BIG Announcement - Special Midseason Episode with Jon Matzner

to build a different type of company, you have to play from a separate sheet of music. And I can't tell you, I remember, and it burned in my brain, I had a crew manager. I gave him the assignment of writing a process for one of our crews, like how to unload the truck. And I remember him saying, "Don't you think this is a little bit overkill? We only have 2 crews." And the next week we needed like 10 crews. And he was like, but how are they going to know what to do? And I was like, never again will I ever do anything other than play by my own sheet of music because I was trying to build— he's like, no, no, you can just stop by every install. And I'm like, that's not the kind of company I'm building. That's not— every PM guy says, no, you just go drive around and you collect your rent checks. And it's like, oh yeah, Peter took 6 weeks off without his phone ringing or 5 weeks off. But that's only because you were just playing from a completely different sheet of music. And those guys look at what you do and go, I could never do that. It's like, because you didn't march by your own set of music, because you had one customer say, can I pay with a paper check? And you said, okay.

Welcome to season 2 of Owner Occupied. On the business of property management. Owner Occupied is a show about property management in the real world. I'm your host, Peter Lohmann, co-founder and CEO of RL Property Management. For season 2, I have a different guest each week and we go deep into conversation about what actually works when trying to build and scale your property management business. Thanks for listening. Now let's go. All right. Welcome back to Owner Occupied. I'm so excited today to be here with John Matzner. We've got a special episode for you. We're in between seasons, but I've got something really exciting to share with everyone in the property management world. I wanted to bring Jon on and talk about some stuff that's coming down the pike. So Jon, if we could, let's just start by hearing a little bit about your background. Maybe you could give us like 1 to 2 minutes on what you've been up to and what led you here.

Sure. So my name's Jon Matzner. I live in Southern California right now. Grew up all over, Went to school on the East Coast, and then I joined the government. So I spent pretty much a decade kind of in different parts of the government apparatus, primarily doing national security type stuff, stuff like counterterrorism stuff, stuff like stopping the spread of chemical weapons and things like that. So I was able to live abroad for a long time, study Arabic, which was really cool, and then decided I didn't want to make a career in the government. So I got out. Wanted to get in the business game because it's something that my dad had done his whole life. He was a career entrepreneur before it was cool and had just always grown up around it and just loved it. As you'll tell over the course of this conversation, I enjoy it. I'm very enthusiastic about it. And so a couple of years after getting out of the government, bought my first business and have kind of gone from there and been able to do some really fun, interesting stuff, started stuff, bought stuff, sold stuff. License stuff, you know, just all different variations of that and really excited to talk about property management today.

Awesome. Yeah. So I was thinking back, you and I first sort of met and bonded over Twitter talking about Notion stuff, and I'd been sharing my Notion playbook and how we use it at our property management business. And then you showed me some of the stuff that you've got going on with Notion. And why don't you talk a little bit about why you developed that and what it was for. And that's going to kind of lead us to property management eventually.

So I am like a sucker for a new technology. I'm just a total sucker. I'm the easiest sales call that these SaaS guys do. I'm just so excited. I'm just so excited.

I'm like, you're like selling them.

Yeah, I'm like, I'm telling them new uses for their product, you know? And they're like, sir, I'm just the SDR. It's like, oh, okay. I had, you know, I love this idea of bringing technology and process to old school industries. The competition's not as dense. And so I had bought one, this garage upgrade company in Southern California, very much an old school business, and had experimented with a lot of different kind of technology upgrades, let's call them. Something as simple as Slack, right? A lot of companies don't use Slack, but then had tried Trainual a bit, had tried some other kind of corporate documentation stuff, and just was really disappointed in terms of its usability. Even something like Airtable I found to be— I really like the engine of Airtable, but just not very usable. And then kind of stumbled upon Notion somehow, and I became a true believer on it when I saw one of my kind of like entry-level employees had Notion up on her desk during her workday because it was so usable and so accessible and so searchable and visually pleasing. And then from that point, I moved everything possible into Notion because I saw that it was just— it was actually going to be used and referenced, not sitting on a shelf. And then the person still asks me a dumb question. And so that was just kind of the turning point for me. And now I would consider myself a power user and building stuff off the API and, you know, all sorts of fun stuff just because I've seen what a powerful platform it is.

And, and to kind of fast forward a little bit, the reason you love Notion and the reason I love Notion is that it really allows a company to scale up in a very organic and easy way. You don't have people scrambling, looking for files and folders and emails and Slack messages, and it allows you to bring in remote help and it allows you to expand geographically. In a way that was much more challenging, I think, in the past. So your garage upgrade business, you did expand that, but not in a traditional way. And spoiler alert, I got a lot of really great ideas from talking to you about this, and we've kind of got something cooking that's similar along the lines of property management. And I know you've got some great questions for me. I'm kind of grilling you right now, but share a little bit about that journey and why you chose to expand the way you did.

Yeah. And I think you just hit on something that I am so guilty of, and you caught me in a guilty thing that I do, which is I oftentimes talk about features, not benefits, whether that's offshore talent or Notion. The reason why I'm obsessed with Notion is because I was running a home improvement company and I got it so that we were installing, you know, $500,000 of work a month and my cell phone never rang. How many home improvement companies do you know where the owner, their cell phone doesn't ring? It's not Notion for pretty graphs. It's so that customer service issues were dealt with without calling me. Refunds were issued without calling me. You know, procedures were followed, phones were answered, right? It's the same thing with offshore talent, which is it's a means to an end. And that means to an end is maintaining quality as you grow. So I sometimes forget to mention that I'm not just doing this because I like pretty pictures and writing everything down. I'm doing it so that I can grow really, really fast and not work past 3 or 4 PM every day. So, okay, so yeah, you caught me in a mistake that I make all the time is I just like, I nerd out on the details and forget about like why, why this is important. So I built all that stuff because I'm a, I really like the idea that businesses are what exist without their owners. That's what a business is. So I really like the idea of a self-running business and a self-growing business. And so I built all this no-code stuff, all these Notion tools, all these procedures and SOPs, these playbooks. SOP stands for standard operating procedures, by the way. I use that term a lot so that we could continue to grow corporately without me losing my mind. Because when you grow like we did, if you don't have this kind of stuff, you lose your mind. But what we saw after about 18 months was that our business model doesn't do well with a super big geographic coverage area. It just gets harder. And it doesn't mean that there's not a wonderful market in Northern California or Austin or Cleveland, right? It's just that if you're trying to run that from a plane flight away, you have a layer of management you need to insert, you have a layer of risk you need to add, whereas when you're kind of in its— in your backyard, the risk profile, the financial health looks completely different. So we kind of abandoned corporate expansion because it was just— it was too difficult. Like, you could do it, but it's difficult. The classic answer is franchising, but we were kind of turned off by the franchising model for really two big reasons. The first was the industry itself is not super— it's not one that I really want to be a part of. It's just got some attributes that I'm not, not a fan of. So that's the first part. The second part was that in home improvement and property management shares this, people want to work with a local company and a local brand. And so much of what franchises offer is national marketing, national brand recognition, national campaigns. And for something like Dunkin' Donuts, that makes sense. Something like H&R Block, that makes sense. But for home improvement, people want to work with San Diego Garage Upgrades, not Garage XL Florida headquartered in California. And so by abandoning this idea of a common national brand, it allows us to, A, legally and compliantly not have to be a franchise, which has got all sorts of rules and restrictions. So a lack of co-branding, and second, lets us provide lots and lots of support, but without some of the kind of structures that you need within a franchise system. So that's what we've done. And we're in, you know, from when we launched it to now, we're in like, I think, 8 or 9 states. We've probably got another 10 in the pipeline right now. I mean, It's just a really cool way to grow that's kind of of mutual benefit.

I love it. And so as you and I have been discussing this over the past few months, it started to become interesting to me. You know, I just sort of was naturally thinking, you know, what would this look like for property management? Is there, is there a parallel to what we're doing? Because, you know, with RL Property Management, my management company here in Columbus, I was thinking about what's next for the business. Do we expand geographically? Do we try and acquire a company in Cincinnati or Cleveland? Because there's only so big you can get in a specific city, let's say. Now, we're not there yet. We've got years of runway to continue growing within Columbus, but I'm still, I'm the visionary, right? So I'm looking ahead. I'm looking 3 to 5 years, where are we going? And so as you and I talked about this, it really started to become clear that there might be something here in terms of, can we make the playbook that I've developed for growing a company from 0 to 700 units, can we make that available to other folks in a way that doesn't break the bank for them, makes financial sense for us, lets them shortcut years and years of effort and dead ends and wrong turns that we've made, and just really gets the incentives aligned correctly. So I know you've got some questions for me about my journey and sort of how that's all gone. Where do you want to take it from here?

I think maybe the next thing that we should just briefly discuss is kind of like this kind of support model, like what is it actually? And then we can get into some of the specifics about your journey. So, you know, I think when you look at anybody who started a business knows it's extremely lonely and it's a big blank piece of paper, right? Anybody who's bought a business, which I've done and I know Peter has, something like 30 days of turnover with the previous owner is like, you know, peeing in the wind. I mean, there is so much coming at you so fast, whether you buy a company or start one, and you're making decisions with no map. With your, your, your flying blind, right? And so when we really, you know, I read something that said, you know, you always start with like the customer experience first. And so I really, when I was working on this for garages and now property management, some of the other things we're doing, it was really if I was on the other end of this, what kind of support would I want? Like, what experience would I want? What would I want help with? What would I not want help with? What What is too much? What is too little? Those kinds of things. And so what we landed on was kind of 3 parts of value that are applicable to anybody going on to this journey. So the first is what I call, or what we've been referring to as the Encyclopedia of Property Management or the Encyclopedia of Laundromats or insert industry here. And what that is, is it's digital, right? It's largely based on Peter's notion, but it's not limited to Peter's notion. And it is essentially a wall full of books so that for the next 5 years of your property management company, when you have a question, you grab a book off the shelf, you open it up and you go, ah, that's my pet policy. That doesn't mean that you have to make that your pet policy, but you're not starting with a blank sheet of paper. You're grabbing a sheet that says, ah, that is my eviction process. Here are some best practices. Ah, always take pictures. Great. And so you can really take a lot of the guesswork out of that with that kind of encyclopedia of knowledge that is not from some internet guru, but from a guy who started from zero and now has 700 units. That's the first part. Should I keep going?

Yeah, this is great.

Okay.

So just to frame this, this is the model that you've been using for garage upgrade business. So folks who want to start or buy a garage upgrade business, they love the opportunity, they love the space. Instead of starting with a blank piece of paper, they start with your playbook and you're describing what's involved with that. Like, what do they get for that? And essentially we're looking at, hey, what would this look like for property management? So if someone wanted to start a property management business or buy a property management business, what could, what could I do? What could we do to make that as easy and quick as possible for them, utilizing what I figured out the hard way over 10 years and The reason that this is so exciting to me, and I know you've got two other things on this kind of three things that we provide, but the reason this is so exciting to me is because I just, I realized that something had changed in the last few years. You know, when I show up to work every day, rightly or wrongly, I'm no longer excited about driving success for our clients. And it feels horrible to say that,. But if I'm being true to my core, to who I am, I just don't wake up in the morning excited to help some 26-year-old buy a duplex and manage it for him. Now, the team is still fully on board with that, and I love figuring out the processes and systems to make that happen, and we have done so. But what really does get me excited in the morning, and maybe you've noticed, is helping other people with property management. Helping them overcome the problems that we figured out, giving them solutions, whether that's automations or Notion pages or anything I can do, vendor lists, tech stack lists, all the stuff I've been sharing on Twitter and in my newsletter. Seeing other people thrive and grow with their property management businesses literally wakes me up in the middle of the night thinking about how can I capture what we figured out? No, I don't have all the answers, but We figured out a few things. How can I, you know, contribute to the industry? So that's why I'm so excited about this and why I think, you know, there's a part of me that, that feels sort of guilty in a way, like, well, shouldn't it still all be about the customer? Like, what about our clients? And I think the answer here for me is putting the right people in place who do wake up in the middle of the night figuring out how we can make our clients successful. Someone has to be that, and it doesn't necessarily need to be the business owner forever.

So there's an old quote from some philosopher that I really liked. It's like, spend the first part of your life studying, the middle part of your life doing, and the last part of your life teaching. And it doesn't necessarily have to be your whole life. It could be like your business life in property management, which is you're a student, you were a doer, and now you're a teacher. And what gets you— what I'm hearing you say is what gets you excited is in your property management lifetime, air quotes, you're ready to enter the teach phase. Yeah.

And it's been a decade, to be fair. Yeah, we started almost 10 years ago.

Yeah, exactly. So yeah. So coming up with what exactly that means. Okay. What does that mean, practically speaking? So encyclopedia of knowledge, easy one. Second one is things that Peter can do really easy that are really hard for other people in the form of shared services. So something like Making sure your phone is answered in the middle of the night is something Peter figured out 8 years ago, whereas if you were starting from zero, would be really tricky. It's just, and it's going to cause all sorts of issues, whereas for Peter, it's like, oh yeah, no problem. I'll just add another number. Or it's really easy stuff. Important part of that for us as we thought through how we could really build value is it's all contract-based. So you can't get Quiznode. So if you ever read what happened with Quiznode, as a franchise, which is kind of the opposite of what we're trying to do here. They force their franchisees to buy their bread from particular vendors. Private equity bought one of those vendors. The food quality went to crap, and there was nothing that the Quiznos franchisees could do. And so we didn't want to do that. We don't like that.

This happened to one of my friends, by the way. He bought a Quiznos franchise right before this kind of scandal broke, and it crushed him. He went under. It was his first and only foray into owning a small business. And because he bought this super expensive franchise who then crushed the franchisees by forcing them to buy from their suppliers, he never— that, it was it. He got out, he went and took an engineering job, which is how we met. And he's never been back to small business.

Sad. Yep. So, so there's, there's a lot of hair on that. There's a lot of hair on that deal. That doesn't make sense. And then the last one, of course, is this kind of expert-led community because you're not, you know, something like Peter and I both do consulting for a stupid amount of money per hour. But the fact is, is that a lot of this support needs to happen over time. It's not just a 1-hour call and then say, see ya, and you got to pay $1,000 every time. So in 4 months, when one of my Garage Upgrade folks or one of Peter's PM folks has a challenge, like, I'm really struggling with X problem, what you get from the expert-led community is an answer that is colored by experience that could save you 10 grand. Hey, I had this issue with this kind of employee. What do you guys do? And we can say, this is what we did, this is why we did it, and then make your own decision. But you have a guide who can point out where the alligators are. So I'll give you an example. I had an affiliate who was going to mess around with overtime laws. Hey, can I just pay— can I pay this guy part-time and not make him a W-2? And I said, there are two things in California you never want to mess with. One of them is labor compliance. And I saved his freaking ass with about three sentences of input saying, brother, I love what you're trying to do here. Do not mess with overtime stuff. Pay them W-2 or limit his hours. But that's an example of kind of how something that somebody who's been there and done that could really help.

Yeah. And you and I could list off 100 of those little gotchas that, you know, hey, it used to be the apprenticeship model, right? If you were going to come up in an industry, you were going to be a blacksmith or whatever, you would apprentice under an expert for 7 years or something. And you would pick up all those little nuances, but in today's world, that's no longer a thing. And I feel like there's so much, there's so much that gets lost between the generations of practitioners, whether that's you go work at a big property management company, like you're not privy to all those meetings. You're not hearing and learning from the folks who really know it. And even when you buy a business, like you were saying, okay, you get 2 weeks with the seller. Like, And you're so frantic during that time anyway, you don't have time to get into the deep nitty-gritty details, you know, and extract all those hard-won lessons.

My, my 2 weeks were spent trying to get QuickBooks to release money because we changed the accounts and they had like $100,000 frozen. And that was what I spent my 2 weeks transition stressing out about, to your point that those, that those transitions are frantic. Yeah.

So.

So that's the kind of general form of the support. And I really like your analogy, Peter, of the apprenticeship model, which is— I have a quote, you know, I've got this big sheet of quotes, and one of them was like, how do you learn to make world-class samurai swords? Study under a great master. It's not complicated. And so finding ways to kind of align incentives, to kind of have ongoing access to an expert in a way that is kind of not $1,000 an hour or not some course or something like that. Was really what this is kind of centered around, you know, talking about that kind of apprenticeship model. I think I'm always fascinated, and the reason why I'm so excited about kind of working with Peter and continuing to kind of capture this knowledge that's sitting in these really experienced operators' brain is that I get to learn about the businesses myself in really simple kind of ways. And so I thought a really fun thing to do would be to ask some questions that maybe Peter has answered in bits and pieces, but that I think are just illustrative of all of the information that's sitting in Peter's brain that doesn't necessarily find a home in a blog post or a tweet. And so with that, Peter, I'm just going to fire a couple of questions at you. You can answer them short, you can answer them long. In property management— oh, and the idea of these questions, right, is to just kind of tap sets of knowledge that maybe you don't always talk about. So one would be, when starting or buying, and your answers might be different, a property management company, what is something that most people think is important that your experience suggests they could skip entirely?

My answer here may surprise some people, but I'm going to say figuring out the accounting. So property management is extremely accounting-centric, and some folks have heard me talk about this, but Really at its core, you're basically running like a miniature accounting firm for every single property you manage. You, you have to reconcile and close the books every month for every single property that you manage and report those financials to the property owner. So when I started out, I really wanted to get that right because I'm an engineer and I'm detail-oriented. So I wanted the numbers to be exactly correct, which was the right instinct in property management. So I was literally reading books about accounting. Like, I have vivid memories of flipping through Accounting for Dummies and a few other books so that I could get all this accounting right and get the reporting right and get the 1099s correct at the end of the year. Because this is, you know, this is big money for the property owners. For most of them, it's their largest asset. It's got to be right. So I ended up spending, I mean, hundreds and hundreds of hours learning, trying, making mistakes, fixing mistakes. And if I was starting all over, I would just completely cut that out and I would bring in an expert. And the nice thing about accounting experts is they can be found worldwide and they're very, very available in a fractional basis. So no surprise, one of the things we're going to be offering is fractional accounting help for property managers as part of our shared services. But even if you never sign up with me and you Forget it. There's a bunch of these folks who can do this. And I would say learn a couple of the basics and then bring in one of these groups who specializes in property management accounting, specifically trust accounting, and let them do your books. And now you've just cut out 10 hours a week that you can focus on doing other things.

So yeah, Peter, it's an interesting, and I, you know, I'm like an amateur econ guy. Like I love talking about economics and stuff like that. And so it seems to me like what that accounting is, is it's really about opportunity cost, which is with those 10 hours that you buy back for whatever it is per month, $1,000, or, you know, whatever the number is, that is time that you say if you're a real estate agent, you can use to go get more units under management or to go, etc., etc., right? Because it's not that you couldn't do your own trust accounting, it's that It's what are you not doing because you're doing that, right? Yeah. So it's an opportunity cost thing. It seems like what's something that you're doing every day now that you wish you would have started earlier in your journey?

Yeah. So this is a big one. And the answer is looking at email before lunchtime.

Wait, you know, not looking. No, no, not looking at it.

Yeah, exactly. So Email is addictive. There's a dopamine, this has been proven in scientific studies, there's a dopamine hit every time you get a new email. And correspondence, which is what email is, is important in a business. Some people say, oh, emails, never do email, or only check it once a week. Or it's like, no, I mean, correspondence is important, right? Even before email, we were corresponding. In a business, uh, you know, in a business relationship, whether within the company or externally. The problem is there's more to business than correspondence. So sitting in your email inbox all day is a great way to waste a lot of time on low-value activities that feel extremely productive for some people, while the big stuff that you really need to be working on and moving the lever on is Languishing. So I've tried a bunch of different solutions here over time. I tried inbox pause. I tried an out-of-office message that was always left on. I tried only looking at my email for 10 minutes in the morning, 10 minutes at lunch, 10 minutes. You know, there's a bunch of different philosophies here. What, what ended up working for me is I just don't open my email inbox till after lunch. It's really that simple. And in the morning when I'm fresh, I focus on everything that's not in my email inbox, which it turns out is usually the most important stuff. So that's something that I, I sort of wonder, like if I had been doing that from day one, where would I be? I think I'd be a lot further ahead because there was many hours a week spent in my email inbox kind of goofing around on trivial stuff for all these years that, you know, there's a compounding effect there.

So it's a, we could do a whole podcast just on this topic cuz I'm like, did you know I have a couple things I'll mention. Do you know David Allen, the Getting Things Done guy?

Yep.

I've lived off David Allen. I, I want to write like a clickbait Twitter post about it, but I can't even convey to people how naturally unorganized I am, but how much David Allen's system that I've been doing for almost 15 years now fundamentally transformed my life. And that is batch processing and inboxes and don't use your email as an inbox. Open loops, capture.

I mean, totally.

Like, I'm an obsessive on David Allen. The other one that you just made me think of, of course, too, is Cal Newport stuff.

Yeah.

Which I also am a huge fan of.

Yeah.

Which is, you know, you're totally right. Which is there's this false comfort in small, nitnoidy open loops that come from Slack or text or Twitter or email. And it prevents you from doing the important work that is often required to take your company to the next level rather than just the busy but unimportant work, you know? Exactly. And so I think that's such a cool, you know, that probably transcends property management.

Yeah, I think it does. Yeah.

Yeah, that's, that's, that's, you know, I should probably take that advice. Okay. What channels have led to you building your highest quality relationships? In, and I, you know, Twitter's your non-PM answer, but what about like within PM itself?

Oh, let's see. Within property management, I think I've learned the most through podcasts, listening to a few specific property management podcasts, and I have a list of those on my website, on my blog. In terms of relationships, my highest quality relationships have come from meeting people at conferences. And then making an effort to maintain and deepen those relationships. It's literally as simple as, hey, I had a great time getting to know you. What do you think if we just catch up every other month for an hour on the phone and just talk shop? It's literally that. So there's been 3 or 4 people I've done that with and there's seasons, right? So I'm not doing that to this day with all the people I've ever met at conferences because you do it for a year and you're like, hey, I kind of got a lot going on. Why don't you say we pause these for a little bit, right? But that's been huge. And like, there's something different about corresponding with a peer in the industry and really getting one-on-one on the phone or a Zoom call that you just don't get at a conference or through a book or a blog or anything like that. Because you're, as you get to know someone, you end up being comfortable enough to ask the dumb questions. And I can't overstate the importance of asking those dumb questions because they're usually not dumb. And if you're wondering about it, there's usually other people who are wondering about it too. So I think a lot of my best breakthroughs have actually come from asking those dumb questions and then sort of documenting and going to first principles and being like, but why? Like, why do we need separate accounts for all the properties? And it turns out you actually don't need separate trust accounts for all the properties. But if I had never asked those questions, I would've never like gotten to the bottom of, okay, well, here's the code. For the state of Ohio, and there's nothing in there about that.

Anyway. So I think probably after every answer you give, I'm going to give some random book that I read that has that principle in it. So you just gave me two, right? The first was, I read once that the key to building a great network is go to interesting places, meet interesting people, and stay in touch. And that's basically what you just said. And I've always had that in my brain, which is good. Go to interesting places, meet interesting people, stay in touch. And the second was, did you read Surely You're Joking, Mr. Feynman?

I did read that.

He's a big— I learned that from him, which is he's like sitting in a room with like Albert Einstein and he's like, what does that letter stand for? And just like completely idiot mode. And then they're just like, oh well, and then they have to explain it and it layers thinking. And he had never— he was the one who really energized me around like being, yeah, I know everybody uses multiple trust accounts, but Why? Show me exactly where it says that we have to do that.

And let me give you a secret. Most people don't know the answers. And so when you ask someone what feels like a dumb question and they give you kind of a fluffy answer and you try to dig a little bit and they just get evasive or they don't know, keep digging, go talk to someone else, go read, go keep searching. Cuz that's kind of where the magic is, has been my experience.

Yeah. And I, I've seen that in businesses that I've bought or started, which is that like hunger for first principles opens up opportunity. So why do we, why do we send the invoice only after the job's complete? We've already done a lot of— why don't I was like, oh yeah, that's a great idea. And you just like fixed cash flow.

Yeah. And here's the secret to building an audience. Every time you figure out one of those, write it down. Just in the most plain English possible, almost like a note for yourself as to what you found and why, and just share it, put it on a blog. And if nothing else, you'll have a reference that you can refer back to for yourself. Like, now what did I figure about trust accounts that one day? Okay. Yeah. Here's what I wrote about it. Right. And what you'll find is if you share that with your networks within the industry, you know, under discussion, people love it. They're like, oh my gosh, this is great. Right. And now the guy coming up behind you, first of all, gets the answer, and second of all, views you as an expert, and that can lead to other things.

That's such a good— that's such a good tip. And that's actually— somebody told me that, which was, that's how to, you know, build an audience on Twitter or newsletter or whatever, which was just like notes to myself. I was like, hey, I figured out a really good way to hire people. Hey, I figured out— and I write for myself. And that's— that's— you're right, that's— that's a great, great powerful tactic.

The other way I think about this is text, like stuff that I would text my business partner is like what I share on Twitter.

Oh, that's a cool one. I haven't heard that one. That's a really good one. That's a really good one. Okay. What's something radically different that you did than your property management peers 5, 10 years ago that led to pushback from them or disagreement from them, but ultimately you were right, you were vindicated? Yeah.

I got started in property management at kind of a weird time. It was 2013. So in 2013, there were already a good number of technological advances that had been introduced to the industry, such as online rent payments, online tenant portals, online owner portals. There was a number of fairly sophisticated vendors that had popped up to support the industry with certain functions. And I kind of went all in on that stuff, the technology. The vendors, the integrations, and of course being coming directly from the engineering world because I came right out of a full-time engineering profession, control systems engineering, into property management.

That's why you and I get along, man. Yeah, because I love— because we can go deep down those rabbit holes.

So I was all about systems and process from day one, and all of that stuff now is like taken for granted. There's tons of discussion with the industry about system and process, tons of discussion in the industry about using the best vendors and integrating all, all the data and everything. But I was on that early and I, I remember I was kind of stumbling around because no one else was really talking about it. This is another one of those things that was like, I was asking the dumb questions like, why don't we just make all of our tenants pay rent online? Why are we like, 'cause I would sit at our old office, my office was upstairs directly above reception. And every day, 2 or 3 tenants would come in to pay rent and they would chit-chat with our front desk admin lady for like 15 minutes. And it used to drive me nuts because I'm like, listen, I'm paying her hourly. And by the way, if you have like a front desk admin person, it's about $1 a minute all-in cost for a business owner. That's like payroll, salary, taxes, overhead, blah, blah, blah, blah, blah. So I'm like, you know, the little things going cling, cling, cling, cling in my head every minute that goes by that's being wasted talking to this tenant about what they had for breakfast. So I was like, why can't we just make all these tenants pay online? And they're gonna save the trip to the office and we're gonna save the time and the accounting will be right the second they make the payment. Like it's just better for everyone. So we, that's an example of something we early on were like, no, we don't do in-person rent payments anymore. It's online only. And we provided a bunch of different options and ended up fine. And now a lot of people do that.

So it's, it's funny, you know, you just made me think of something that I haven't told anybody or written about, but it was so true, which is. To build a different type of company, you have to play from a separate sheet of music. And I can't tell you, I remember, and it burned in my brain, I had a crew manager. I gave him the assignment of writing a process for one of our crews, like how to unload the truck. And I remember him saying, don't you think this is a little bit overkill? We only have 2 crews. And the next week we needed like 10 crews. And he was like, but how are they going to know what to do? And I was like, never again will I ever do anything other than play by my own sheet of music because I was trying to build— he's like, no, no, you can just stop by every install. And I'm like, that's not the kind of company I'm building. That's not— every PM guy says, no, you just go drive around and you collect your rent checks. And it's like, oh yeah, Peter took 6 weeks off without his phone ringing, or 5 weeks off. But that's only because you were just playing from a completely different sheet of music. And those guys look at what you do and go, I could never do that. It's like, because you didn't march by your own set of music, because you had one customer say, can I pay with a paper check? And you said, okay. And now you have to sit in the office. I think you and I have had, because we've both done kind of weird different paths, experience needing to kind of march by our own drummer. And I think that that's an example. Okay, cool. Two more. What's the biggest struggle that you're facing right now? And how would you be thinking about it if you were starting from zero? And if they even should be thinking about it at that point?

The biggest struggle that we're facing right now is every time we add 100 or 200 doors, A lot of stuff breaks because of the way we're set up, which is departmental. So we have specialized functions. We have a leasing department, all they do is leasing. We have an accounting person, all they do is accounting. So instead of like, sometimes people are like, well, how many property managers do you have? And I'm like, well, zero. We don't have a job title of property manager. We have specific functions. We kind of took the function of everything a property manager does and splintered it. That works great. And I have a whole blog post on like the different ways you can structure a property management company and the pros and cons. But the short story is, in a departmental structure, as you grow, what used to be able to be accomplished with one leasing person, now you need like 1.2 leasing people. It's like too much for one person, but not enough for two. So how do you take tasks off that one person so they don't quit because you're Burning them out. But like, where do those tasks go until you have enough for 2 full-time leasing people? So there's 100 examples like that as you grew, as we've gone from 0 to 700 units and from 0 to 24 employees of how we're moving around tasks. And so that's a big challenge. And I think that's just the nature of the beast. It's kind of like pick your poison. If we did it a different way, we would have different problems. But that's one of the challenges of growth.

So you're at— you said, I think I just saw, you're at around 700 units, right?

Mm-hmm.

Just crossed it.

Congrats.

It's very cool. And it seems to me, because I've had this with the people that I've been kind of working with, and I expect it'll be the same, which is there's definitely like phases that of a company's growth where it's like, okay, less than 100 units, you need no full-time maintenance folks. But as soon as you hit 100, That's where the break-even swaps or, you know, and I feel like that's something where you can add a lot of value over time. It's not like a document you send at once or a blog post. It's more like, all right, given the volume of requests you're getting, I'm really feeling like you need to go from having one leasing person to a lease-up person and a renewal person, or however you kind of, you know, fractionalize those roles. Right. Is that fair to say?

That's exactly right. Yeah. Yeah. And there's a lot of like nuance here. You know, again, we've made mistakes, right? We hired too early, we hired too late, we hired the wrong people.

Yeah.

Yeah.

And again, not just talking about the, the features, what that means is wasted time and wasted money. When you make a mistake in business, it's wasted time and wasted money. Oh, couldn't pay myself this month. Hired somebody, you know, Like that, that's, that's really kind of— it flows, it all flows to the bottom line, even time or money. And I've certainly wasted my fair share of both. Okay, last kind of just kind of experience question. What's something that you didn't pay enough attention to or ignored early on, and then you had to learn the hard way?

I think I would probably say the hiring process here early on, you know, when you first start to hire people, you, you think back. So what I did was I thought back to my experiences being hired as an employee. What did that look like? What was the interview process? All that stuff. And it turns out that hiring is a bit of a dark art and a bunch of people have different ideas about what works and what doesn't work. And if you use the wrong process or no process to hire, You're gonna end up bringing on board B and C players who start to, they actually start to do two different really bad things. One is they start to sort of rot the organization from the inside out because it lowers the bar for everybody else who's there. And they're like, oh, well this guy's kind of showing up late and leaving early. I guess that's what we do here. The other thing that happens is it starts to instill doubt within you. So as the owner and the founder, you start to think, Well, maybe this is just how employees are, or maybe I'm just not a good manager, or maybe I'm not paying them enough and that's why they're acting this way. You start to have, you start to get into this really bad cycle of losing your confidence and you're going round and round and round about dealing with this employee. And I heard a great quote, which is like, when you leave the office, the bad employees come with you. Like you end up thinking about them outside of work way too much. And that never happens with good employees. You're just like, you never think about them outside of work because you know they're good. Yeah. So getting in place a great hiring process, especially man, those first few hires, they really set the tone in the culture. There's some amazing tools out there now that can drastically reduce your chances of getting a bad hire. The one book I would recommend here is called Who, fantastic book by Jeff Smart. I think he's the son of the guy who wrote Topgrading. It's based on a lot of the same philosophies. It's not a panacea. Nothing is a panacea, right? Everyone, you know, you talk to people, they think they've got the answer. Oh, you gotta use Culture Index. You gotta use this, you gotta do that. And it's like all those pieces and parts are valuable and they're all a part of a comprehensive hiring process. And even when you get the whole thing together, that's still not a guarantee of success. But getting this right early on and, and giving it the seriousness to which it's really owed, I think It was a game changer.

Super interesting, man. I mean, every one of those questions we could talk about for an hour, no doubt in my mind. And that's, I think, why I'm excited about coming up with the structure that we've been doing that you're going to start doing within your community, because it allows you to— your area under the curve. It's not just like, how can I explain all this in an hour of consulting? How can I get all of this into a blog post? It's like, there's a lot here. There's a lot here. And you need to hear different things at different kinds of phases of growth. So I think that that's something that you and I, I know, are both thirsty for, not just a 1-hour hit, a multi-year relationship that's mutually aligned, you know.

Okay, so for folks who are intrigued by this concept, I want to talk a little bit about sort of where they can go to learn more and what my plans are for the future. I think there's a couple things to understand here. One is we've got pathways for folks who are starting a new property management company from scratch, folks who are acquiring a property management business and want to implement the playbook, or for folks who already have a property management business and want to convert or do a conversion to the playbook that, you know, we've kind of been touching on. So Those, those are 3 routes that are available, and I'm kind of sharing this here with the, my podcast listeners early because what I've just been describing is going to be launching to a broader audience in the very near future, and we're limiting the, the sort of first cohort to 10 people total. So 10 folks who want to Join the group, implement the playbook, grow and scale with me. We want to give sort of a, that first class, so to speak, direct access to me, which isn't going to always be the case. And we want to limit it to 10 so that we don't get overwhelmed and sort of overpromise and underdeliver. Does that sound about right, John? I mean, you've had experience doing this with the Garage Upgrade business.

My experience in supporting this kind of first class, this first group has been It's really fun because it brings me back to like the early days and like what I've told these guys before is I will talk to you every morning if you take my advice because this is so much fun for me. What I won't do is talk to you every morning if you don't take my advice and then you ask me to solve your problem. But I just mean the idea of being able to show people this world that I love as their kind of like tour guide. Personally is incredibly energizing. It's, it's, it's so much fun. So yeah, this first group kind of having a personal relationship is really fun for both people.

I'm really excited. I've been doing a little bit of consulting here recently and I was working— I'm working with a group that is taking my advice, right? So every other week when we get on a call, hearing their progress of what they've done next and they've implemented and they're on to the next problem. It's super energizing. And that experience actually is what got me super hyped about this because that model isn't really scalable, like the one-off consulting, and it ends up being super expensive in the long run for them. And it's inefficient for me, but taking like 10 of those, giving them our whole playbook instead of just a few words of advice, getting them all in a Slack channel with me and all the other value that we're going to be providing. Oh man, I'm so hyped. So If you're hearing this and you're like jumping up and down, this like, this makes sense to you, you get it, you're excited. I want to tell you to go to PMBusinessInABox.com. So P, the letter P, the letter M, BusinessInABox.com. You can fill out the application there to join that first cohort and be a part of this. If you're like, this is weird and I'm not into it, no harm, no foul. I'm going to continue putting out high-quality content as I've been doing because I don't know that anything could stop me at this point. So the blog post, the newsletter, the podcast, I've got exciting plans for season 3 early next year. All that is still going to be free and available to everybody. So anything else we want to say about this, John?

No, I'm just really excited and it's been so much fun learning about PM and I'm like, you know, I might launch one of these on the side under your tutelage just because it's, it's fun, man. It's fun learning from people. Who know what they're doing. That's what I'd say. It's fun learning from experts.

Yeah. Love it. Well, thanks for coming on today, John, and talking through this with me. This is going to be fun and appreciate everyone for listening. Thank you for listening to Owner Occupied. I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.