Challenging PM Industry Norms with Mark Brower

So how clear are we, Peter, as property managers— as wrong word, right? Business managers. How clear are we as business managers about this, the support we require from our owners? You wouldn't spend 20 years mastering how to run a KFC franchise, have an investor that owns 15 KFC franchises employ you as their business manager. Would you tolerate them looking over your shoulder and criticizing what you're doing and expect perfection? Are you kidding me? There's just as much and as many variables as running that type of business as the business we're running. Why would we tolerate that kind of behavior? And, and we can't not tolerate it until we're really clear about what we expect from people.

Welcome to season 4 of Peter Lohmann's podcast. This podcast is a show about all things residential property management, from property operations to sales and marketing to growing and managing your team. I'm your host, Peter Lohmann, co-founder of RL Property Management. For season 4, I have an exciting new guest each week. We go deep into conversation about problems facing professional property managers and the best ways to overcome them. Thanks for listening. Now let's go. Welcome back, everybody, to Peter Lohmann's podcast. Today I have Mark Brower in the virtual studio with me. Welcome to the show, Mark.

Thank you, Peter. Glad to be here.

So excited to have you here, Mark. You and I have bumped into each other at a few conferences and almost immediately plunged into some fun debates/discussions about a wide variety of topics. And I know we've had one or two of those topics kind of queued up to discuss when we next got the chance and kept kind of getting rescheduled. But here we are. We're going to get into some of these topics. Before we do, though, I'd love to have you take just 1 to 3 minutes, give a little bit of a background on yourself, who you are and what you're up to today.

So probably what matters most to the audience is I own and run a property management company in Mesa, Arizona, right around 620 units. We've plateaued there for like 8 months. So that's a little aggravating. I want to— we want to keep growing. Wife and kids, married 23 years and 2 boys, 2 girls. And when I turned 40, I had a little midlife crisis and decided I need to do something with my physicality before I got too old. So I started running and logged a 12,000-mile run in 6 years and did a number of ultra marathons. So that's been my passion for the last few years. And also last year we launched a maintenance company, a sister company to our property management company. So that's kept me busy.

Awesome. That sounds like a lot of fun stuff you've been involved with, and I'm sure we're going to dive into at least the maintenance company. That's been a big topic here recently. So I think where I want to start is on the topic of customer service. I want to mention a few things first to sort of set the stage. You tweeted out recently that your service level agreement or SLA is 98% of calls answered within 12 seconds. Let me give the audience a second to sort of absorb that. 98% of calls answered within 12 seconds. And then you also mentioned recently that you had some negative events at your management company that you really took personally and you sort of dove right in when they happened. There were some bad reviews that came through and some things got escalated to you. And I know, I think if I remember right, you and I have a slightly different take on the value of customer service or how much emphasis should be getting placed on it by the business owner. Maybe to start, how do you think about customer service and why have you established this SLA of 98% of calls within 12 seconds?

There's a couple ideas and I hope I can keep them organized. Number one, there's this idea of trust and, uh, Stephen M. R. Covey, son of the late Stephen Covey, wrote a book called The Speed of Trust. And I just really love some of the ideas, some of the principles he reviews. But the primary principle is that when trust is high in relationships, the relationship pays a positive trust dividend. Okay. He cited one of the deals Warren Buffett did, like a massive $100 million, hundreds of million dollar deal, or maybe even billion dollar deal, an acquisition. And I can't remember the acquisition, but he said, Warren Buffett said they closed the deal in 2 weeks. He said, we did no due diligence. Everything was exactly as it was promised and we knew it would be.

Yeah. Warren Buffett famously says that price is his due diligence. Yeah.

Okay. So, but, but when you think about, you know, the lawyers and the months and the, and that, so when, when people trust each other, trade happens at a rapid, rapid pace and that happens internal to the organization. It also happens external. So So that's one idea. The other idea for me comes from the book, The Psychology of Money, where one of the main ideas in the book was that we shouldn't try to adopt an optimal investment strategy because most of us emotionally can't tolerate the optimal strategy. He even cited the guy, the father of modern portfolio theory, forgot the guy's name. You can look it up. He was asked by a reporter, do you follow your own theory? This is groundbreaking. This is incredible. Do you follow your own theory? He said, no. Because my theory requires that I be down 50% occasionally. And I know emotionally I won't be able to tolerate that. So the emotional component of a landlord staying in property management long enough, or staying as, you know, investing in real estate long enough to have a fighting chance to build wealth, because we know that to build wealth, the compounding effect of staying in an asset long enough is vital, right? So there's an emotional component to having the grit, the tolerance, the, the stick-to-itiveness to be able to, to be able to stick it out long enough to have a fighting chance to build wealth. So when high trust relationships pay a positive dividend, and I'm a beneficiary of that, just selfishly thinking, and if I can make it easy enough for my owners emotionally to stay in the asset long enough, then those two things help my business grow. And what's the one thing? If we've solved one problem, everything else would become either irrelevant or easier. What's the one thing with fostering high trust and lowering the owner's stress? I believe it's communication, 100%. And the most important part of communication, I believe, is the responsiveness with which we reply to communication. I can point out at least 90% of the issues that go off the rails for us that cause negative reviews can be tied back to communication. And specifically responsive communication. Now, part of it's the competence with which the reply came, but the responsiveness, it's knowing the emotional tolerance of the other person for their need for an update or their need for a fair, honest, open, you know, it doesn't mean we give everybody what they want all the time, but they get updates, they get a fair assessment, they get this transparency that fosters a higher trust environment. So those are some of the ideas around that.

Okay. So it sounds like you're positing that answering the phone quickly builds trust, or that's a huge part of trust communication specifically builds trust. And that if we can build that trust, our owners will stick around much, much, much longer, which benefits both us in the form of lower churn and them in the form of they can let their wealth build in real estate longer and actually achieve potentially financial freedom through real estate rather than incurring these massive transaction costs every few years.

100%. 100%. Okay. Also think of it like a balloon filling with toxic gas. So when someone is left in this vacuum of no information, no updates, or when we are left to our own devices, right? And something's not going right, we immediately start making up stories about what's really going on. And so this is like a balloon filling with toxic gas. So the speed at which we can let a little air out of that for the other person, right, and the frequency with which we let some of that toxic gas out keeps things tolerable so people aren't shifting to their amygdala so fast and going to war with us. People do not think and behave rationally. People behave out of an emotional response, and the stories they make up are whipping them into unnecessary frenzies that completely tank our time and resources later. When you're trying to wrestle an issue down to earth after it's already gone, you know, off the rails for 2 or 3 weeks, good luck. There's like a 5x, a 10x effort there. And then we might say, well, screw them, you know, they're dead to me and they're not rational, and I don't care if they write me a bad review because I'm going to game the system and get all my friends write good reviews. We're just, we're in a downward spiral at that point.

I think I agree with everything you just said. And what's also been true for me is that picture that toxic gas building up, and you said it takes like 5 or 10 times the effort to like address the issue if you let it, if you let it fester like that. The other thing that happens is like 6 months later they bring it up. They're like, yeah, and remember last time when it took you like 6 months to lease the unit? And, and I, and you're like, well, no, remember we talked about that? Like, actually, like, you didn't get the funding to us for like 5 months, even though we were emailing you every week. And then it really only took us 2 weeks to turn the unit in, 2 weeks to lease the unit. And they're like, no, no way, that can't be. And you're like, so like, it's even though you sort of like solved it in that moment and like they somewhat made their peace with it, their emotional memory of it is whatever the thing that they made up.

Was exactly at the emotional memory. Like, we can talk them off the ledge in the moment and somehow they rationalize, like, okay, they're right, I'm going to follow their lead, but it still lives inside them emotionally. You know, a really great example of amazing customer service from a large company, in my opinion, is RingCentral. So I have a rep at RingCentral. We use RingCentral for our call system. I have a rep at RingCentral, and it is uncanny how they've either built an algorithm or this guy's a genius, because when I have the simplest of questions. Like, 3 or 4 days later, he's texting me like, hey, I know you have this question. We think we resolved it on our phone call, but did it really? Like, settle? Like, like, is everything like cool, or did something else come up? And then if I don't respond, he's circling back 2 or 3 days later. Like, they keep their cases open, and they have such a good follow-up sequence that it almost ensures that the emotional climate completely dies down. I think the assumption that we resolve something live in the moment, and because we're rational, the other person should be rational, we should be able to move on, is far from the truth. We're dealing with people who have never been landlords, that have never been business owners before. And suddenly, because they're in a relationship with us, we expect them to automatically be effective business owners? Are you kidding me? How long has it taken me to get where I am as an effective business owner with my emotional intelligence and all the other tools I have? This is not the case. This is a difficult journey that they're on.

I think I agree with everything you just said again. And, but I think what I'll take issue with is with, with everything you just discussed over the past 5 minutes. I don't know that I'm up for this personally. Yeah.

Okay. That's an honest expression. Thank you for that. That's refreshing. Yeah.

I don't know that I'm up for. Turning every single one of our new customers into an investor with the right mindset. I don't know that I'm up for reorienting my whole company around answering the phone in 12 seconds. I don't know that I'm up for walking our customers off the ledge every time they have a plumbing invoice that they don't like and then calling them 3 days later to make sure they're still off the ledge.

And then 2 weeks after that.

And 2 weeks after that. Yeah. Like I want to do business with adults who are rational. And I think, you know, possibly that's going to limit— it sounds like I think we agree that that's going to limit our growth.

And there's nothing wrong with that. Nothing wrong with that. 100%. Like, 3 thoughts come to my mind. Number 1, do you have a reason that's compelling enough to be up for that? So like, that goes to purpose and vision. Our vision is to help good people do more good in the world. Well, how do we do that? When we make it easier and lower stress for people to build wealth in real estate, and they're good people at their core, what do good people do with wealth? They do more good with it. And so that's a reason that's inspiring enough to engage with something that's somewhat painful and can be very trying. And but, but also that we get to benefit, right? We get to go through this crucible experience and go through that fire of, of purification that we get to learn more patience. And so, but you get to decide, You get to decide what you want to do, right? And so we say if we qualify our owners well enough, you could have a business and say, look, you don't qualify to be my owner in my portfolio. You don't qualify to work with me unless you have business owner experience and I can validate it. Well, there you go. Now you've got a different class of owner.

Yeah, exactly. Okay. And I want to talk about, like you mentioned, when you were describing the negative events that had happened over the past week, that you took it really personally. And I can relate to that for sure. Used to be a time when all the Google reviews would land in my inbox and every medium or larger tenant or client issue would end up reaching my desk. And it really takes a toll as a business owner. And I did take it personally.

Oh yeah.

And I had to break away from that for myself again. You may have reached a different conclusion, but for me, I was just like, I can't keep taking this stuff personally. People are going to be mad. Some of it's our fault, some of it isn't. We're going to try and take lessons from the broader trends, but I'm not going to prostrate myself for every owner who's unhappy with the 10% markup that they signed on for when they signed our PMA. What do you think about, like, how are you relating to that stuff these days?

Yeah, there's definitely an emotional toll. I started reading a book last night called The Alter Ego Effect. Fascinating book, got 60 pages into it, so my thinking on this is really fresh. It talked about how effective, like, sports stars and entertainers, and they rename themselves too, like all these artists that give themselves new names, they actually take on a different persona and people think, well, that's fake, you know. But one of the highlighted benefits of so doing is that when people attack you personally, that they're not attacking you personally anymore. They're attacking your business persona.

Interesting.

So maybe I can lean into that. Yeah. I'm really excited about this book and devouring it, sharing it with my 19-year-old son, because sometimes I think we get caught up in, like, I have this really sensitive inner child, you know, Mark, that doesn't want to get hurt. And man, I'll tell you, my blood pressure, as soon as I see those 1-star reviews come through my inbox and they do come directly to me, you got to But like every, my entire world is hijacked, Peter, until, and it's my personal mission, one mission for that day or that 2 or 3 days that I thrill them so much that it converts into a 5-star. And, and part of that like strikes at the core of one of my core values, which is extreme ownership, or Matt Whitaker calls it own the outcome. Are we going to own the outcome 100%? Are we going to take extreme ownership where most people wouldn't? I had a business mentor one time. I spent 6 years in the Entrepreneur Organization Accelerator Group, and we'd meet monthly with an accountability group. We'd have a mentor that had a much more successful business than us. And one day he looks across the table at me and he's like, Mark, I found my life become more manageable when I decided to take 100% responsibility for everything in my life, not 99.5, not 99.9. Peter, When I get 1-star reviews, I put my cell number on the review for the entire internet to see. So for better or worse, I'm wrapped up in it. I'm 100% committed. And maybe that puts a chokehold on the size my business grows. But also when the world has my cell number and my cell phone is not ringing off the hook, I ignore all the spam, of course, but every client, every resident has my direct line. The goal is that we have a— Oh my goodness. So we have an escalation path, right? So, so why would I want 1-star reviews to be my escalation path? I have to own the fact that something's broken in my company if a 1-star review is the escalation path.

Okay, so I wanna push back on some of this. So first of all, your alter ego, I'm gonna call you Marky B for the rest of the podcast.

Marky, Marky was my nickname, uh, when I was a little kid. So no, no, that, that's the, that's the Clark Kent. Marky B gets safe. He's over here. Oh yeah. So the persona—

we need a totally different name.

Yes. That's—

yeah. And that's who's getting the 1-star reviews, not you.

Yes.

Yep. Okay. So yeah, so like, but owning the outcome for me means owning the outcome and like the outcome that you're driving after is a successful property management business, financial freedom for you and your family, a positive outcome for the community that you operate in. Like, to me, those are the outcomes that you're after. That's what I make up. I mean, any random specific tenant who was declined because of their credit score along the way, that's not the outcome. That's just some random pissed-off tenant. Why should that hijack your whole day in this way?

That was an outcome. That was something I touched. That was an outcome. Look, it's— there's a problem with putting a fence around what we're going to own. And the problem that creeps in and has no definition, has no defined boundary to it, and how far in does it creep into my organization, is that I don't have to own everything. There's stuff I get to say, that's BS, that person's irrational. You demonize the other person and then you don't have to take responsibility for it.

That's exactly what I do. It's great because they are irrational and they are also wrong. And like, I'm not gonna lose sleep over that.

Okay, so we don't want to lose the sleepover, so maybe we prop up an alter ego that can just rip those arrows out of their chest. But there's another side of that coin. It's like, I think most of us underestimate the great power of word-of-mouth advertising. My wife has this HVAC vendor. He's— he worked for Boeing for 30 years. He designed the AC systems for Apache helicopters. He moonlights as an AC guy. He only works for my wife cuz I don't know, she listens to his story, she makes him feel good, whatever. You know, he's one of those types. He's not doing it for the money and he's like at or below like the average cost, right? So the power of the word of mouth. So this guy's name is Heeman and Heeman has never spent a dollar of marketing advertising in his life. His phone is ringing off the hook because he's a genius at what he does. He's fair with his pricing. And he loves the really complex stuff. And so he, he likes Rheem AC units and he can tell you exactly why, because when there was a condensing coil leak, they, they plated it with this crap. Look, whatever they did, right? He says they're all terrible, but Rheem's the best. And by the way, Trane just has a huge marketing budget and any vendor that tries to throw free— my wife, who's a very vocal, like a promoter type personality, is telling everyone she knows that Rheem is the best AC unit. You know, it's like somehow Reem got advertising for doing the right thing and taking ownership of stuff that their competitors are not taking ownership of. And somehow they found a megaphone through my wife. Like, I think we minimize how often this kind of stuff happens.

I do think you're right about that. And I think Warren Buffett actually has a quote about like, the marketing is the work on your desk in front of you or something like that. Basically saying like, if you do a good job, like it'll, it'll, word will get around.

We're not doing a good enough job, or our phones would be ringing off that you and I would be at 1,500 units if we were doing a good enough job already, right? That there's a built-in marketing system out there that's free, that when we invest back into owning the outcome and we just really get obsessed about client experience. But, but to your point, maybe it's, maybe you're right. Maybe it's just like, hey, we're going to qualify our owners better and we're going to, instead of turning away 20% of leads, we're going to turn away 60% of leads. Okay, well, that's the business that you get to. And guess what? If that— if the remaining leads come in and they're super high value, then that works. I've thought for years that if I could just delineate which clients were highly likely to transact with me and say no to everybody else and only yes to them, we'd have half the properties or a third of the properties, but we'd be way more profitable, right?

Yeah. Okay. I get what you're saying. Yeah.

You don't have any argument for— I thought you were going to like debate me on this. You're going to tell you to shut me down. Come on.

Well, we are debating. Yeah. I've been pushing back. Yeah, I think so. The customer service angle as marketing or as owning the outcome as it relates to like every single negative review or putting your cell phone out there. Yeah, maybe it's just that I'm not up for it. I, it's, I think it's working and I do think it can work. The reason I sort of bounce off it though is partially just because the surface area we have to cover as property managers is so enormous from finance, you know, from dealing with our owners' finances to residents and everything that goes along with that, to maintaining physical structures, to handling insurance and all of those aspects. It's just such a massive area in which we have to do supposedly like a perfect job. It just feels overwhelming to me, if I'm really honest. It feels like it's impossible to give a 5-star service level to every vendor, every owner, every resident, every prospect. And still charge something that the market will pay. Basically, the, the way I experience property management is that the market wants more from property managers than they're willing to pay for.

I have a different view.

Okay, go ahead.

I think most property managers are not clear enough about their requirements for their business relationships, and they're not skilled enough to know how to have the conversations with the owners. Like, how clear are you about the level of support you require from your owner to do the job you wanna do with all of those variables in place? This is not an easy job. It's deceptively complex. It's not rocket science, but there's a mountain of small tasks that have to be perfectly orchestrated, right? There's all these expectations. Dan Sullivan wrote the book Who Not How.. And one of the things that he said in the book that really stuck with me, he talked about the difference between a transactional relationship and a transformative relationship. And he talked about one of his clients one time that was paying him a lot of money for consulting, but he wasn't doing his assignments. And eventually they cut the guy off and the guy's like, what the hell are you doing? I'm paying you a lot of money. I'm the guy here paying you. You're firing me. And he was incredulous. And Dan Sullivan's response was beautiful. He said, We have really high standards for our clients and you're not meeting those standards. And, you know, you say you're going to go tell everybody in the world how, you know, how terrible we are. But I mean, we can't control that. We couldn't control what you did when you were a client with us. So how clear are we, Peter, as property managers— as wrong word, right? Business managers. How clear are we as business managers about this, the support we require from our owners? You wouldn't spend 20 years mastering how to run a KFC franchise Have an investor that owns 15 KFC franchises employ you as their business manager. Would you tolerate them looking over your shoulder and criticizing what you're doing and expect perfection? Are you kidding me? There's just as much and as many variables as running that type of business as the business we're running. Why would we tolerate that kind of behavior? And we can't not tolerate it until we're really clear about what we expect from people?

I've never figured out how to succinctly explain it. And I feel like when I've tried, at least the way I do it, it comes across as defensive, whiny. You don't try and tell us what to do. We know better than you. Like, I'm not— I don't have the right words and the right tone. I'm also kind of burnt out on that. So I'm not the right guy to be doing that anymore. And I know our sales guy does a much better job. But like the other problem I run into is just there's so much to talk about. And every time in my company, every time there's an issue with an owner and like it comes back to, well, the owner didn't realize X, the owner didn't know Y, we never told them about Z. And you know, I'll give you an example. We don't always get our owners like approval for lease renewals. Like a lot of leases, they just We renew 'em at, at, at the price that we think is appropriate.

No, totally disagree with that practice.

Okay, well you just got done talking about how the owner is empowering us and we're the experts and they can't come in and, and micromanage us. Now that said, I think you can reasonably disagree about that example, but just using as an example, then we get an owner who is mad that we renewed their lease at a price that they didn't want, or maybe they whatever. So then, then it comes back to sales and the ops team goes to the sales team and says, hey, you gotta let these owners know before they sign up, we're gonna be renewing their leases without their knowledge. There you go. The sales team kind of diligently writes this down and, and then starts having these conversations. And then another week goes by and now all of a sudden it's evictions. Oh, well we filed an eviction without letting the owner know. Well, yeah, we always do that. That's how we've done it since time immemorial. There's evictions filed every month. That's part of a standard process of being a property manager. We don't let our owner know every time we file an eviction. Well, no one told the owner that. Oh, well, I guess we better tell them during the signup process. Add that to the list. And soon you have a list of 93 things that you need to talk to the owner about before they sign on. Well, did you know that if it's winter and there's an emergency, we're going to do this? And like, there's all these little edge cases.

Every contingency. No, that's impossible. Okay, so tell me about your owner handbook.

Yeah, we've got a nice, you know, 12-page owner handbook. We actually have it printed and bound and mail it to them hard copy so they all of those policies, the eviction, maintenance approval, and lease—

I mean, there's a— okay, we— it's easy sometimes, and forgive me for saying it, sometimes it's lazy for us just to, to just say, well, there's so much going on in property management, it's no way that we could manage every expectation on every— well, okay, but we could pick the 5 most important ones and have a really clear policy around them. Like, what are the themes popping up? What, what are the patterns we're seeing with people getting pissed off? Okay, then we should own the outcome and change the way we communicate about these. And I agree with you, there's no onboarding— it would be exhausting and completely ineffective to spend the hours it would take with every client going over every contingency during the onboarding. So what do we do? We write them down. My owner handbook is almost 30 pages long because every single time I hit my head against the wall with an owner with an unreasonable expectation, I put it in writing and then they don't read it. They don't read it. But it's, it's, but guess what? Now I have a springboard. I have it. I have the advantages in my corner because guess what happens when they have a missed expectation? The link to the owner handbook's in my management agreement. Okay. So it's like, you agree to this. Well, when something goes off the rails about like, hey, you didn't tell me X, then the conversation starts out with— and by the way, the property managers require ongoing training to how to skillfully handle these questions, right? And part of property management is sales. It just is influencing people, helping them see, you know, things differently. So it's like, oh, you know what? I'm sure you didn't read this when you signed on, but there's a reason we wrote it down in the owner handbook because some owners Remember how we said that we don't want to co-manage this property with you? Well, we understand for your emotional well-being that sometimes you want to be more, more involved than most of our owners. And that's okay. That's why we wrote down how we do things in our owner handbook so you don't get surprised. So I'll just refer you to this part and here's what it says. And here's— there's a fantastic book called Getting to Yes, one of the best books on negotiation I've ever read. It talks about when people take opposing positions, they're having a completely unproductive conversation. What needs to happen is you need to resonate with the why, the shared interest, right? The intent. And then talk about that and bring them around to the way you want to approach it. And that's what we need to do. All like, hey, you want to make sure that you get emailed every single day when you have an open work order. We understand the why behind that is that you want to make sure that your property is cared for, that your tenant is respected. There's no, you know, laws that we're violating. You want to know that we're competent. Also, we get all that. And they're like, yeah, yeah, yeah. That now we put them ourselves on the same side of the table. Right. And it's like, okay. But for us to be able to charge the fees that we do and offer the service to you and everybody else and to foster our good name, blah, blah, blah, and everything we need. And remember, you said that you would be really a supportive person. I know we covered that in our sales call. That was really important that you were going to be very highly supportive of us. Okay. So that's why we're going to ask you to let us approach this our way. And if they fight about that, then the conversation shifts to like, hey, are we in the right relationship? You know, because this is what we need. And forgive me, I'm going to own the outcome. I didn't, I didn't make it clear enough to you in advance that this is exactly the kind of relationship I was looking for. Shame on me. I thought I did, but apparently I didn't. So let's have that conversation now.

That's all the right stuff to do. That's exactly what needs to happen. And I think what comes up for me is, is like, that's just, it's just too hard.

Well, Peter, you don't have to do this. I mean, Dan sold—

well, no, but I, I guess what I'm getting at is like, I think you nailed it, but it took a Mark Brower, or maybe I'm just slow. It took a Mark Brower to figure all that out and articulate it and implement it. And like, you're now starting to reap the reward of that. But the average property manager's not gonna do that. I'm not even gonna do all that. It's just too much. And like, I don't know why I'm venting to you about this, but this business is fricking hard. It's freaking hard. It is hard.

It is hard. And like, so here's my percept— here's my perception of you, Peter. Here's my perception of you. You didn't come out of the womb with a cell phone in your hand selling stuff, right? Like, so you, you're not like, we have, I mean, I love more stuff that Dan Sullivan writes. We have unique abilities, right? And, and there's a who, there's a who that loves to do all the crap that you and I don't like to do. If it drains your— okay, when you say it's a lot, what I hear is it feels like a lot, because we all know, and you know this better than most, there are things that absolutely drain our energy. You write newsletters like nobody else. You do podcasts, you know, you speak, you You vulnerably and honestly, with total transparency, show the flaws in your business and how you're working through them. And people love that stuff, you know, and you're in the zone. You're probably getting the chills when you're writing these newsletters. Well, there's some people that like get the chills when they're talking somebody off the cliff over and over and over all day long, and they could just keep doing that. And it's like, all right, I need 3 of those people in my company that are obsessed about this.

Right? This episode is brought to you by Second Nature. Are you joining me at NARPM's annual property management conference this October? We're thinking about it. If so, I highly recommend signing up for Second Nature's VIP experience. Every year, Second Nature pulls out all the stops to support our industry, and this year is no different. They're offering a free airport shuttle, VIP check-in at the hotel, a ticket to their party on Tuesday night. Their parties are crazy, by the way. And a chance to win a grand prize trip to Los Cabos, Mexico. Honestly, this is really awesome. They do a great job treating you like a VIP for a few days every year. It's really, really nice. And if you're interested, just head over to secondnature.com and click register as a VIP. This is hands down the best conference in our industry. So this is the one you really want to be at. If you're interested in anything I just said, just go to secondnature.com. Narpam for free. Thanks again to Second Nature for sponsoring this episode. So I want to come back to the sort of underlying point that I was implying, which is that this is a really hard business and like sort of dot, dot, dot. I've got a few more thoughts that will trail after that sentence. But before we do, let's go back a little bit to Google reviews or reviews in general. I know you're big on Yelp. That's kind of a regional thing. Yelp's not super big in Ohio. You have a framework of beliefs around reviews, if I remember right or understand you right, that they are useful, can be useful. They are obviously important feedback tool for you for how you identify issues in your business as you just articulated. But I, if I remember right, you also sort of like, you're not a believer in gaming the system. Like you're not gonna pay for reviews to come down. You're not gonna, incentivize positive reviews by some artificial mechanism.

Is that right? Yeah. I've never paid anyone internal or external. I've never have asked anybody I know to write a review. I cringe when I hear people doing that. I don't know.

Yeah. Okay. So yeah, say like, what, what's, what's going on for you there? Like what, what makes these review systems in your mind something that's not to be tampered with in the same way that you wouldn't tamper with your owner's money in a trust account or something like that?

I don't know. I think this goes back to 15, 18 years ago. My brother and I got the same gift from our mother on Christmas, and we both unwrapped it and it was a book. And the title of the— it really pissed off my brother. The title of the book was Winners never cheat. And I was in my 20s and I didn't come from wealth. I didn't, I wasn't raised by like a real, you know, successful entrepreneur dad. Like I didn't have any uncle, like I did, I was raised with a middle class, maybe lower middle class mindset about money. My dad was a dentist. We lived comfortably, 7 kids in the family, but we didn't have the mindset of an upper middle class or rich wealthy person. So I didn't know how you were successful in the world. And I actually thought, and I think this was programmed into me at a young age, that in order to win, you had to play in the gray. You had to game the system. You had to do something that maybe wasn't illegal, but it wasn't always something you'd be comfortable published on the front page of the newspaper.

And it sounds like this was a very prescient gift then from your mom. Did you say it was your mom? Like, that's—

it was my mother because she saw that my brother was, forgive me, my brother, if you're watching this, my brother was using these straw buyers to buy real estate. And like, this was kind of like, maybe not, you know, I, I don't know.

Oh, I thought this was like when you were 6 years old.

Oh no, no, no, no. This was, it might've been early.

This was like 2 years ago.

No, no, this, no, this early 20s, early 20s.

Okay.

All right. All right. Okay.

And, and I thought you were gonna tell me your brother was like, like, like watering down the lemonade at the lemonade stand or something.

Oh, he's an attorney. Yeah. Yeah, he plays by a different rule book. So anyway, we got this book and I just like, it was around that time in my life when I said, you know, I want my life to matter in a way that makes me feel really good. I'm going to play not only just by the rules, but like well inside the boundary of the rules. And then I'm going to work so hard and be so dedicated and work so long that I'm going to be successful despite that, because people that cut corners can climb a lot faster in business. I think we see that sometimes. And so I'm gonna do it the right way, even if it takes longer. And I want the bad player thrown off the field. And I'm going to believe my, my theory, my hypothesis, even though I didn't surround myself with successful people, wealthy people at the time, or that I believe that it's possible to play, you know, totally by the rules. And so people are gonna watch this and be like, well, you know, what do you, you know, what are you talking about? It's, it's not by the rules if I pay my staff $50 for every 5-star review. And you know what, that, I think that argument has merit because if you want a bonus for impact, And, you know, and somebody willing to write a 5-star review is evidence of impact in their life. You know, there's maybe a valid argument there, but I, one time I read the Yelp terms of service and it said, you know, don't—

a sentence spoken by no one else who's ever been on this podcast. One time I read the Yelp terms of service and it intrigued me.

It intrigued me. I thought, here's a review source that has somehow created an algorithm that causes its review ranking to be more reliable than any other review source. My opinion. And you know, what's the belief system behind this? And one of their terms is like, hey, don't ask anybody for reviews. Don't incentivize reviews. And I thought, yeah, what if I didn't do it just 'cause Yelp wanted me to, but I just, I just thought, what if, you know, what if this was a barometer? What if I didn't gain this at all and I had to earn it? You know, like actually earn it so they were spontaneous. Like how hard would I need to work? Would that be, would that be a clear signal to me that I had a business that was worthwhile at that point? And so I think I just try to make my, my life harder, but it's an important metric to me.

I do think that's a very useful piece of signal, which you, which you just articulated is spontaneous online positive reviews, unrequested, unsolicited. So I can appreciate that as a valuable piece of data or piece of feedback for your company. You know that all of the good reviews are coming purely out of the joy of somebody's heart. And the more moments like that that you can cultivate and, and create, that can only mean great things for your business. Now, my take on this is different. My belief is that these reviews, Yelp, Google, BBB, are total, it's a total farce. It's a total game. And, and you even mentioned on another podcast that Yelp has suppressed a bunch of legitimate reviews.

Oh, that dozens.

Yeah. So like, that's messed up. And the other thing that Google does is there's a bunch of reviews on our profile from people that were never our customers. They're like drive-by reviews from people who didn't like that we manage a home in their neighborhood or didn't like our minimum criteria for credit score or something like that. And so we would dutifully, you know, report these or write to Google, say, hey, just so you know, like, this wasn't actually a customer. Can you please remove this? And they don't remove it. And at that point, I'm like, game on. Game on. If this is how it's going to go, I'll play the game.

I'll play the game.

Okay.

So, so I, forgive me for saying this. You decided you weren't going to own the outcome or you decided that it was all a game, right? Because I've had the same thing. I've had reviews that were one-star reviews. I'm like, who the hell is this person? Like, I can't find them anywhere. But I also believe that I don't have these enemies out there that just for no reason at all are going to use their time to try to harm me. You know, there's something that happened. It was difficult for them to view one of our properties. It was difficult for them to apply. The lockbox code didn't work. You know, something happened. So I don't know. But also, you know, if our service is so amazing and we're creating all this spontaneous joy all over the place, then those reviews get buried. And by the way, sorry, I'm going to make this point. We, I can't tell you how many times I have heard from prospective clients that the reason I'm calling you is because you respond to every negative review. And I love the response. I love the ownership. I love, they don't say extreme ownership, but what do people do? They see 4.5-star average rating and then they go to the 1-star reviews. I'm going to read all those. That's the most powerful marketing content that we have is what was our mindset when we replied to those reviews? Did it show extreme ownership? Did it show that we have transparency? Did it show a willingness to create value in people's lives and sorrow when we harmed them? Like, are we open to learning or are we the type that's going to put a fence around that and say, 20% of you are irrational and you don't warrant a response from me because you're idiots. What if that owner thinks of themselves as not the brightest person? Am I gonna be his next idiot? No, he's gonna take care of this.

You certainly have a unique perspective on Google reviews or just on online reviews relative to most people in our industry. And that's what I like about it. Like you, you've arrived at this perspective through first principles thinking, through original thinking. I'm very attracted to original thinking in people and, and especially when they can defend it. And articulate something new and different from just what everyone else is saying. Like, how many thousands of people could I have on this podcast? And they would just say, yeah, reviews are really important. You got to get your reviews up. You got to, you know, have you ever thought about like developing an incentive program at your company? It's like, yeah, I've only heard that like 1,000 times. But you, you're like, no, actually, I think it's unethical to do those types of programs. I'm like, all right, you have my attention.

I don't want to hear more about that. Yeah, I don't want everybody to hate me that I, you know, I view it that way. Just that's just just what works for me. Like maybe I have just this irrational bar, you know, for, for that. And, and I probably do. Like there's, there's a lot of ways I'm thinking wrong about stuff. Let's be clear about that.

You know, I'm clear on that. Yeah. Don't worry. Now we do an in, we do NPS surveys of our owners and clients, you know, internally. And we update that every 3 to 4 months and we track the score and all the negative comments that come through pop right into our Slack and we take that information and use it to improve our company. So I'm a big believer in general of listening to our customers en masse, not on a case-by-case base in my inbox, and making adjustments to our company as we go. I just want that happening not in the public. I don't necessarily need all that all over Google, and someone's getting the wrong idea about a weird situation 3 years ago by looking at this review score. I don't know.

It surprises me, Peter, because you I think one of your strengths is that you pull so many things about your business in front of the public that most people wouldn't dare to do, you know? So it's just odd to me that you would, you know, say that you don't want to do that with reviews.

I think it's because it's, it's marketing. It affects my business growth and therefore it affects my financial outcome and my team's financial outcome. And I'm just, I'm not willing to. I'm just not willing to like play whatever the Google algorithm has decided my company's score should be. Like, that's not, I never agreed to that. I never even agreed to sign up to receive reviews. I just started getting them. Today's episode is sponsored by Planomatic. My team recently started using Planomatic for all new listing media. By the way, we have around 25 rental listings at any given time, so we're doing a lot of volume. They love how fast Planomatic is and the direct integration with our property management software. If you haven't heard of them, Planomatic provides automated listing media services for rentals nationwide. But what does that mean exactly? Well, listing media includes professional photos and editing, floor plans, and 3D. They make this process so fast and simple that it's one less thing to worry about when we're trying to finish up a turn and get a property listed for rent. Plus, it makes our owner clients so happy when they see how professional everything looks with floor plans and amazing photos and even those really cool like Zillow 3D tours. I'll tell you, we've tried a bunch of different photo services locally here. We've also tried having our staff use their iPhones or a digital camera. My team tells me this is the best solution yet, and I agree. So go to planomatic.com to learn more. And thanks again to Planomatic for sponsoring today's episode. Anyway, we can move on from reviews, but I think that was really interesting. Okay. So one thing we talked about property owners and, you know, being selective about onboarding. We talked, we had a great discussion about great ideas of how to educate potential and eventual actual clients. About how our management companies work. I want to hear you articulate for me, do you have an idea in your mind of like 2 or 3 or 4 or 5 different customer avatars of property owners, like the accidental landlord or the intentional investor? Like, do you have some personas there that your team builds marketing or even customer service around? Or is everyone for you just lumped into one bucket and you treat them all the same?

Yeah, I think that's an opportunity for us. We've identified different avatars in the past, but they never became part of the fabric of the company. So we don't actively think that way right now.

No. Got it. And if you were to start down that road, how would you kind of break out your owners, do you think? I think you said you have like 400 or 500 property owners.

Yeah, we have about 500 right now. Accidental Andy would be a big one, right? Accidental landlord. And yeah, so Yeah, so I think accidental and deliberate Debbie, you know, she, she got into it, you know, on purpose. I think those are the two main groups, you know, there's, there's, there's other splinters, but accidental Andy and deliberate Debbie and accidental Andy is where most of our customers are coming in from. So they need a lot of education, a lot of handholding, and a lot of clarity around what we need out of the relationship. So we try to communicate that very clearly.

Yeah. And when you're communicating with your property owners, are you taking like an asset management approach to your discussions? Are you having conversations with your owners about—

Okay. 100%. And the most angry owners, I find that when we level up, so here's reactive property manager, here's proactive business manager, here's insightful asset manager. When we move up that value chain with an angry person, it changes everything. When their eyes open to the fact that, whoa, this person is adding unexpected value to my life right now, this is more than I signed up for, sometimes it tips that, that entire conversation on its head. So, you know, the person that's angry that they have this recurring maintenance issue, you know, there's, well, I mean, it's, I should That property was perfect when I gave it to you guys. There shouldn't be any maintenance costs. Well, really? Okay. So you've heard that one before. So, you know, it's like, hey, let's zoom out. Hey, by the way, did you know that, you know, you are winning if your maintenance spend is under 10 or 15% annual revenue? High fives. Yeah. Let's go.

What?

That doesn't work for you? No, that's winning. That's winning. No. Okay. Well, that doesn't work for you. Whoa.

Shoot.

Well, let's zoom out. I failed you. And giving a broader view of what running this business is like. So let's do that work now. Here's a spreadsheet showing your revenue and showing your expenses and where you should budget for your vacancy and your capital improvements and all that stuff. And like, oh, here's actually the number you should be expecting each month. Is that, is that about what you were expecting? No, it's not. Oh, geez.

Wow.

Well, let's talk about this. Should you stay in this asset? You've got $300,000 of capital here. Is it blessing your life the way it should? With, you know, relative to the stress that it's producing in your life, like, like, should we reposition here? And once you zoom out and help them see the problem, they don't even know what the problem is. The problem is they have an irrational view. They've never deliberately thought about what that capital is doing for their life in the first place. They just had a house. Right. And so when you show them, you, hey, you've got options. You've got options. You don't have to be in this asset. You know, it actually, you have to have a higher level of emotional tolerance for stress. If you're going to, if you're going to be successful in this asset, Here's what you should expect for cash. And by the way, if you turn it all over to us, you know, you're not— if you actually never called us, I'm confident that your property would be managed in the top 5% of management overall. And 20 years from now, it'd be worth double. And that's the other thing we gotta do, extend out the timeframe. They're thinking right now this month, and they're feeling trapped. Like there's so many things that if we elevate the conversation, it blows people away.

I got a couple comments on that. One, are you looking into or working with any of these tools that help visualize for property owners the performance of their properties over time and forecast that into the future? So Re/Discover's doing some work here, Lineage is doing some work here, Blanket's doing some work here. Really interesting new technologies and new tools that are going into the back pockets of property managers to let them have these larger conversations with their property owners?

Are you, uh, so, so I'm going to connect this to an idea that we talked about earlier, you know, this idea about customer service and like, we had the conversation, we resolved this, but you're bringing it up 6 months later. It's like, it's like, so here's the principle. You don't, and I think Ray Dalio talks about this, don't try to change the way someone thinks. Give them a tool, the use of which will change the way they think. I think this is probably one of the most important things we could be doing in property management is what you just said, which is helping our owners see really what's going on and the impact of this asset in their life and the, the application of this capital at this time and this property and its potential for growth. And so that's what matters. And if we can cast that vision and keep our our clients' eyes on that vision, all this day-to-day crap, they should just turn over to us. And maybe they're more willing to do that if they catch that vision, right?

Yeah, that's what gets me excited about some of these tools, because I think that's going to really help, help us be able to do that, help our owners be able to do that.

You know, I was in a Second Nature Triple Win Leadership Exchange years ago, and, and the guest speaker was talking about like Okay, here's raw goods, commodities, and then if you create them into a product, I, there's some book about this, right? And then there's like a 10x value increase every time you move up that ladder. Yeah. If we can engage with our owners in a transformative experience where they change the way they think and they become more wealthy people first in their mind, there's tremendous value in that. Tremendous value. What do you pay an asset manager to manage a $2 million portfolio? Pay him like 1 or 2% a year, right? So what's 1% of $2 million? It's $20,000. $20,000 is 4 rental properties in my market, 4 $500,000 rental properties. Okay. $20,000 divided by 12 is what? $1,800 a month, $1,700, $1,800 a month. Okay. That means that if I'm adding the value of an asset manager, You pay me $400 a month to manage. Oh, and by the way, you get all the management of the asset too, which is really labor intensive. Like if we start thinking of ourselves as asset managers, the value that we're bringing to the table is tremendous.

So you went right down the road I was gonna take you down. So that's, so that's great. Which is who, who's paying for this? Because everything you just articulated over the last 12 minutes. You did such a great job and I bet you're amazing with your clients on the phone and on Zoom calls and times 10 if you have some software that's going to help you do this. But your market wage, Mark, like if you were a W-2 employee, is in the six figures to say the least. And so we can't pay all our people that. So like our owners really want and probably deserve this high level of asset management and handholding and education, but they also want to pay $99 a month per unit. And so, like, should we really be doing this for our owners for free, basically? Or like, how do, what, what am I missing here?

We should be getting paid as much as we possibly can.

All right. Okay. Now we're getting closer in alignment.

Now, now we're on the same page. We should get, we should get it paid as much as we possibly can for the least resource expenditure. How about that? So, so the team in your property management company that is equipped to have the asset manager level call is your director of sales, the director of resale, the director of I'm buying more assets for you, investor, right? And so if we kick off, if we have, if we have this woven into our, our process, hey, when you hire Mark Brower Properties, not only do you get a world-class property manager working on a world-class system that took us over a decade to develop, right? And, and all of our values and all this, you know, what my senior operations manager calls fluff stuff. Mark, you're going to come in with your fluff now. So you'd like my senior operations manager. I think I would. A few months ago, I got him a no button. It says no 8 different ways. It's on his desk. And then on it, I got him a door hanger. It says, getting shit done, Don't bother me. So, you know, like, it's these little cracks. So we got a little of the crusty side over here too. But the asset manager team, if they have, if they can build trust, right, and they can be part of the relationship with the owner, this is the person that should be making $150,000 to $250,000 a year. And it's justified because they're transacting 10 properties a month.

Okay, so you're saying that the compensation for that, and I was just about to ask you, how are they getting paid? The compensation for that person comes Through transaction volume. Okay. But I mean, let's say you have an owner who has 10 properties, they still need asset management level service and advice. And how we're just supposed to take that on the chin?

No, they get that asset management advice because Lisa on my team, every year when they have their annual review call, and some companies do this quarterly, it's phenomenal. Like I was on a panel like last year where somebody had 5,000 units and they were doing this quarterly with every single— I was like, whoa. You have the time for that? Yeah, they have the time for that. And they're way smarter than I am, right? So yeah, so having this conversation about here's where we're at, Mark Brower Properties, we believe in long-term wealth building by holding, buy and hold. However, you know, have you considered these 4 reasons we think are really compelling to consider selling? And I created a video about this and I lay them out. And then it's so like that they get that video and then they get the call from Lisa and they're like, nope, I'm good. But thanks for checking in. You know, I don't know. I think that I used to do land brokerage in a previous professional life. I was talking to hundreds of landowners because at any given time, only 2 or 3% of them were actually thinking of selling their farm. Okay, well, did I stop talking to the other 97%? Hell no. You know, like, like, so yeah, you talk to everyone, you give value to everyone because it's a pipeline and you think about it long term.

Right, but I, I, I really take issue with this idea that we're getting compensated through the transaction. I mean, running the transaction is hard enough in and of itself, and that person deserves to be compensated for managing that transaction. But the ongoing day in, day out, year over year asset management functions that we're doing for our owners in an ideal world, we should get compensated separately from the transaction fees. For that work.

Then raise your management fees.

Yeah, basically. Yeah. Or charge, like you mentioned earlier, how financial advisors charge, which is like a percentage of assets under management. That model I think is appropriate if the property manager's performing at a very high level asset management functions and giving true expert advice and doing deep analysis and like all the things we would expect from a financial advisor.

Totally agree. And you know what, I think that I think it's true, especially with Accidental Andy, that property management services are vastly undervalued. We're perceived as a— we're perceived as a commodity service, right? It drives me crazy.

That's what I was saying earlier, where the market isn't willing to pay what they actually want from us.

So how do we solve that problem? I think one of the ways we solve that problem is that we make it easy for people to enter into a relationship with us and experience— you read $100 million leads, when you give, you know, like, what are these lead magnets? Okay. So let's modify the lead magnet idea a little bit and say, hey, you get my service at a discount for a finite period of time. And then when you decide you can't live without me, I'm going to double your fee. You know, how about that? Like, make it so valuable somebody wouldn't dream of walking away from you. And by the way, in a future version of my company, wouldn't it be cool if I could assess the resource expenditure by client? If I could measure that? Because then I could say like, dude's only paying me $159 a month, but I never hear from them. It's as if I own the property. He's given me all this support, right? So airlines do this, right? Economic theory, we're talking about these price strategies, right? Where you can carve out and hit people's demand curve at multiple points. You know, maybe we can get that sophisticated.

I'm counting on some of the vendors in our space to make it possible for us to understand the, the actual— so we talk about unit unit economics. And it's funny because like we manage units, but then that's like an economic term. But to be able to break that out by the specific client or by the specific property takes that whole thing to the next level where you really can figure out which 20% of your clients or properties are taking up 80% of your team's time and then take appropriate action. So that, I believe, is going to be coming with some of the workflow software and tools that that we all use. So that's gonna be an exciting time for our industry. Okay. I wanna shift gears a little bit and ask about hitting plateaus. So you mentioned, as I was prepping for the show, you mentioned in another podcast about hitting a multi-year plateau in unit growth at some point along the way. And I've had a couple of these. Yeah. And we're actually in one right now. Speaking of being transparent, we've been, I had that newsletter a year and a half ago where I talked about losing over 120 doors, took us from the 700s to the 500s. We've clawed our way back to around 650 right now as I record this in July of '24, but we've kind of plateaued around the mid-600s. We've been there, we've been here for like close to a year now. And I want to ask you about plateaus, like what's true when your business is stuck in a plateau and what's your, Like, how do we relate to this? Because it can be very disheartening as an entrepreneur. And this is like the third time I've hit one, so I'm sort of used to it now. But the first time it happens, it's quite unsettling.

So you and I are both in a plateau right now, and maybe we should form a plateau, uh, uh, support group. We need a support group for plateau.

This is so—

yeah, so it's a little discouraging, but you know, going back to the values, we got to own the outcome. So the fact that I'm in a plateau is 100% having to do with me. So I've just found over and over, and maybe you've had the same experience, Peter, when like my business follows my personal leadership journey. It just, it's absolutely correlated. And so I know because I'm plateauing right now that there's something I need to do to grow as a leader. And so I'm seeking out that knowledge. I love Alex Hormozi and his book, again, $100 Million Leads. He said, he's like, he's talking about growing his, you know, social media following. And he said, You know, I didn't know how to do it, but so I did what I always do. I paid for knowledge. Layla, his wife, set him up with a, with 4 calls. You probably remember this point, 4 calls with somebody that had the audience that he wanted for $120,000. 4 calls. The guy pays for knowledge. So what is the knowledge I'm lacking and how do, who do I pay to get it? You know, that's what I'm thinking about right now.

I, if I could identify, I've got a few things I could probably share with you. No, yeah.

Yeah. Well, I'm sure you do. Yeah, I'm sure we have the same unit count and we have a different view on like customer service. So, but there's probably 5. If I, should I be spending the time right now finding the 5 companies in the country that have 1,200 units that, you know, I've already moved through my plateau and, and to go shadow them. Is that what I should be doing? What are you doing to get, get off your plateau? Aside from talking to other people that have the same unit count you do.

Yeah, right. I know. Yep. That's what we're doing right now. Commiserating a little bit. And that's actually what everyone sort of defaults to, right? You hear this at the conferences a lot. And your point about this being your fault is that's exactly how I relate to it too. This has nothing to do with markets. Or, you know, my team or, well, I'm gonna come back to the team, but like, it's, it's my fault, right? I'm the one that put this company together. I organize it. I hired the people who work here. I train them. I set the culture and the, and the core values. And so the way I think about entrepreneurship is like, I'm always operating at like the 99th percentile limit of my knowledge. I'm always at the extreme outer edge of my competence and my skillset and my knowledge. So that makes it challenging, right? You're always like, as soon as you learn something new and you improve in one area, like everything sort of rebalances out and you then grow and then you immediately hit your next ceiling, like instantly. And so there's, it's like, and there's no limit, right? It never ends. It's just always more.

So yeah, I have another thought about this. So go ahead, Dan. So, you know, channeling Dan Sullivan again. The who, not how. And there's this YouTube channel called CEO in a Bentley. This guy, I think he's like a, like this Thai guy, really smart dude. And he had this video that I watched a few months ago and he said, he said, look, from $0 to $1 million, you're just trying to find your product market fit. From $1 million to $10 million, it's all about the people. And so I know we might get into like building maintenance companies. I started a maintenance company last March, so less than 18 months ago, and that maintenance company is now doing $210,000 in monthly revenue. It has grown way faster. And I'm sitting here thinking like, it's taken me 13 years, 13 years to get to, you know, $2 million in recurring revenue, not counting, you know, transactions or anything like that. In my property management company. And then I have this rocket ship of a maintenance company get there in 18 months. And I don't think it's just because it's a maintenance company and they're more profitable and you can grow them faster. It's easy. Maybe that's true. But what I think happened is I was inspired by Dan Sullivan's Who Not How, and I found the who. And I have an hour and a half meeting each week as the fractional CEO of my maintenance company. And this guy runs everything else. But he, he wasn't thinking straight, so I was able to like, you know, transfer his thinking, cast a vision, and then he just grew it rapidly. So do you think it's the people? Do you think we need better people?

Yeah, people is a huge part of this, huge. And the, the longer I've been in business, the more I lean in that way. I used to be a process maximalist. I thought everything could be solved with the right process. What I believe now is that The right person almost doesn't even need a process, and that even if you have a perfect process, a bad team member's still gonna find a way to mess it up. So now processes are still important, obviously. I still talk a lot about them, but especially in the leadership arena, the people is, is massive.

And so, okay, can we drill down on this? Cause, cause I want your opinion on something. So, uh, what I've found, so whereas I don't know really what someone's like until I work with them for 6 months. You know, like if they're really a bad apple, I found out in 30 days and they're gone.

Right.

But if I have a careful hiring process, you know, it's 6 months to a year in before I find out like, wow, they've been trained and now they're being tested. And it's like, okay, they're going to make it or they're not. So Ray Dalio talks about this. Um, he talks about how his culture was so brutal that they would recruit, hire, train, test, and either fire or promote and just repeat, repeat, repeat. And it's brutal. And it's because he wouldn't tolerate anything less than just an absolute A+, okay. So maybe I should be brutal and be willing to do that. But there's also an emotional, a cultural toll on your business when you just keep bringing people in and then, and then fire them and bring, you know, so where's the balance between Costco, which I, I'm a huge fan of the Costco bit of it. I'm checking out at Costco and someone's got a name tag that says I've been here since 1997.. And I'm like, what? And they seem like the best checkout clerk, like, ever. And, like, they're still there. Like, should I be, like, really trying to build a team that can be here 10 and 20 years and people have this perception that that's a good company? Or should I be, like, super brutal and just, like, cycling through people so, so that the cream just keeps rising to the top? Like, do you have an idea on this? Like, do you see how these are diametrically opposed? And, like, how do we get the best team There's another real quick. Alex Hormozi in one of his videos said, I talked to a billionaire on the phone. One of the insights I got from my billionaire conversation was that he had never worked with a rockstar that wasn't always a rockstar from day one. And so that was a shift in his thinking. Like, like trying to invest in these people's, you know, cultivating and training people up and eventually they're gonna be a rockstar. According to this billionaire you talked to, never was the case.

Yeah, I think the biggest differences there really come down to the types of businesses that we're talking about. Like Ray Dalio runs an investment fund or whatever it is, and that's like a bunch of people, smart people sitting around working on algorithms and investing and stuff. And so yeah, you need like the top of the top of the top people there who are handling that money and making those decisions and not making mistakes. That's a lot different than the checkout clerk at Costco. And so I think what's important as a business owner is to figure out what kind of business you're in, define success, define A performance, A-level performance for the various roles at your company, and then fill those roles with the right people. And what A-level performance at Costco is gonna be a lot different than at Ray Dalio's investment fund. And the other thing is like, you just have to be really clear with people about this is the current role that you're in and here's the pay scale for that. And you can be here forever. At least this is my perspective. You can stay in this role forever and you're gonna get cost of living increases. But if you want to make more money, then here's some other roles and here's their pay scales, but here's also the What's required in order for you to even apply for those roles, the skill sets, the knowledge, the experience, and you give them those options. So the issue of like cycling through people only working with A players, I don't know that that's realistic for a property management business. I think that's if you're running Facebook or Ray Dalio's company, that maybe that's the case. But when the rubber hits the road, you can't just cycle out 80% of your company every year because they're not A++ players at, you know, $25 an hour. So I don't know if that's a satisfying answer, but that's how I relate to it.

Then how do we get the who's on board that move us to the next level? Is it at the leadership level? Do we— are we more—

so we're more brutal at the leadership level? Yes, 100%. Okay. Yeah, that's how I think of it.

So is, so is your focus finding and leveling up leaders? Is that what your focus is right now to get off your plateau? 100%.

100%.

And how's that going?

What's working? Yeah, so I'll update you again, and this is as of July 24th. I'm not sure when this episode's coming out, sometime between now and December. We just earlier this year found an awesome BDM and, and he's on our leadership team, so I consider that a leadership role and may, maybe eventually he'll have a team or whatever. We also just about a month ago placed an awesome marketing person. This is our first ever internal marketing hire. Marketing manager's the title. Again, he's on the leadership team, even though these, those are both individual contributors. I consider them leadership roles cuz they're responsible for a whole function at the company, sales, marketing. And so right now what I'm up to is our COO, Kathy, who's been with us for 2.5 years, is departing, moving into like a semi-retirement type lifestyle. And so I now have to find my next operations executive, basically my number 2 at the company. And so this, I'm right in the thick of this and it's all about finding that absolute killer rockstar, A-player who has the ability to run this company and grow it and lead that leadership team essentially. And that is consuming a massive amount of my focus. And I'm, I'm really clear on the fact that a good hire here takes us down one trajectory and a bad hire here takes us down another trajectory. And there is no room for learning on the job.

For this role. Well, that, that's exciting.

Yeah. So does that answer your question about how to think about this?

I think it does. I think you've helped me. Yeah. You've helped me identify that there's different tiers and the people doing the blocking and tackling, I don't need to put them through the meat grinder about like, you know, are you smart enough? And like, here, like they need to meet the requirements, but, but we can have some stability there. And certainly the investment in training a property manager the right way, that's really been on my mind recently is I was like, wow, to train a property manager not only to be a great technician with regard to executing— this is a whole conversation topic we could go into, which is like, well, like, what are we doing? Well, we're, we're running a business over here, but then we're also keeping people happy, which is the annoying part. If I hear you correctly, that's the annoying part for you. But it's like, okay, there's a totally different skill set for both of those parts, and they're super important. And it's like Like I, my longest property manager here is 5 and a half years, Diane. She's great. But it's, it's like, it's because we've trained for years and years and years on the Mark Brower Properties way and we don't do property management like, so, so it's like, man, you know, I want longevity and stability at that layer. And so you're giving me hope that that's maybe the appropriate thing.

Yeah. The other way I think about this, quite often we'll have a problem bubble its way up to me, some sort of operations problem or marketing problem or whatever. And it'll reach my desk and my instinct is to dig in. Oh, let me see what I think about this. Let me, you know, consider the angles and, you know, spout a really smart sounding answer to my leadership team about, you know, how we should handle this. And I've been retraining myself to, to say, you know, my, so classically my COO will bring me like a big problem like 2 months ago and she'll explain it and everything and I'll just say, Yeah, that sounds like a great thing for our new marketing person to handle their second week at the company. I'm not going to figure this out right now because we're looking for the right marketing person and I'm going to take all the energy that would have been focused on solving that problem and put it into finding the right person. And so too with all the operations problems, and there's always operations problems, all the operations problems that bubble up every week at our leadership team meeting, it's like, yeah, these all sound like great problems for our new VP of Ops or whatever the role is. To, to solve when they come in. And I'm going to be laser-focused on finding that right person, not solving a problem that can exist the way it is for another 4 to 6 weeks without, you know, materially impacting our customers.

So what I really love about what you just said is that you have a willingness to say no, but you have reasons for it, and you've attached it to leveraging yourself at a much higher point. Is recruiting. And there's, that's a whole conversation topic too, because I've really screwed that up. Like recruiting, hiring, enrolling leaders, you know, and giving them vision. And, and, you know, back to your earlier point about like when you said, hey, here's your job role and here's what it pays and you're going to get cost of living increases, but here's other jobs that you could apply for. I think A-players want to be in, one of the reasons I feel pressure to grow my company Isn't because my lifestyle is insufficient. I'm living a decent lifestyle right now. And I'm not, you know, so greedy that it's just never going to be enough for me. But to attract and retain A-players, they have to know that there's a growth path for them. That is more important than their current pay.

And one of the hardest things to come to terms with as a business owner is that the talent that comes to work for you is a reflection of your leadership skill. It has a lot less to do with how much you can pay them and like, is the recruiter doing a good job for you? And like, is the job listing right? And like, which technique did you use to analyze their personality during the interview? Like, no one is going, no one, like the caliber of people who are interested in the role that you have open, is going to be reflective of what your whole company is up to and how you relate to leadership roles at your company and like the structure around the structure that's been built around this role. People complain, oh, you can't find good people, blah, blah, blah. And the sad or hard challenging thing is like, that's on you, that it's, it's your You're just seeing a reflection in the marketplace for talent of who you are.

I love that. Yeah, you're owning the outcome there, and I couldn't agree more. And so, so people don't want to work for a brand. They don't want to work for a logo. They don't want to work for a paycheck. They want to work for a leader that inspires the best out of them, right? So I don't know if you've had this where I've messed this up before. Is I can— one of my gifts is selling vision and getting people excited about future vision. And if I cast too high, too grand of a vision, and then I'm not able to deliver, that'll backfire on me. And so I've tried to temper that a little bit over the years. Like, I use my— you and I, we've talked about Vivid Vision or Cameron Herald and all that. And, and so I have my Vivid Vision for December 2026, like, detailed And I use it in hiring. I post it on, well, my recruiter, my talent recruiter is supposed to be posting this on all my job postings, the link to the Notion page that this is the vivid vision. And I had an interview just, and the other thing that I've committed to, and I'm curious if you do the same thing, is I realized at a point probably 3 years ago that for the most important roles in my company, I should never stop hiring. Because whether I have a vacancy or not is irrelevant. To find top talent takes time. And so I am always hiring for property manager. I am always hiring for business development manager. So specifically, the roles that are the hardest to find talent for, I'm always hiring for them. And if I don't have a spot and I don't want to brutally just like shove somebody out that's doing an okay job because I've got this rockstar A-player, I'm building a bench. I'm building a bench for them, but they want to be enrolled. I had an interview yesterday for a business development manager and best candidate I've seen in 6 months. She was really good. And we got to the point of the conversation where I was talking about vision and she said, okay, what you just said just now about your desire to be in 5 markets and to have 100 doors being added monthly by the end of 2026. That's what's got me excited. Not the $60K base plus $250K per door closed. I'm not excited about that. I've made more money than that. And so people want to follow a leader that has vision, that's bold, that shows them that they have a path to greater success.

I love that. Yep. I've found that to be true as well. And I've done a lot of work on making myself someone who's worth working for.

Basically, yeah, your alter ego that's worth following.

I used to have this egotistical idea that it should just be obvious, that like anyone you talk to me for 10 minutes should see that I'm kind of smart and I've got some stuff figured out and we're on a good path. And like, I walked around with this idea that it just like should be self-evident to anyone who opened their eyes that we were going to be successful and Here's how we were going to do it. And that book Vivid Vision really helped me get clear on the idea that no, most of that's in my head and I've probably never really talked about it, or I talked about that one time and I thought everyone remembered it and forcing me to write it all out and get really, really clear and document that for everybody. That was huge. And the other thing that was huge for me is just realizing that even if you are super smart or you have a great vision or you have a great system, First of all, no one cares. And second of all, no one remembers. And so you have to, like, you have to be your own marketing department and talk about it loudly and often and write about it and share about it and take pictures. And like, the media stuff, which I kind of accidentally backed into, has been really great for helping me understand how to, like, show up in the marketplace as someone that people might want to work for. I think there's actually a lot of different paths to that. You don't have to like start a newsletter to get interesting people applying to work for you, but nothing is not one of the paths. Um, so like for you, like how have you, um, related to this?

Well, Alex, again, to channel Alex Hormozi again, Alex Hormozi says that building a personal brand, he came to a point in his life when he decided that building a personal brand around himself himself was the most valuable thing he could do. And he said prior to that, he just wanted to be the rich guy that nobody had ever heard of. But then he talks about— what's the Jenner girl that, that built— at age 19 or 20 is worth a billion dollars because of her cosmetic line? And Conor McGregor and The Rock and MrBeast. If MrBeast points his finger at something, it could be a $100 million business. Okay. So, and by the way, if you get enough attention or you know how to hold attention, YouTube pays you for your marketing. Like, that's brilliant. So even though that's a long, a long-term strategy, like absolutely no question, your rise to prominence in our industry through your newsletter and your content, your podcast and everything that you're doing, I believe gives you greater access to talent. That you can leverage in your business.

No question. Yeah. I, and I just, I don't think that's the only path. I think there's a lot of ways that you can hold yourself out there and be worthy of someone. You know, not even saying that just 'cause you have a newsletter, you're worthy, but there's a lot of different ways to being a leader worth following.

You know, people, the other thought I have about this, this thread is that we're emotional creatures. You know, as much as I wish my landlords were rational, as much as I wish my employees are, it, people are just absolutely not. There's a thought that precedes a feeling that precedes an action, okay? And, and for most people, like, they're not conscious of 95% of that chain, right? So they're acting based on emotions that are coming from thoughts that are just these habitual thoughts. And so charismatic leaders inspire people to feel a certain way. And that feeling is what enrolls them more highly in the vision or the cause and keeps them around. I had a guy that gave his 2 weeks' notice and he wasn't a direct report to me. He was one of our field techs and gave his 2 weeks' notice. And then I just gave an exit interview and I said, hey, just curious, you know, what's going on? And we started talking and then his eyes were lighting up that he was talking directly with me. And anyway, I realized that what he wanted more than anything was an inspiring leader to follow. And that he would gladly walk away from the more money he was being offered if he could access that, if he felt like he had that. So we have a little bit of a closer connection now, and I helped cast a vision for his future in the company, and he's doing a very good job, and he has the potential to become a property manager and then maybe beyond. But he didn't hear that from anybody, you know, before I did that exit, so he stayed.

So I think that—

so he stayed?

He stayed. Absolutely. That's great.

That's an amazing We also had another who I consider one of our best players. We had another gal that got recruited away to a multi-family Class C, like, property management outfit in town because she needed to make more money. Single mom with a daughter, she's living with her mom, she's living with her mother, and she's like, I gotta get my independent. So she was gonna get a 50% pay increase. She leaves, and 2 weeks later I get an email, I made a huge mistake.

The Class C property, uh, is a wake-up call.

I made a huge mistake, Mark. I know, I know I left. I know, like, and look, I don't want to send the wrong signal in my company and like bring people back after they leave, but then I kind of like did an informal survey of the rest of my staff and I said, hey, what do you think? You know, she wants to come back. And they said, look, we feel like this is a work family and sometimes people make mistakes. So anyway, like, if you build something that moves people emotionally Like, what is pay on the ranking of why people work somewhere? It's like number 4 or 5, maybe?

Yeah, I've always told my managers, if someone's complaining about pay, there's something else going on. Doesn't mean we don't need to look at compensation. Doesn't mean we shouldn't be paying a fair wage and look at what's market and things like that. And we have a process for doing that once a year. But if someone's complaining and bringing that up, I'm not making enough money, there's almost always, 98% of the time, there's something else going on. And that's how it's showing up for them. And they might not, may not even be conscious of it.

Just like the owner who's not conscious of why they're so pissed off about their maintenance costs. You know, it's just like zoom out and help them see the problem for what it is. Most of the things that are problems, how does the quote go? How you see the problem is the problem.

Yeah. And like there's a great quote around, uh, a problem well-defined is half solved or something like that. Yeah. All right. Last thing. I know we're running a little long, Mark, but you had a note in some of our pre-show emails about saying no. And I've, this is something that's been on my mind quite a bit as the opportunities I have access to have started to come fast and furious in the last year or two. The skill of saying no, like, where did you learn this? When did you learn this? And What are some things, some takeaways for the listeners of that could be valuable for, you know, a property management business owner?

So in the room I'm sitting in, I have a quote on the wall from Steve Jobs that people think focus means saying yes to the thing you've got to focus on. That's not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to a thousand things.

Yeah, it's so good. I remember seeing him say that.

So the reason I mentioned it in our pre-show is I admire your willingness to say no. In fact, you went on your retreat recently, you read 5 books, and some of the things that were initiatives that you crossed off, I don't think, I don't think most people would have the willingness to cross those off. And I think it's true that the more successful we become, the more opportunities present themselves. And so that ability to focus and say no becomes ever increasingly important. So, and I was really surprised actually at one of your nos that I dove headlong into this year, which was joining EO. You know, I feel like one of the things that I need to do is level up as a leader. And what better way to do that than through osmosis by getting myself in a forum with really smart people and getting a mentor that's a YPO member and going on, going to Alchemy in Colorado in September. And like, I feel like that's what I need, but I respect and admire your not only willingness, but ability to say no, even with your staff bringing you problems. Like, hey, that's a really good problem for this other person. And I'm going to, I had a, I had a mentor one time that said this, and this really kind of addresses a thread in our conversation today, I think. He said, he said, I'm the only one that can manage my energy. And at the time I was like, what the hell is he talking about? Manage your energy? Like, what's this, some kind of like New Age spirituality stuff that he's talking about? He's like, I have to manage my energy. And so what he was aware of is that he could only perform at his best when he had the energy to do so. So he had to be very selective about the things he chose to focus on and the things that gave him energy, gave him access to what was closer to his best contributing self, can, you know, country highest level of contribution. And so anyway, I, I don't know if that's what you wanted to talk about, about saying no, but like, I admire that about you. And I think not enough of us do that. And in fact, not enough of us do that early on in our company when we're wanting to say yes to everything. I think if we start by saying no and being really specific about what we want we get where we're going a lot faster.

Like, but what are your thoughts? Yeah, my thoughts are, and Alex Hormozi, we've talked about him a lot today, but he's got some great quotes around saying no and how it's a skill that you think you've mastered at once, but actually you master it, then you level up and now you have to remaster that skill because the, the new opportunities that are now coming are bigger. And so it's easy to say no if someone asks you to cut their grass for $20, But it starts to become harder when someone comes to you and says, hey, I've got an idea for a $2 million business. I've done it 5 times before. Do you want in? I just need 10 hours a week from you. It's like, ooh, ah, hmm. I don't know. I mean, this is, you know, you gotta, but you gotta practice that stuff. The more, the higher your opportunity cost becomes, which naturally occurs as you level up and as you get older and as your business matures and as you, as you learn more. The higher your opportunity cost, the more things you need to say no to and the more lucrative those things will be, and therefore the harder it is to say no to those things.

So yeah, the word opportunity cost I think is so, so, so important in terms of the way the mindset of a business owner, especially if we're thinking— if a business owner is still thinking about financial cost and not thinking in terms of opportunity costs, That becomes at a certain point in everyone's business journey, that becomes a bottleneck. Like, absolutely, we have to think about things in terms of opportunity costs and your willingness to say no. If you— if to manage your energy, you're like, hey, I'm willing to work 40 hours a week. Okay. And your willingness to say no to a $2 million business. I don't know what the net income from that business would be, but let's say it's 20% and then you'd get half of that. So $200 grand. So you're basically saying like, no, my My time, my contribution, my impact is worth more than $800,000 a year, or it could be, or, or here, here's a better way of saying it. It never will be worth more than $800,000 a year if I get myself stuck into these business opportunities that put that ceiling on it.

Exactly. And like the, the levels of saying no, it's like, it's easy. Like you said, it's easy to say no sometimes and think of this in terms of financial cost. And then the next level is like your time. You only have so many hours in the week. But coming back to what you said earlier about managing your energy, yes, that's where I'm at with a lot of this. Yeah, I've got a lot of projects, I've got a lot of businesses I'm involved in, and so there's only so many things I can give my energy to. Even if theoretically we could squeeze it in the schedule, what other projects, what other businesses are going to suffer, what other commitments that I've made Am I not going to be able to live up to? And the time that I take away, and I do this in June and I do this around the new year, those are the times that I get clearest on questions of what I should be saying no to and what is my opportunity cost right now and what's bringing me energy and what's taking my energy. I find it nearly impossible to get clear on those things in the day-to-day or even on a weekend. I have to physically separate from my business, from the main business that I run mentally, geographically, and that's when I can start to have these deeper thoughts and start to think bigger.

I love that you, and I share the same vision, I love that you talk about that you're, help me with the words, building a freestanding property, a business that runs itself, a self-running property management company. My same vision. I got into this very deliberately. I wanted to turn the very rare corner of moving from self-employed to business owner, true business owner. And what I thought that was like when I first started the journey, I'm coming— as I'm along the drive, it's way, it's way bigger than I thought it originally was. To get a company to the size of revenue, to be able to attract and retain the level of talent to replace us as the founder is not a small thing. And I think it's brilliant. And I think that, you know, if once we crack this puzzle and solve it, then it could be solved in other ways. And then the opportunity cost is like, it shifts, right? Because then it's not, well, how much of my time is it going to take each week? Any endeavor that you, that you feel like you have the ability to contribute to, you know, that you could scale it to the point where you could scale yourself out of it and still have ownership. And so then the return becomes infinite on your time.

Yeah, I, my perspective on this idea of a self-running company has really shifted so much over the 11 years I've been in business. When I first started, I wasn't thinking really about a self-running company. I was just thinking about getting a company going that could pay me enough to afford rent at my apartment at the time, let alone, you know, employees and, and all kinds of other stuff. So it was like survival. And then, you know, I started listening to all the, you know, you read 4-Hour Workweek and you hear people talking about you don't own a business, you own a job and blah, blah, blah. And I started to feel badly about myself that I wasn't to the point where I had a business that I could step away from. And, you know, I was still integral to the functioning of the business. I started to feel badly about that. So then I went on this journey to kind of the self-running management company and Taking June off has been a big part of that and, and getting my COO and the focus on systems and process. That's all been a part of my journey to getting the business to the point where I could step away for a month and have it grow during that time. Check success. I think I've accomplished that. What's interesting now though is my thinking is starting to shift again, and that is I don't want to sit on a beach for the rest of my life, even though theoretically maybe I technically could at this point. I don't know that that's quite to that level, but what I need, the way I think about business now and owning a business is that I want to own and be a part of a business that I want to show up and run every day and contribute value and be a part of something bigger. And so getting to a point where I'm understanding what my role in that type of business would need to look like. And what that business would need to be up to in order for me to want to not run from it and, and get it to be self-running so I never even have to show up. That's like the third big shift for me. And I'm in that right now. I'm feeling around and I'm thinking and I'm learning what, what would a company look like that didn't promote within me this fear or desire that this needs to be self-running. I need to distance myself from this a little bit. So that's, that's how I'm thinking about it right now.

Uh, quote comes to mind. I know we're over time. Okay. I was trying to find who said it. God's gift to us are the talents and gifts that he gave us. Our gift to God is how we use those in the service of others. I think as we've moved, as I've personally moved up this Maslow's hierarchy of needs, and my bills are covered and my future is covered and I'm moving up to self-actualization, I realize that I'm the happiest when I'm using— when I understand clearly and I'm using my gifts, God-given gifts, in blessing the lives of others through service to them and helping them grow and helping them do the same thing. And for that reason, I've told my wife I'm never retiring. It doesn't matter how much money I have, you know, I just look forward to staying on this path of adding greater and greater value to other people's lives. And it sounds like maybe that's what you're looking at now as well.

I think that's a great way to wrap it, Mark. Thanks for coming on the show today. This was a really fascinating discussion. I hope listeners got as much value out of this as I did, frankly. For people who want to follow along with your journey, Mark Brower Properties and and some of the other things you're up to, like Solo PM, where's the best place for them to do that?

Yeah, follow me on Twitter, Mark Brower. Look us up on Facebook and Instagram, Mark Brower Properties. If, if you got value from this interview and you decide to give my company a 5-star review, I, I, that would be okay by me.

All right. Okay. I won't hold that against you.

All right. Thanks, Mark.

All right. Thanks. 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.