

[00:06:03] 34%. And I can tell you that the majority of it was people were unhappy with our service. Yeah. Right. So it wasn’t good churn, right? Because you have good, neutral, bad, however you want to define it. We had mainly bad churn. People weren’t selling houses and like, “all right, we’re out of here, we sold.” No, they were taking them because they were not getting the love, the communication really from us. So by having these payroll costs so high, I couldn’t afford it. I couldn’t afford people. So what happened, especially after 2020 with that pandemic is that the cost of hiring people got incredibly high, right?

[00:06:34] So I call them low-level, low enjoyment jobs. Let’s take a maintenance coordinator, for example, right? That’s the number one job that is posted on VPM solutions today. Is the maintenance coordinator. So that’s the first thing people look for typically. Well, a maintenance coordinator in Houston, Texas, back in 2018, 2019, was about a $35,000 a year job. Well, after 2020, people that want to do a job, they want like about $50-55,000, right? And the company just can’t absorb that. They can’t afford to hire people. On top of that, the type of people that we were getting were GEDs or high school, diplomas, no longer college-educated people wanted that job. Most of those people have challenges in their life and they bring them into your business. So, this all came to a head. I had a lady named Sharon, and Sharon was my front office coordinator. This is back in a day when we had these things called offices and office space.

[00:07:22] Jason: Yeah.

[00:07:23] Pete: So I remember those days. In 2019 and before so people would walk into our office, drop off, rant or whatever. Right. And Sharon was this, she was like this angry lady. And I’m like this tells you what my hiring process was back then it was not very good. And some of the things that you teach, I’m like, man, I wish I would have known that back in 18, 17 and 19. So she’s the wrong person. She was the wrong person and she was the wrong fit. But in my mind, I’m like, “Well, she’s mean.” I’m like, “She’d be great for a maintenance coordinator, right? She can tell people no all the time.” So I decided instead of firing her, I decided to promote her, right. Which was a terrible mistake. So I promote Sharon to maintenance coordinator. Now, unfortunately for Sharon, she was my maintenance coordinator. I was actually managing properties back then at the time. And so just for that, she probably should’ve got some hazard pay. So I get that. I’m not the easiest guy to work for, especially when I’m managing properties. So Sharon comes and within one week, Now I gave Sharon a raise, so I moved her from front office to the maintenance coordinator. She was making about $35, I gave her like $ 40,000.

[00:08:20] She’s making what I think is decent money. That’s not great money. I get that, but it was good money at the time. Within one week, she comes to my office. She tells me she needs more money. I’m already just scraping by as the business. Just scraping by, single-digit profit margin. So that’s when I realized that I could eliminate her position. I can hire three people that are overseas for the same cost as one Sharon. But here’s the big difference. Those three people, they’re obviously bilingual, right? And here I’m in Houston and Dallas and Fort Worth at the time, Spanish is like, a lot of our tenants, about a third of them didn’t really speak English. A lot of our vendors, Spanish was their first language. So I can get bilingual people, I can get college-educated people, I can get people that are ready or knowing that they want to work from home. And here’s the most important thing though. I can get people that were not just a J-O-B to them, but a career and they were excited about the opportunity to work with us and for us. And so the attitude and all of a sudden I can find people that align with our core values.

[00:09:18] Jason: Yeah. That’s significant to be able to find people that align with your core values. Yup.

[00:09:22] Pete: A hundred percent. But now I have three people doing the work. So now what happened is I had a little hesitation from my property managers, right? Because property managers are designed to be taskers. Right. So I had to take my property managers and I had to lift them up. And we actually changed the name. We said, you’re no longer considered a property manager. You’re a client relations specialist. Or an asset manager. I like asset manager better, but that was one of the fights I lost with Rosenberg. If anybody knows Steve, he’s 6’4 full of muscles. So we arm wrestled and I lost on that one. We call them client relations specialists.

[00:09:55] Jason: But you wanted to call them what? Asset managers?

[00:09:58] Pete: Asset managers. I think an asset manager just has a little bit more cachet. And if you really think about it, right? How many clients do you have, like you’re listening, that call you up and tell you how to manage their property, even though you’re the expert? I felt the property manager, I call them gophers. I felt the property manager, they had to take these calls from these owners all the time and say, “Hey, go to my property, make sure the water in the pool is being filled up. Go to my property. Gas man’s going to come there. I want to know about this $12 expense.” meaningless and small conversations. You would never have those conversations with the guy managing your money, right? Imagine calling your Smith Barney guy and say, “I don’t like the way you made this trade. Like you should make this trade different.” no, you just let the guy do his thing. So how do you let us do our thing? Well, words are powerful and property manager to me has lost its luster. And it just reminds me of a gopher.

[00:10:45] Jason: I think also the phrase property manager in the property management space has become like saying ” miscellaneous role” and that like it doesn’t have meaning a lot of times there runs into this a lot with coaching our clients.

[00:10:58] Sarah: Like, “what does your property manager do?” And they’re like, “they pretty much do everything.” “Okay…”

[00:11:02] Pete: And that’s a problem And the reason why they do everything is because they can’t afford more people because the margin is so slim. Right, so we got to the point where our property managers got elevated, made them client relations specialists. And what does that mean? It means that they had to learn a new skill. They had to manage by reports. They had to manage people because now all of the low level property management tasks were being done by my team in the virtual assistant world. And when I mean everything, but by the time Empire was done now, granted, we’re almost a thousand units. But at that point we can hire some people. Everybody had one hat, which was a beautiful thing because now you can have your job description really set. You can have your KPIs really set. You can have your DISC profile really set. And you know who to hire.

[00:11:43] And they have one or two numbers and they end up doing a much better job than the manager who’s doing all of it. So over the course of your growth, you have to change your infrastructure, right? You go from portfolio to hybrid, hybrid to departmental to pod and all that good stuff. I got to departmental, we never got to pod and then we sold. That was probably going to be the next move for us.

[00:12:05] If you don’t have your org structure correct, it doesn’t matter how many whistles and bells you have. I could have property meld and I can have Zapier and I can have lead simple. I can have all these things. I can have a bunch of VAs, but if your org structure is not correct, It all goes to hell in a handbasket, just even quicker, right?

[00:12:22] Cause now you have all this stuff happening even faster and it just gets crazier. And so with us, what we did is we had the structure, right? So now the managers, they’re not taking those first phone calls. what was happening, Jason, is that when people would call, right? An owner client would call, my manager would pick up the phone. And as they’re talking to this person, they’re literally online and doing 14 tasks, responding to 18 emails. And people can hear that, they can see that and they can feel it over the phone. And so what do they do? Well, you don’t really have enough time for me, I’m going to go take my property elsewhere. Or if you mess up, you know what, not only do you not have time for me, you mess up, right? So now what we do is we have everything happening on a low level.

[00:13:01] My managers told me, and I’ve talked to other managers since, my managers told me that maintenance took 80% of their time, right? And so I’ve heard that time and time again. So that was the first thing. So everybody always asks ” okay, if I do hire a virtual assistant what’s the first thing I should hire?” And the answer is, it depends for me. I knew my churn rate was directly related to the way we handle me.. I knew it. I didn’t have to have a consultant come in and tell me that, right?

[00:13:27] I just getting beat up every day by it. So I ended up hiring I was going to hire one remote team member, I ended up hiring four, right? And I trained them, figuring that somebody is going to drop off, but I wanted to train them all together. Now I did the training. Training is like literally the most tedious thing ever. And nobody wants to train. Everybody wants to hire somebody that they know exactly how to do it and they know exactly how to do it your way. It doesn’t work that way. You have to take one step back to two steps forward. What people don’t realize is the time you spend training your people, you get back in perpetuity forever. Because if you train your people correctly and you have good core values and you have a great culture, they ain’t going to leave, right? People are so worried. I’m going to transfer, isn’t going to leave. Yeah. If you’re running a crappy company. Right. If you’re running a crappy company and yeah, I’d be freaking worried too.

[00:14:11] Right. Yeah. Make sure you’re running a great company. You train the people. And then here’s the great thing. As people moved on, whether they moved on and got another job or they moved on because I promoted them, guess who did the training for the next batch? My team did the training for the next batch. By the way, my churn rate for my remote team was way less than my churn rate in my US team. Right. Right. Incredibly different.

[00:14:32] Jason: Churn rate of retaining clients, of team members?

[00:14:36] Pete: Team members. Retaining team members. Churn rate of clients and you have churn rate of team members, right?

[00:14:39] Jason: Yeah. Their loyalty is just a lot stronger because they don’t get these kinds of opportunities as often.

[00:14:45] Pete: Correct. Correct. So once my maintenance team was on board, now my manager, I literally saved with the narrow minds 80%, but here’s the funny thing, right? So as I’m training. I had a director of operations. Her name was Margo and I still talk to Margo today. I love Margo. She would come to my office every day for 90 days. She came to my office with her cup of coffee every morning and said, “I don’t think these VAs are going to work. I don’t think these virtual assistants are going to work.” Okay. Because when I was training right now, I did the training, not Margo.

[00:15:12] I was training them, but when I was training them. What we had to do is every work order had to go to the property manager, then to the virtual assistant, then the virtual assistant would talk to the resident, the owner, bring it back to the property manager because they were getting, they were training, right? So they had to learn what to do in each situation, which caused my property managers more time, right? So that 80 percent went to 90 percent or even a hundred percent or 110. Now they’re working extra hours. So they hated it. On day 91 I don’t know if I’m allowed to say this, but I shit you not, day 91, she comes into my office and she has our same cup of coffee and I’m getting ready to listen to the spiel and she goes, ” do we have maintenance anymore?”

[00:15:47] Yeah. And I laughed and it took 90 days, but I got it. Yeah. The point where, so all of the work orders were being done by the remote team that nothing was getting escalated anymore. Only very little things right? So my managers do say, what do they do? Well, they take on all the escalations. Now imagine. What brain power, right? My team in United States, they were the ones that were the experts, right? So, but imagine if they only are dealing with high level escalations, not all the other little, because how many times did I have all these little things get done, but then we missed the big thing.

[00:16:18] And then all of a sudden what happens is I call them taps, two by fours, and mack trucks, right? A tap is basically a maintenance request. That’s going unanswered for, let’s call it 15 days. Okay. That’s a tap. The two by four is now the resident bypass you calls the owner. Now the owner knows that it hadn’t happened or the resident blasts you on social. And then the mack truck is the lawsuit that gets across your desk, the tech, the report the complaint to the the real estate commission. Right. Or you’re just getting, or you lose a client, right? Yeah. Those are two of those. So my team was so busy that they were missing the taps that they were becoming two by fours. And these are called fires. All right. And all we’re doing is trying to deal with this fire. And then of course, every once in a while you get a mack truck, right? And it’s what the heck? So now that my managers are not doing the day to day stuff, they’re able to be proactive. So they’re looking at reports. They’re literally looking for taps. And now they’re solving those taps. What that means is now the owner clients not calling you to find out what’s going on. You’re calling them, you’re reaching out to them, you’re letting them know, or you’re taking care of it before they even, before it even becomes an issue.

[00:17:18] And so by, by having your high dollar people that are licensed and they have experience by allowing them to not do the low level, low enjoyment stuff they actually became not only do they take all the escalation, but they actually became internal salespeople. All of a sudden, and this is stuff that we didn’t anticipate, all of a sudden, though, like my company’s name was empire property management in realty. That 90 percent of my customers had no idea that we could buy and sell homes for them. We’re called realty and no idea. But once I got my property managers to be client relations specialist, guess what’s happening. All of a sudden people are going to buy houses and they’re buying them through us.

[00:17:54] All of a sudden people want to sell. They want to sell through us. So all of a sudden our revenue goes up, right? Then all of a sudden they’re like, who do investors hang out with? They hang out with other investors, right? You’re the, you’re like the five most, what is it? It’s the old saying that you hear you’re the average of the five people you hang out the most. All of a sudden they’re getting, we’re getting referrals. We never got referrals. So now we’re getting a bunch of sales. We’re getting a bunch of referrals. We’re getting people to buy stuff where the agent, right? And when you’re the agent, you get, you build that, that relationship.

[00:18:18] And so now all of a sudden our churn rate dips down to, I think it was 22 percent from 34%. Right. So the interesting thing is I told you when I first started, right, I went from 54 percent to 34 percent in payroll costs. My payroll actually stayed the same. It was the churn rate that went down, increased my revenue.

[00:18:36] It was the other clients, right? And retaining people and getting more clients. That’s what, that’s where the difference was. And now my managers. We’re incredibly happy. They’re no longer working nights and weekends. They’re no longer stressed. Right now. And so now they are they’re having the best life ever.

[00:18:53] And my VA team, my remote team, they’re making more money than they’ve ever made before. And it was easy to, and then they all had KPIs and they were all like. People want to inherently do a good job. They do. Right. And so, but they don’t know how to do a good job unless you tell them what that looks like. And that’s the job description. And they want to report card and that’s KPIs. And my team down there, we had them in Mexico cause they’re the Spanish speaking. But what happened was again, another thing that we didn’t realize was not only the team do the work, they hit the KPIs, they exceeded the KPIs and we create a bonus structure around the KPIs.

[00:19:26] So if you hit the KPI, you got a firm handshake. Thank you. Right. But if you exceeded the KPI, you got a bonus. And if you were part of a team, everybody in team added the KPI or you didn’t get the bonus. And what I like about with the virtual team is the bonus was a hundred dollars a month. If you hit a certain level, you got a hundred dollars for us wasn’t a lot of money, a hundred dollars to somebody in the US. Like literally would get mad at me. That’s a little, that’s too little of a bonus. It doesn’t even fill up my car. Right. And they throw it at you. Somebody in the Philippines or Mexico or Costa Rica it’s an extra couple of days of work per month.

[00:19:58] So they were really appreciative of that, of the opportunity to make more money. What happened was everybody started exceeding their KPIs to the point where I couldn’t make the KPI any more difficult. Like it just is what it is. And they were just doing it. And then here’s the magic.

[00:20:11] What happened next? was they ended up updating or changing the process. So my deal as the business owner was, I am the policy maker, I make the policy, but you own the process. And when somebody comes in and says, “Hey, I changed the process.” And I use this example a lot. I had Jessica who was running all my lease renewals.

[00:20:30] So we had about a thousand units and I have one person doing all lease renewals, inspections and lease renewals. Our policy was that you could not do a lease renewal unless an inspection was done, an annual inspection was complete. And we used to start the process 60 days out. Jessica moved it to 90 days out. And when I was talking to them, I’m like, Jessica, I’m just curious what made you, and I don’t, I try not to ask why questions because why questions put people blame, excuse, denial below the line and they get defensive. I asked, what made you decide to move it from 60 to 90 days? And she goes, “well, with 90 days, I can do X and Y. Like I can get to the owners faster. I know if the, if the residents do it” and she laid it all out. I’m like, amazing. She was doing a better job than I could have done because that’s what her core focus was. Yeah. She was just on that. So then what people will say to me is Pete.

[00:21:13] Okay. Well, how do you know she’s just not doing the lease renewals and not the inspections because she wants to hit our number. Right. That’s the first question I get all the time. And I say, “well, we hire people based on our core values. And one of our core values was integrity. And so if you hire people with integrity, they’re not going to do the loop around.”

[00:21:30] I was able to run reports very quickly that determined all the lease renewals and if they had an inspection done so I’ve been reporting it. It was very simple to, to make sure that I was, I hold them accountable. Yeah, that’s another core value of that we had is we hope people get, we run our business by numbers.

[00:21:48] We hold people accountable. And so that’s so, so because we did all of that, we were able to solve our challenge of no profit or single digit profit margin to, double digit and eventually get to about that 20 percent profit margin, even though we, even while we were still investing in a lot of money, growing the business.

[00:22:07] Jason: Yeah, so we’ve, I love all the stuff you’ve been talking about. I think we’ve had some phenomenal results getting clients to improve their profit margin. And we’ve got clients easily getting up to 40%. Sarah ran her business over 60 and I think the three biggest profit levers are building a really solid process system, a really solid people system, and a really solid planning system and the planning system we call DoorGrow OS.

[00:22:33] But that was really where we started to motivate the team to think in terms of outcomes and get them to think more strategically like business owners. And so that strategic work is what moves businesses forward. That’s where they’re innovating. That’s where they’re improving a process and so those kind of goals, if we give a team member an outcome and we say, “figure out however you can best do this, within our values with integrity. Figure out a better way,” then I’m not concerned about micromanaging them. I we’re less involved in managing the team. They’re now managing themselves because they’re trying to achieve the outcome. And a lot of team members in a lot of business don’t even have job descriptions. So they don’t even know what outcomes they’re expecting.

[00:23:15] Pete: If you’re not sure what they’re supposed to do. How do they know what they’re supposed to do?

[00:23:18] Jason: Right. And if you ask anyone listening to this, if you ask your team members. This would be a curious and interesting experience for you or experiment. Ask your team members, “what are the outcomes that you think are most important for your role?” and compare that with what you think they are. I think you might be surprised. These should be agreed upon and defined, right? That should be in the job descriptions. Pete, I really appreciate all your transparency and sharing, because a lot of times everybody wants to, especially with like coaches in the industry, I see a lot of people coaching mentoring, but you don’t get to see how the sausage is made and you don’t really hear the challenges they have, but they might be really charismatic. They might really be good at speaking, but there’s a lot of stuff going on behind the scenes. And then what a lot of coaches in the industry do is they try to get people to build the business the way they did, which may not even be working. And so I think what’s important, I think every business owner needs to build the business around themselves. It needs to be built to allow them the maximum level of fulfillment and freedom and contribution and support in their own business and that fifth reason of safety and certainty.

[00:24:25] And that means every business is going to be unique because every business owner is unique. If you started a property management business right now, it would be run very differently than some others, because you’re very operationally minded and you would build your team very differently than somebody that’s very visionary sales oriented, right?

[00:24:41] And I think it’s important to get the right team built around you. And a lot of times I think the foundational challenges, a lot of business owners aren’t clear on themselves. And then they start building a team and they’re miserable. They have an entire team and they’re still miserable. They’ve built the wrong team.

[00:24:55] Pete: Well, I think every new business owner does that, right? They don’t feel like they deserve good people. So they self sabotage sometimes. Right.

[00:25:04] Jason: They don’t believe the good people are out there. A lot of times they just don’t even believe there’s good people. They’re like, “Oh, everybody’s terrible.” so guess what they attract? Right. And what’s surprising the truth is just like you had mentioned, when you find good people, they will exceed you doing that role. Especially if it’s one of your minus signs, it’s not one of the hats you enjoy wearing, they will be better at it than you, if they enjoy doing it. A hundred percent. And that’s super humbling for these early stage entrepreneurs, because they think they’re the best at everything initially.

[00:25:33] Pete: There’s two thoughts, right? So when you hire somebody, there’s the whole abdication of it. And then there’s a delegation and then there’s the micromanagement. And so, what I find is that when people hire people in the United States, they abdicate a lot of times when they hire people that are remote, they want to micromanage for whatever reason, even though they’ve invested a lot more money in the person in the United States. Right. And then there’s people that just, they just abdicate regardless.

[00:25:58] And what I mean by abdication is, I’m a property manager. I’m doing a whole bunch of stuff myself. I hire an assistant and I just throw up on them and say, here’s all the things that I’m doing. Go ahead and do it. There’s no direction. There’s no accountability. There’s no management.

[00:26:11] Right. And then they get excited. ” Oh yeah, I’m a great delegator.” No, you’re an abdicator. You’re not a delegator because you’re not giving them the tools and the guidance that’s needed. And then what happens is the VA or the person leaves and ” well, I don’t understand. I can’t find any good people, so I’m just going to keep doing it myself.” the first thing is when you hire somebody, you have to understand, you just can’t just abdicate. You have to make time for them, especially in the first couple of months, right? They’re learning you and your culture. At the end of the day, if you are the sole operator and the business owner each one of us have core values, right? We have our personal core values. Most of those are going to be embedded into the company that we built. They should be anyway. You shouldn’t change your core values for your company. If I’m full of integrity, I’m not going to create a company that’s not, that doesn’t have a lot of integrity, right?

[00:26:55] So these people are going to learn by you training them or your team training them, right? Core values always get pushed down. If you’re listening to this and you do not have core values in your company, you have core values in your company they’re just not yours. The team created core values. They push them up and they may or may not be the ones that you want. Right. But when you hire somebody, it’s important that you spend a lot of time with them to train them properly so that they understand what they’re doing. What I have found is that most jobs can be trained within two to three weeks. Especially if you’re wearing one hat. The more, what I call decision points or if then else’s, and the biggest one that I’ve found is in maintenance coordination has a lot of decision points. What if it’s over the threshold? What if it’s a home warranty? What if it’s an emergency? What if it’s cosmetic?

[00:27:39] Right? You go on and on. That’s why it took me 90 days. Because we had to go through every one of those scenarios and I had to train on. And it’s just a little bit more in depth. My least renewable person, I was able to train her in two to three weeks. And you’re right. And so by the training and by creating the KPIs and then by having a weekly meeting with structure.

[00:27:57] Right. So nothing gets me more fired up than having a meeting, just to have a meeting. And then we sit there and we sit there for an hour and I literally just wasted not just my time, but everybody else’s time all because we don’t have any structure. So I’m a big fan of EOS. I’m sure that you have something that’s very similar to a meeting structure.

[00:28:15] Jason: We call it DoorGrow OS.

[00:28:16] Pete: DoorGrow OS. So DoorGrow OS. So if you’re not part of DoorGrow, join DoorGrow and get on the OS. That’s like number one, right? Because if you just get your meetings in order, you will see an increase in productivity just like that. So by the way, the maintenance team that I built, they always reported to me, even when I sold, until the day I sold the company. I just had a soft spot for them. I like maintenance. I know I’m weird that way, but I really did. And so they reported to me. My other team, I had other supervisors. I actually had supervisors in Mexico that were managing the other team members in Mexico. And that supervisor report to somebody in the U. S. or to report directly to me. But I still had my weekly meeting with my team every week. And we had our OS and one of the questions I asked every week, there’s two questions that were always number one was always. “What can I do as the business owner to make your job easier?” I think there’s a, I think there’s a sphere, a circle, right? My job is to take care of my team. My team’s job is to take care of the client. The client’s job is to take care of the business and the business job is to take care of me. That’s the circle right? So no the client is not always right. And let’s do what we have to do to make sure that if we did mess up, we want to make it right. And I get all that. But how can I make my team’s job easier? And that could be, I need to go talk to Sandy in accounting because she’s not doing something or it means, “Hey, can you create this report for me?” I need a whatever it is. What can I do? Then the last question I asked on every meeting was what is your stress level on a scale of one to 10? And this was really important because it does two things. Number one, if somebody is a 10 plus for three weeks in a row, they are ready to punch out. Yeah. No one wants to work in a stressful environment for more than if we can see that Hey, it’s summer, we’re a little short staffed, you’re going to be stressed for next, six to eight weeks, but there’s a, but we’re going to do X, Y, and Z to get out of it, I get it and people will handle stress for a short period of time.

[00:30:05] The second thing is, believe it or not, sometimes people are stressed out and has nothing to do with you or your company. I know we all think it’s about us and our company, but personal stuff. So one time I actually. And so if anybody’s 10 plus and I want to talk to them, I do it off the meet. Like we have a one on one say, “Hey, stay on everybody else. Get off the meeting, whatever.” Yeah. And I had this one lady 10 plus and I said, “Hey you’re usually a two what’s going on. My brother got hit by a car right now.” What this does is everybody’s always asking me how how can I, how can I bring my team, my remote team into our culture. This is a great way, right? Because at the end of the day, just like you, you want to give time to your owner clients and you want to build relationships, you want to build relationships with your remote team. And so by, by taking an interest in them as human beings.

[00:30:52] Right. It doesn’t mean you have to give them, I’m not going to, I didn’t fly down and give them a whole bunch of money. I just listened and I cared that her brother was doing okay. I would ask, and it was just an emotional human thing. My team, if your team, if your remote team know that you actually do care about them. So if your remote team knows that you care about them, they’re not going to leave you for a 50 cents more or a dollar more an hour. They’re just not. Because most of the time, if you’re paying them a fair wage. They are making more than enough money to cover their, what I call their nut, just to cover their living expenses. So they’re not going to leave because the grass isn’t always greener and they are freaking happy.

[00:31:28] If you make your team happy by asking them, how can I help? How can I make your job easier? And letting them know that you care about them as people. That’s the, that’s like a number three question I get, right? Number one is how do I train them? Number two is where do I find them?

[00:31:41] Number three is how do I make a part of the team? This is how you make a part of the team, right? By, by advocating and just throwing a bunch of throwing a bunch of stuff on them and letting them go. That’s not how you do it. And by micromanaging, I’m saying, I want to see all the screenshots. I want you to write down everything you did from this time to this time.

[00:31:57] And if you take a 15 minute break, I need you to punch out and punch in. Right. You said it earlier. You manage by results. That’s what I do. Do I care if you put 40 hours a weekend? I really don’t. I’ll pay you for 40. But if you get if if you’re available and I need you, right. So I have managed on availability first, it had to be available.

[00:32:16] So we have policy. We use Slack. If I Slack you, you Slack me back within 30 minutes. If I email you, you email me back within four hours. If we have a meeting, you’re on video and you’re in your home office. None of this Starbucks crap, none of this on the beach crap, like you’re in your home office, you’re working, right?

[00:32:30] So availability is number one. Then number two is KPIs. Are you meeting or exceeding your KPIs? Number three, and if I have the right KPIs, I can just look and if it’s green, I know that position is doing well. And then number three is escalations. Am I getting calls from our clients or from internal members of the company saying that you’re not, that you can’t, that you’re not doing your job or you’re not getting back to them or whatever.

[00:32:53] Those are the three things I need to know. I don’t need to know that you’re moving your mouse every 30 seconds. I could care less on that. If I got those three things, I know, and again, I know I have the right people because I hired them based on my core values or the company’s core values.

[00:33:06] Jason: Yeah, totally. We do a lot of the similar things at DoorGrow. Like one of my mentors would say, cadence is culture. And I really believe that the cadence of your meetings creates the culture. It really does. And this is where you’re able to set the culture with your team. And we ask questions like, where are you stuck? How can we support you? We do caught being awesome. We, and I think what team members really want more than money, a lot of entrepreneurs, we like money, right? We don’t hate money. And so we assume mistakenly that’s the highest priority for all of our team members. Well, I’ll just give them bonuses or I’ll pay them more. The reality is most team members. With the exception of maybe entrepreneurs and salespeople, most everybody else on the planet would prefer once their basic needs are met, financially would prefer to be recognized rather than get a bonus. And so creating the right cadence and creating a system like DoorGrow OS allows the team to be seen and recognized for their accomplishments strategically and moving the business forward.

[00:34:03] And that prioritizes that we find that if you can get those three systems in place. The planning system, that’s DoorGrow OS here at DoorGrow. The people system, we’ve got DoorGrow Hiring, Applicant Tracking System, etc. And the process system, we’ve got DoorGrow Flow and some other stuff. If you have these three systems in place, these are three of the biggest profit levers you can get in place.

[00:34:23] And a lot of times people try to skip those three and jump right into profitability and micromanage through just more severe actions, more severe KPIs, and trying to control more. Thinking they can squeeze more blood from the stone when if they did these three profit levers, we’ve got clients that are hitting amazing profit margins.

[00:34:42] They don’t even have KPIs because they don’t even need them because they trust their team members so much and their team members are really great culture fits and really motivated. And so focus on those three profit levers first, and you’re going to make a lot more money. And really what happens is you get three times the output from good team members.

[00:34:59] Easily and they can be anywhere. And what’s, what I love about being able to have a remote team, we’ve got team members all over the place. Some of the U S Canada, Mexico, one’s in London now, Philippines. I’m able to hire the best. I’m able to hire the best, no matter where they are. And I’m able to also for certain roles, get, make sure it’s really affordable for the business.

[00:35:20] And so we’re not, I’m not too particular about where they’re at or what they’re doing. It just needs to be a price point that we can afford. And I need a really good outcome. And if we can get that, then that’s the ideal. And it’s easier for me to run things remotely than if everybody were interrupting me coming into my office all day long, it’s a lot quieter.

[00:35:42] And I feel like everybody’s able to get more done, but we’re able to create that connection in our daily huddles. We check in with everybody, ask where they’re stuck. We do one on ones like you were talking about. All these things to figure out where everybody are at. The one thing that we do that I think is really impactful is we have our team members do time studies, not as a punitive measure, as a way to support them and figure out how to get them additional support and help.

[00:36:05] And this is where we figure out which, what are their plus and minus signs. So Adam, who’s been on my team for almost, I think almost a decade now. Yeah. I’m like nine years. And he started as a content writer and he’s done multiple time studies and every time he gets really honest with me, he’s these are the things I don’t enjoy doing anymore.

[00:36:21] I’m not enjoying doing all this writing. I’m, what do you enjoy? I enjoy interacting with the clients. He now manages our entire department for websites, branding, all this. He’s got a whole team under him. Whereas nobody initially would have thought, Hey, Adam is a manager, but he by default naturally became one because we just got him the support he needed.

[00:36:40] And so he’s been, he, and that’s how we’ve been able to retain Adam. And the cool thing about retaining team members is they’re like wine. They get better with time. Better and better. And so Adam knows lots of ins and outs in the business. He’s super adaptable and versatile, and we’re able to use them for billing related stuff and website stuff.

[00:36:58] And there’s so many things over time that he’s developed and absorbed and learned. He can run significant pieces of the business for me if necessary.

[00:37:07] Pete: Well, I’ll give you a funny story because, here I am teaching and telling you, oh, here’s how hire people. Right? So when I first started VPM Leon, who is our onboarding guy now came over and he was with me at mind and he was with me at empire.

[00:37:20] So I’ve known Leon and I knew he had our core values, right? And so we’re like, maybe eight months in and I go to one of my business partners and I go, “Hey man, I don’t think Leon’s working out,” and he’s like, “really?” he did the, I called the Mongolian reversal, right? Because he basically takes my words and he puts them right back at me.

[00:37:34] He goes “let me ask you what’s his job description?” And it’s crickets. So I’m like, “yeah, he don’t really have a job description.” He’s ” what’s his KPIs?” I’m like, “yeah, we haven’t really got to that.” So he’s like, “how much have you trained him?” And I’m like, “all right, enough.”

[00:37:45] Basically, Leon was the right guy. I just didn’t know what he’s supposed to do. So how did he know what he’s supposed to do? So then I got serious about the job description. And then what we realized is Leon was running about two hats, maybe three hats. It’s really like he, he was good at one of them.

[00:38:01] So we ended up hiring another guy, Angelino, and gave that hat away. And now Leon just runs and now he is. Thriving and exceeding all of the metrics that we put in his place. And he’s the happiest he’s ever been. And even though, this stuff, sometimes you have to continuously, make sure that you’re doing it.

[00:38:20] Jason: Oh yeah. We had a conversation last night about a team member that we realized they weren’t doing some things right. And Sarah put it back in my face. She’s well, did you train them on this? And I was like, No, I didn’t. I made a mistake in training. I thought they would understand it in my superficial explanation.

[00:38:38] And yeah,

[00:38:39] Pete: it’s shortcuts, right? Those three things that you put out there, the hiring and the process, it sounds so easy, right? But we know it’s tedious. And there’s, that’s a, that’s the reason. Why most entrepreneurs who are most of ’em, are visionaries, right? A lot of guys start business with visionaries.

[00:38:53] They’re not in the details. They don’t like doing that. It’s not natural, right? I need an integrator. They need a, they need an integrator. I’m guessing Sarah’s the integrator. I’m the integrator. I’m guessing you’re the visionary, right? So they need an integrator to, to literally do that stuff and you get, like I said you, when you do it you get it back in perpetuity, like it just, once the system is complete, it’s just tweaking. It’s not rebuilding, once, and and but a lot of visionaries, they skip that part because they don’t like that part.

[00:39:18] Yeah. I agree. It’s from hire a consultant or hire the, hire somebody that, that likes that stuff.

[00:39:23] Jason: Yeah.

[00:39:24] Sarah: And I love that you just keep like, thank you for continuously driving home the point. Like you have to train people. You have to. And a lot of times what we see is we see doesn’t matter your location.

[00:39:34] Doesn’t matter your size. Doesn’t even matter what industry you’re in. People hire out of pain, which makes sense, but they’re in so much pain that they’re like, Oh, they think as soon as they hire somebody, they’re like, Oh, like I’m, it’s solved. It’s not solved yet because you haven’t trained them.

[00:39:48] It’s still your problem until they are properly trained. And it does take time. So for a period of time, when you hire somebody, your life is going to get worse. You’re going to be taking on more if you want them to do a good job That is what has to happen because if you hire somebody and you’re like, “here just have it like baptism by fire figure it out go ahead and do it.”

[00:40:09] It’s not going to work out. You’re going to be frustrated They’re going to be frustrated and it looks bad for both people and then you guys are both frustrated at each other and you’re like Why are they not working out? And this person is like I didn’t even get training. I don’t like you’re mad at me all the time.

[00:40:22] And I just I don’t even know what to do, but you didn’t tell me what to do. Help me.

[00:40:25] Pete: I’m not going to hire people because I just, there’s no good people out there. Right. It’s just, when I was telling you that story about training the maintenance team, I was trained about two hours a day on the maintenance, which is a little too much, probably an hour and a half is probably the maximum we can take.

[00:40:37] But I was doing two hours. That didn’t mean that my 10 hour day. was still a 10 hour day. It became a 12 hour day because I still had 10 hours of work. I had to do, I just took on more, two hours of training. And a lot of times they ask more, a lot of times it’s even more than that because as you’re training, what I have found, and maybe you guys see the same thing is as I’m training, I actually learned a lot more about my processes and about my company, and then I realized, oh.

[00:41:00] There’s no policy here. Oh, there’s no field for that. Oh, that’s just in my head. However, I feel that day I’m going to, I’m going to judge on that. And so I, there was a lot of work that I ended up having to do as I’m creating the, to training, oh man, this process is not exactly at all what I thought.

[00:41:16] Jason: Yeah. Yeah. Cool. Well, Pete, this has been an awesome conversation. We appreciate you coming on the show. Why don’t you tell everybody just a little bit about VPM solutions. Do a quick plug and how they can reach out and connect with you.

[00:41:30] Pete: Yeah. So, thanks for that. So VPM solutions is an online platform that connects property management companies with remote team members.

[00:41:38] It’s a direct hire, so they don’t work for VPM. They work directly for you. You negotiate the hourly rate. There is no upfront cost and there’s no fee to use the site. So it’s all free for the company managers. The way VPM makes money is the virtual assistant. Pays 10%. So when they apply to a job, they have a breakdown of this is how much hourly rate that I’m applying for.

[00:41:59] It is how much that BPM charges a platform fee. And this is how much that I’ll get. We also have about 20, I think 23 free training. So, there’s training on the site from fair housing to marketing, social media, to pro we have a flagship property manager, one on one courses. It’s about nine 12, 12 courses, nine hours of content.

[00:42:20] Wow. And it’s there just to teach folks the basics of property management. No, you’re not going to hire them and they’re going to be able to run and be a property manager for you, but they’re going to know the ins and outs of the verbiage of just the life cycle, like high level stuff. But it’s our attempt to get people trained up so that when you, so that when you get them, they’re not like that, at least they’re crawling.

[00:42:44] Right. Yeah. They have a little bit of deal, a little bit of information. And then we also have we also have some free resources that are on the side as well. Like we have I think we have 50 job descriptions with this profiles that we assume, assume assumptive this profiles.

[00:43:00] We also have like org charts, like what you should, or chart should be as you grow your business. And then we also have just a list of all the vendors and resources and all the different Facebook groups and all of the conferences that are out there for profit management.

[00:43:13] Matter of fact, you’re actually on that site by the way, as a vendor. So, yeah. So. That’s what we do. And then we also offer what we call the white glove service. It’s a free service that helps you go through the hiring process. Because we, what we realized early on, it’s a do it yourself platform, but what we realize is most people don’t have a hiring process and no idea what to do.

[00:43:34] So we guide them. Now your team your clients probably have a good hiring process, but we’ll offer, like we’ll offer that free white glove service to them as well, if they want to come in and just. Need a little bit of help. What should they ask before they interview? There’s some red tape.

[00:43:47] Like we say, you get a disc profile, and then the, we have these courses that they take, they get certifications, you can search based on those certifications. So it’s really the only platform literally built for property management.

[00:43:57] Jason: Love it. Yeah. Very cool. We’ll check it out. So everybody make sure you check out Pete Neubig’s VPM solutions.

[00:44:04] Take a look at that. And Pete, thanks for being on the show today. It’s good conversation.

[00:44:08] Pete: Yeah. Thanks guys. Thanks Jason. Thanks Sarah. Appreciate you.

[00:44:11] Jason: All right. So if you are a property management entrepreneur, you’re wanting to grow or add more doors or you’re struggling with dealing with your team, reach out to us at DoorGrow.

[00:44:19] We can help you with this. We do this all the time. We would love to support you. We have clients that are easily going from, we can help you scale anywhere from zero to a thousand plus, and anybody can do this in the next three to five years. We would love to support you, help you scale your business and help you save collapse a lot of time and not have to go through a make.

[00:44:37] So many mistakes in your business. And so until next time to our mutual growth. Bye everyone.

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