Episode 24: How To Use Systems in Your Multi Family Business

As your multifamily business grows you reach certain milestones where you have to make decisions that can make or break your business. Listen to David Lindahl interview Jesse Worcester about the growth of his multi-family business that he owns with his brothers; how they developed systems and overcame obstacles to continue its impressive growth.

Speaker 1: Stay tuned for a special edition of the multifamily deal

Speaker 2: Podcast. What actually happened was I just said, we know we want to hire someone like yourself. Can we just consult with you You can be a consultant to help us hire someone because you’re going to know the questions to ask. She helped us hire someone. It didn’t work out. That person stole from us. We caught it quickly. And at that point, it just so happened two and a half years that we’d been developing this relationship. At that point, she said, you know, I’ll, I’ll do this. I’ll, I’ll take the take on this role.

Speaker 1: Welcome to the multifamily deal lab podcast, where we dissect a deal before your eyes and ears. So you can discover the strategies and tactics that got each deal to the finish line strategies and tactics that you can put in your own toolbox to get you to the closing table from sourcing the deal, raising due diligence to the property takeover, multifamily deal lab shows how you too can get the deal done. And now here’s your host. David Lindahl, everybody welcome to multifamily deal lab. I’m your host, Dave Lindahl.

Speaker 3: And on today’s podcast, we have Jesse Worcester, Jesse and his brothers came into our system into our community. I don’t know how many years ago, Jesse.

Speaker 2: I know we were reading about you and Andy as early as 2009. And I think shortly thereafter started going to events and, and got involved.

Speaker 3: Yeah. So I think the process was you got the book, then you ended up getting the home study system and then you went out and did like 400, 400 units, I believe. Yeah. And then, then you came to an event and I remember meeting you and your brothers at the event and saying, yeah, we did 400 units off the home study system. And I was like, wow, that’s awesome. And then you came to the event and got involved in coaching and started coming to the different events. And then, and then you went off, you sailed away like some people do and

Speaker 2: We’ve kept the same. I mean, it’s a Testament because we’ve literally kept the exact same business model. And so, yeah, we’ve continued growing, but really using, using the same system, the same principles, as when we first started.

Speaker 3: And you’re now up to how many units,

Speaker 2: So we’ve transacted on, we’ve purchased a little over 4,000 units, but we’ve had 800 units that have gone full cycle. So we own and manage 3,200, but 4,000 total.

Speaker 3: Nice. So I say we reconnected just a few weeks ago now because yeah. So this is, this happens a lot at different times. So people come through the system, you know, they’ll get educated and then they go off and, you know, they get really busy in their business and they stop coming to the events because they’re so busy. And then, you know, a few years later we hear from them again and they exploded. Right. And that’s exactly what happened with you guys. And, that’s excellent. So, give us, so give everybody your background story or where you’re from, what to do. You guys are unique situation, your three brothers, and then, and then how are you going into your first deal Our background, my brothers

Speaker 2: And I, we grew up in Eugene, Oregon. father was a lifelong pastor, a mother, a third grade school teacher, so lower middle class, but sports was kind of this thing that brought us together. And I always say that was kind of the foundation of our business because what we had with sports was this shared, really just obsession. And we spent, you know, basically our entire childhoods up through college, we all played a small college ball with this shared passion where if we’re not playing, we’re practicing, if we’re not practicing, we’re talking about it. And that just transitioned as soon as we got out of school and, and, basketball, that transition from sports into business. So started our business in 2006. And, our first deals, we start out doing single family homes, duplexes, that kind of thing. And by, by 2009, I really see that as the real impetus or the real beginning of our business.

Speaker 2: Cause that’s when we started buying our larger unit properties. our first actual deal was a 60 unit deal called city view lofts, or we renamed it that, and, it was a no money down. we actually got 80,000 from the bank to buy it. owner was underwater and our whole pitch was we could take this over and we could turn it around. And so that was, it was nice because we didn’t start with any of our own money. So we were raising money even on the single-family homes. We were raising money from investors from the get go. And so that was a nice kind of larger unit property to be able to get into that we didn’t have to raise money for, but about six months later, we bought a 96 unit.

Speaker 3: Let’s go to 60 for a minute. So what made you jump to the 60 Did the opportunity present itself Did you, did you start getting interested in a month I family properties at the time it was, it was, it was it the I’m interested in multi-families and therefore I saw the 60 or was it I saw a 60 and I decided to learn about month. IBM.

Speaker 2: Yeah, that’s a great question. So one thing I’m very, very passionate about talking about is just scale and company scale. And one of the most important elements of scale in my opinion is to start with something big in mind. And so for us, it was a foregone conclusion. We knew we wanted to have thousands of units. And so it was just a matter of time, I would say until we knew we were going to get into larger unit properties. So it was once we had 150 units, that was how many we had of small unit properties. And so, and we definitely were reading your materials and, and realizing, okay, there’s a playbook that we can follow. And this is something that’s doable and we know we can do it. And so I think a real important distinction is we had that big picture goal in mind kind of from the very beginning. So it was a natural thing for us to, to continue growing. So we had started out with single family then duplex, I think the largest we, when we bought 60 was like 16 unit or a 20 unit deal. So it was kind of a, it was definitely a, a stair-step grow.

Speaker 3: Yeah. Even a 16, 16 unit deal from singles and duplexes is there’s a big jump. Yeah. Because as you know, every, every leap you take comes with fear and anxiety and a little bit of the unknown, and then you get there, you get comfortable and then you look at okay, what’s next. Exactly. I think it’s until you get to like 150 to 200 units, and then that parent anxiety starts going away. And then all of a sudden you see like a 700 unit portfolio, it’s like whole, all right. So now how do I analyze this How do I take this down But, okay, so you did the 60 and what needed to be done to that particular property.

Speaker 2: So it had a bad reputation. We knew we needed to, first of all, change the reputation, but we had a, we had a rehab, we redid a bunch of the main hallways redid all of the units flooring in all the units. I think looking back on it, I would call it a light value add now for us at the time it was a significant value add. and so, yeah, we, we just, I go back to kind of a common theme in our earliest of years was being willing to do whatever it took to be successful. And so there were elements of the rehab that we didn’t necessarily understand, but we, we had the ability to talk to contractors and just ask 101 questions. And there was a point where you just, if you work long enough and you put in enough time, it starts to make sense.

Speaker 2: You’re like, okay, we can’t put fancy tile in this whole place. We ended up doing like a VCT tile throughout the whole place. And we just asked a lot of questions and we’re like, what’s the best product we can put in there for, you know, what’s that, you know, cost, and benefit analysis probably didn’t even know what that term meant at the time. And so just, just the key at that time in our, at season of our business was just being willing to put in a lot of hours and ask a lot of questions, but all of the different elements of the rehab, we knew we had kind of a limited budget. So it was like, you know, we’re going to do the best we can with, with what we have. And we had a small team of, we had a couple of maintenance guys who were employed by us.

Speaker 2: And so, we did, you know, all of the work in house because we just couldn’t afford to hire contractors. we hired out, you know, subbed out a little bit of it, but, and, and that was the first time that we, this is, I think a real important distinction. That was the first time that we could ever hire someone in the property management industry that just blew us out of the water in terms of her experience. So that was another kind of, thing that pushed us over the edge to want to go to larger unit properties is we knew our calling wasn’t in property management and that there were a lot of people out there that have way more experience than us. And so we hired someone who I talk with. They’re no longer with our company, but we just have, still, still close with them and have a, a soft place in my heart for them because they were with us for a number of years.

Speaker 2: And we’re just, being able to let, that’s a kind of going back to that theme of scaling. We knew that the only way we were going to scale is by finding people who were, who are smarter than us, who we could leverage their time and expertise. And so that was another part of that deal. So we hired the person think 30 days before we closed on that. And I’ll never forget. I mean, she had that property. We all were working there together, but she deserves all the credit. she had that property leased up, turned around in a very short amount of time. I think we completely turned it around in like three months.

Speaker 3: All right. That, that’s what I want to focus on during, during this particular podcast is scale. So, and how you go from where you were from doing the single family, and then all the way up to having a portfolio of 3,200 units and doing 4,000 total. So when you guys first started, you started flipping and were you holding single families as well

Speaker 2: Yeah. We always had this, our kind of origin material that we read. We read like rich dad, poor dad. And so we knew we wanted to have cash. The cash cashflow was like a big, really big focus of ours. And so every property really that we’ve ever bought, we’ve always bought it with the intention of holding it long-term, but there’s plenty of situations where we we’ve ended up selling just cause it, it makes sense. But on our single families, we were, I don’t think we’d sold anything at that point. so yeah.

Speaker 3: How many units did you have on the singles

Speaker 2: Singles I call them smaller unit properties. We had 150 units and it was a total of 50 properties. So the average unit size was about three units, but it was everything from single family homes up to our largest was about 16 to 20 units.

Speaker 3: Okay. So it’s the, you start off with the three of you. What were the different roles that you all played

Speaker 2: Boy well we all, so we are from Eugene, Oregon, and we all moved out. So our brother Paul moved out, I moved out shortly thereafter and then Joel moved out a little, a couple of years after. And

Speaker 3: So you’re talking about moving out to Kansas. Yeah. Moving

Speaker 2: Out to Kansas. Yeah. That’s where we’ve been ever since. Why did you choose Kansas We had a connection and it was actually a pretty easy decision. We just ran the math on how we could cash flow on the coasts. versus we had a connection in Kansas city and we just ran some numbers and it was night and day. The, the ability to cash flow, just the cost of living the cost of, of, of rent. I remember the math that we did was we found that we could buy for as low as 30% of the cost of where we were from in Oregon. And yet we could still get 80 to 90% of the rent. So simple math there. It’s like, if you want to, if you want a cash flow, we knew we were in the wrong state, so, all right.

Speaker 3: So you separated your roles out from strengths. Is that what you did at first

Speaker 2: I really have to emphasize just this. there’s a season where you have to wear so many different hats. You just, it, it was a constant juggling of the Baton. We’ve kind of we’re all. So we all together always made buying decisions. So it was, we came together and it was like, is this a good deal And, it was, we would usually go with the most conservative view. so if one person was like, the most we’ll pay for this, duplex is 40,000 and the other person was 38 and the other person was 36. We said, we’re going with 36. and that’s the way we would have that BR our deciding factor, but definitely over the years, my brother Joel has kind of a real strong suit in, managing others. And so he’s had a very operational overseeing the team, but in the early days we didn’t even have a team.

Speaker 2: So, so that’s something that morphed over time. Definitely in the early days, I’m kind of a quick learner. I always joke that I was like the spackle of the business, wherever the biggest hole was I was jumping in, if it was a new property where we were buying, I was jumping in and working on that. If there was something going on with our taxes, I was jumping in and going and working on that. And then our brother, Paul was always his kind of spearhead role was acquisitions. So he was always the one spending the most time, just, looking for new deals. Right. So that’s shifted a lot over the years. We’ve been, you know, it’s a decade plus. And so a lot of, a lot of shifting of roles though.

Speaker 3: All right. So you hire your first employee. Who was it What were their assignments and at what size were you So we hired her

Speaker 2: First, two maintenance people. They were part-time. and our, I think out of our first eight hires, only two of them were even remotely successful. So I think that’s a good lesson for people to hear. I remember I hired someone, they were, this was right in those early days. And after hiring them, I realized that they didn’t know how to use a computer. I mean, talk about not a great job on my part of properly vetting that person. And so it was very quick, you know, it’s a lot of the work that they had to do was on a computer and it, it ended up not working out pretty quickly. So I’m a huge believer of the theme of being quick to fail. Fail is inevit failure is inevitable and we were good at let’s get out there, let’s fail and let’s not make that same mistake, you know, two, three, four times in a row. but that’s an example on those hires, we said, we need help and we’re going to hire someone. And so it took us a while to get good at hiring. But yeah, the first two people that we hired that stayed with us for a period were maintenance guys. And that was definitely just an area that we had the least amount of knowledge

Speaker 3: I’m going to use. Where are you at Do you think,

Speaker 2: You know, 20 to 30, something like that.

Speaker 3: All right. Okay. So you said you had about 150 of the smaller unit unit size deals, then you jump up to the 60. Yeah. All right. So then you, and was that when you hired that manager, was that the next skill level that you hired Or you said you hired eight maintenance guys, a couple of them stuck. Was there anybody in between that, those people in your, the manager that you hired

Speaker 2: So we had two maintenance guys and then I think by the time we were at 150 units, we had at least another one. and, two of them part-time yeah, we had, we had kind of scaled up and at that point out 150 units, we had like a maintenance supervisor with two people underneath him. And he would, he would work with any of our contractors or anything like that. He was definitely had scaled up on the maintenance role and we had help in the property management, area. So we had people who had done some leasing people who had done some, you know, some of the administrative part, but none of them had really stuck. And so this hire was someone who, her experience was running, you know, two, 300 unit properties. She could run a whole team, the maintenance side, the reap, the construction side. She actually had a lot of construction experience and all the administrative. So she basically her pitch to us when we were interviewing her, interviewing her, she said, just give it to me, give it all to me. And I will run it all for you, which was music, music to our ears,

Speaker 3: Music to your ears. But how much fear involved was there in that

Speaker 2: We had trot It was, it was actually, it’s funny when, when you, when you say fear, because I think a fear of being associated with a risk, but there’s, there’s, I think a lot of people don’t think about the risk of not taking action. and I see a lot more risk of like, it would have been way riskier for us to not take that action because we would have been basically committing ourselves to doing the same thing over and over. I would have it, it was more like we were happy to take the risk and it was like, let’s just have a plan B if this doesn’t work out. so I think it’s, we’ve always all of my brothers and I we’ve always had this approach of, I think it’s a greater fear of not taking action. and so, so probably lower than most in terms of the amount of fear we had in that decision.

Speaker 3: Yeah. I think what I was referring to is the fact that you are handing everything over to one particular person, and if they don’t work out, you know, then that’s not good.

Speaker 2: We were very hands-on at this point. I mean, we’re all working in the same office. So, this person had the capability to take it all, but if they weren’t working out, we would have known it, you know, pretty quickly

Speaker 3: Hands on trust, but verify yes, very much.

Speaker 1: Alrighty.

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Speaker 1: So how did you,

Speaker 3: So she’s, she’s used to getting two to 300 units, or managing two to 300 units. So why did she want to come and manage your particular operation

Speaker 1: We definitely sold her on, we have big plans, big goals. She took about a 35%

Speaker 2: Pay cut, coming to, to join us. But she was moving from the heart of Kansas city to a sub market. We started in a smaller sub market, a population of a hundred thousand, about 45 minutes North of Kansas city. So she knew she was intending, to take a pickup. But even at that time, we were one of the largest owners of property in that city, city of St. Joseph, Missouri. And so we were probably one of the few options that she had and, you know, she had an opportunity to really take over the reigns and have a lot of control and a lot of autonomy. And so, yeah, we definitely sold her on, you know, the potential. That’s some, that’s a common theme. We’ve had, we, if we look back over the years, we’ve had multiple periods where we hire for someone that technically we could easily get away with not having at that period, but we’re hiring in preparation for growth that we know is about to come. And so that was just one example where someone has to believe that you’re going to, if you hire in that situation, they have to believe that you’re gonna take those steps and continue growing. And I think our track record up to that point was, Hey, these guys, these guys are buying quickly. I mean, th they’re doers, they’re not,

Speaker 3: That’s a key point that you made because you hiring for the future. Yeah. It’s not where you are not where you’re going to be. And that’s the smartest way to hire if you read the book good to great. And that’s a

Speaker 2: Pretty obsessed with

Speaker 3: Yeah. And they constantly talk about that about hiring for the future. Exactly. And it pays off, certainly pays off. Yeah. all right. So, and the benefit of bringing in somebody like that is they bring in systems systems that are systems and processes that are already working or proven. So you want to talk about that a little bit, how that changed your business.

Speaker 2: Yeah. Systems is something that I’m really passionate about. And what I’ve learned about systems is there’s a spectrum and you’ve got these bohemoth companies that definitely at times can over systematize, you think of the slow, red tape process of like a large bank or something like that. And the complaint is, well, they’re not very nimble. and then you’ve got the, just absolute startup where there’s no systems and yes, they’re nimble, but the complaint is it’s, it’s really hard to scale. And so what I found is, is for each different department and E for each different division that we have, you have to look at where it is in the growth cycle and put systems in place that are appropriate for, for where it’s at. So at that point we had no systems. It was all just in our head and our kind of backstop was we were there watching everything that was happening and, you know, something is not going to fall through the cracks because we’re right there.

Speaker 2: When she came on, we didn’t put in a bunch of systems, ourselves was the system. And so that was, th there was a trust factor there where we said, we’re just going to trust her to do our thing, but we fast, you know, fast forward five plus years from that time. And we realized, Oh, we can’t have, because we continued growing. And we realized, Oh, we can’t keep things in where it’s all the information is in someone’s head. and so that was something that, you know, we didn’t do it the right way, so to speak. We’ve we, that’s something that, we’re actually now, you know, we’re at over a decade in to our company and now is, is a period where we’re really going company wide and, and putting in more systems. but that’s something that I think historically, we’ve, we’ve done, you know, it’s not been a strength of ours is we know systems are important, but we’ve re we’ve, we’ve really emphasized, which is another part of scale that I’m really passionate about is people great people. So we really emphasized having great people, but in order to really scale, you not only have to have good, great people, but then also document everything really well as well.

Speaker 3: Absolutely. Yeah. Okay. So you went from 60 units, did you say 115 was the next one

Speaker 2: 96 was the next, which was just later that year. It was like five months later. and then 107, just a couple of months after that.

Speaker 3: All right. And so now you have three larger properties and a lot of smaller properties, and you’ve got the property manager in place. Now you’ve got on the site at the a hundred unit or the 107 and the 96. Correct. So, so what systems did you need in place in order to over the I’m assuming that they’re onsite employees

Speaker 2: Yeah, so we had at the 60 unit that became our corporate headquarters and we operated the 60 units and the, the scattered sites is what we called them, the, the, the other 150 from that location. So that was one staff and that’s, you know, 210 units total. Then the 96 unit was a dedicated staff. And then the 107 unit was a dedicated staff, but that same gal, was at that point now kind of starting to become more of a regional supervisor. Cause she had more, she had other property managers that she had to, to oversee.

Speaker 3: Okay, good. And then you go from to what happened the next year How many, how many properties did you get

Speaker 2: Well from there, we just, it just continued scaling that that at a hundred at roughly 400 units is when we grew down into Kansas city. So we had, basically, we were at the point where we said, we know every single property in this market, we know who the owners are. We know why they’re selling, and what price they’d sell for or why they’re not selling. And we said, if we’re going to keep growing, we have to expand our radius of where we’ll buy. And so we expanded down into Kansas city, bought our first 150 units, then 185 units. so it was probably another 300 the next year. So now, now you’re close

Speaker 3: To a thousand

Speaker 2: Coming up on. Yeah. Coming up on a thousand, they start to blur together. We, we, we each, each year, if you look at our history, I love to use the, the analogy of the, the domino illustration, where you see, start with a domino, that’s a toothpick. And if every domino can hit over another domino, that’s about 150% of its size and 29 Domino’s later. And it’s the Eiffel tower or, or the, the empire state building, excuse me. And so that was real that’s if you look at our growth, it’s that it’s, we’re always growing just a little bit more than the year before. So it kind of has that, that curved growth pattern.

Speaker 3: So you’re close to the a thousand unit Mark and what I know my own, my own investing, and then watching people do this through the years, teaching since 2002, that’s like a, that’s an influx point where you need to have certain infrastructure in place in order for you to get to the next point, which is about 2,500, right If you don’t have the infrastructure in place, then you are at risk of imploding. And if you do, then you can, you can start scaling successfully. You want to talk about, you know, what you needed to have in place for a thousand and, and what you needed to change to get to 2,500.

Speaker 2: Yeah. So this is, I feel like this is the exact same conversation as when we were at 150 units and we were hiring, we were hiring for what we knew needed to come. And we hired someone who had the skill set. So we were at 150 units and this person, their whole world that they spent time thinking about was two to 300 units. So we knew just based on their experience, we knew we were hiring someone that had the capacity to handle more growth. So the same thing goes out a thousand units, which is you have, I mean, our structure right now is we have regional supervisors, regional supervisors. Typically I kinda oversee, you know, 800 to a thousand units. But once you go beyond that regional supervisor, lots of people in the industry call it something different. But director of asset management or a president, someone who can’t, who their whole focus is overseeing multiple regional supervisors.

Speaker 2: So someone who their world is two, 3000 units. And so our growth, it’s just, one of the common themes that we always say is we invest in assets. That’s what everyone knows. We buy multifamily real estate. We invest in and other assets now as well. But the number one asset that we invest in is people that is the core, that’s the foundation. And so at every juncture, it’s always who, who is the right person or people or team that we to have in place that can handle this growth. And so we probably, at each stage, you could argue, if you were trying to play devil’s advocate, we hired a little early, but that’s essential. And if, if you’re wanting to continue growing. And so, yeah, it was right around a thousand units that we hired a president. And I think it was over two years, I had been wooing her, trying to, I first started out and befriended her.

Speaker 2: And then she kind of, we had a lot of similar interests. She was a, I can’t remember her title, but she was overseeing between three and 4,000 units. And two years we just built a friendship and I would call her and ask for advice and ask for, and what actually happened was I just said, can we consume We know we want to hire someone like yourself. Can we just consult with you You can be a consultant to help us hire someone, because you’re going to know the questions to ask. She helped us hire someone. It didn’t work out. That person stole from us. and, and yeah, that’s, we’ve got plenty of stories, but, but, yeah, so that person stole from us. We caught it quickly moved on. And at that point it just so happened. You know, it was like two and a half years that we’d been developing this relationship at that point. She said, you know, I’ll, I’ll do this. I’ll, I’ll take the take on this role. And so we brought her,

Speaker 3: What was her experience How many units,

Speaker 2: 30 years in the industry, and her whole experience was she had, I’m trying to remember that the history, but she had, she had overseen 3000 plus units for like over 10 years. So that was like a total comfort zone. So her whole, whole, her whole world was how do you successfully manage, you know, her direct reports where anyone, you know, over construction, head of maintenance as well. And then a couple of regional supervisors, that’s kind of the whole world. And so her world was systems, company culture, things that when you’re at that regional supervisor level, when you’re at a thousand, you know, you’re overseeing thousand units. Sometimes you haven’t had the time or the experience in the industry to think about those things that would be necessary when you have, you know, a couple thousand units.

Speaker 3: Excellent. So you did it in terms of, of growing your own management company, as you got a larger, a lot of people will start off managing themselves. And then when they start getting to bigger properties, they’ll third party for awhile. And then in about 2,500 units, they have a decision to make, you know, am I going to continue with third-party, which the biggest complaint with third party is the decisions that they make don’t get acted upon in a timely manner, you know, and, and the fact that a lot of times they can’t get, the data that they need in a timely manner. Those are the two biggest problems with third party management, but then they need to make that decision. Do I go third-party though Do I open my own management company, which in itself is a huge undertaking and you, you definitely have to.

Speaker 3: I remember when we made that decision to take our take on third-party ourself, I mean, do our own management company, we had a choice between we, I think we’re at about 3,800 units and that we had a choice between, hiring somebody that was managing 7,000 units for, I think was $90,000 or somebody that had managed 12,000 units who was managing 12,000 units for $150,000. And, we’ve, you know, I’m a component of good to great. And I, we bit the bullet we wanted to get the 10,000. That was our goal. So we hired the, the guy at 12,000. Right. But unfortunately, you know, true transparency is he got to a point where, he didn’t know as much as we thought he knew, you know, and he, he was one of these people that hit some facts. And the whole thing almost rolled over at 4,800 unit 48, 5,000, because all of a sudden we realized that the data that we were making decisions, basing our decision on wasn’t accurate, and it wasn’t accurate because number one, he was getting bonused and we learned what the bonus on and what not the bonus on after that.

Speaker 3: And number two, he just didn’t want to look bad. You know what I mean So we dissolve that relationship and then we get into another, a better relationship. Yeah.

Speaker 2: We had a couple, we had a couple stints trying third-party management, and our experience was, well, two things, one our talk about our experience. And then one my view, looking back on it for someone who’s kind of in that juncture of making that decision. So our experience was, we were just, so we knew that the performance of what we had was so essential to being able to buy more properties, that there was just, we felt like there was so little room for error. and, and that’s more of a, just, we, we were willing to put in a lot of hours in those earlier years and kind of do whatever was necessary to make it, I mean, I’ve done every single role leasing. and we had some not so pretty units in, in those early days, but, you know, we were out there leasing.

Speaker 2: We did collections really late at night. I mean, we learned, you know, we had those early properties where it’s like, you know, what days people are getting paid on. And, you know, you know, the, the, the days to visit which properties in which units and stuff, we cut our teeth on that. So that was essential for us to experience it in the trenches and, and to have done every single role within the company. But looking back on it, I think there is an analysis. I’d be interested to hear your thoughts on this, but my understanding we’ve never, third-party managed, but I’ve talked to other people who have, and my, and my understanding is by the time you have, let’s say 800 units, and you could warrant a hiring your own regional supervisor, that the vast majority of your time, if you were to third-party, the vast majority of your time is spent with that regional supervisor.

Speaker 2: They’re kind of your line of communication. They’re the one, the decisions. and if you scale it up and you’ve got a president, and so we were thinking this as we went and it definitely validated that we spent, when we had 800 units, we poured ourselves into the person who was overseeing everything, the regional supervisor supervisor at that time. And then when we hired our, our president, we poured ourselves into getting alignment and, and, and being on the same page with that president, my understanding is a lot of the time when you’re third party managing, if you have 1500 units, for example, and there’s a president you’re interfacing with that president a ton, you know, you’re trusting them to do the payroll and to handle the D the, the systems and kind of the, the details. So you get to a point where it’s fairly similar.

Speaker 2: Now, I’m not saying there aren’t tons of issues that work their way up. And, and it’s, it’s definitely more time, but we kind of realized, especially as we got larger, I think the difference between managing in-house versus third-party managing if, and again, because it comes to, comes down to holding someone accountable. And so if we’re going to really put ourselves in and hold our president accountable and, and everything that, that she’s overseeing kind of the same structure exists when you’re a third party managing as well. It’s, it’s, it’s a lot of work to hold people accountable in the first place.

Speaker 3: Yeah, somebody’s gotta be dedicated in the company in doing that. That’s their primary role is to oversee either oversee the asset manager, because if you’re either either way, whether you’re doing third-party or primary, it’s actually the president, if you’re doing, your own management, but yeah, somebody in the company it’s gotta be like in my company, it wasn’t me because I am not the detailed type of a person. Not like managing people, Franklin, I’m just not good at it. I’m the big picture, right Thinker type of, so, so when we decided that we were going to, and, and the most frustrating thing about third party is that extra layer of, of access to information. You know, you just, you, you have it, but you don’t have it. so, is if you have, if you have that partner in place that can oversee the asset management side of it, going down, then doing it yourself is probably the most efficient way to do it. But if you don’t then third-party, you just have to hiring an asset manager to the assets, Angelo of the property managers. Yeah, exactly. We’re running out of time. I do need to go into what’s called lightning round. Okay. I’m going to ask you a series of odd questions and you answer the first thing that comes to your mind. Okay. I love it. All right. First one is, do you like big dogs or small dogs Small dogs. How many hours of sleep do you need at night

Speaker 2: I have flexed up to over eight. Wow. I could talk about that for a long, for a lot. Yeah. You used to be way less,

Speaker 3: your favorite Saturday night, Saturday night, live character,

Speaker 2: Huge norm McDonald fan. So anything that he does or did awesome. what’s

Speaker 3: Your favorite movie Oh, star Wars. It’s sentimental the original three. Okay. Finish these lyrics. Oh, you better start swimming or sink like a stone because the times they a Bob Dylan fan. Yeah. I didn’t know that one. how, how often is it healthy to cry Weekly. Wow. Okay. What’s your favorite car Bread, pasta, rice, or potatoes potatoes. If you could ask God one question, what would it be What is the meaning of evil interesting, in the father, what you did asked her and, and, and what talk to us about deep theological concepts from a very young age, it must have been interesting to be at your dinner table. Alright. Now, last question. If a deaf person goes to court, is it still called the hearing Yes. All right. So that concludes this podcast, a multifamily deal lab with Jesse Wooster. No. I want to thank you for coming on. It’s been great to reconnect, you know, get to see you again soon. All right. Thanks again for having me.

Speaker 1: All right. Thank you. Bye everybody.

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