Lisa Wise - Putting People & Place Above Profit

you know, we're interested in making sure that we understand and can vouch for the actual service experience the owner's having. We're not having our vendors pay us for the exposure. We're pairing good vendors to offer good services to great clients. It's that simple. And if we're doing a great job, we'll have more business and those vendors will be happy. They'll answer our calls first. You know, the currency here is the wow factor and delivering excellence. It's— and then we believe that that will be that, that creates proof of concept and more people want to work with us, and it will be sort of organically and naturally occurring enthusiasm for the product versus, you know, enticing vendors to want to work with us based on a pay structure. We want it to be on quality of work.

Welcome to season 2 of Owner Occupied. On the business of property management. Owner Occupied is a show about property management in the real world. I'm your host, Peter Lohmann, co-founder and CEO of RL Property Management. For season 2, I have a different guest each week and we go deep into conversation about what actually works when trying to build and scale your property management business. Thanks for listening. Now let's go. Welcome back to Owner Occupied. I'm very excited today to introduce our guest, Lisa Wise. Lisa is an extremely successful property management company owner. She actually owns a few different companies, which we'll get into. And I'm really excited to introduce her to all of you and learn a little bit from her about the successes that she's had in different areas of growing various property management lines of business. So Lisa, if, if you wouldn't mind just taking maybe 2 minutes to give a little bit of your background and kind of bring our listeners up to date with where you are today and your businesses.

Sure, absolutely. I am Lisa Wise. I am the founder and owner of Flock DC, which is a family of real estate management companies situated in the District proper. We only manage property in Washington, DC. And we're, we're really a family of companies that focuses on a high-touch residential property management experience. We've been very intentional about being a purpose-driven company. We've been very intentional about our, our sort of more sophisticated marketing strategies, branding and identity, community engagement, alternatives to marketing that are non-traditional but community-oriented. So today, you know, we started one property at a time in 2009. And fast forward 13 years and we manage over $2 billion in real estate in Washington, DC. And between our family of companies, we manage, we touch about 6,000 doors at any given time. Some are in condo buildings that we manage and some are individual rentals that we manage. So I have a team of about 75 people and we're happily growing and continue to do so. In the meantime, I started another property management company that actually doesn't have a tenant involved. So we do property management services for people that own and live in their homes. That business is called Birdwatch, and we are active both in Washington, DC, building on my network and community and reputation there, and we're also operational in Philadelphia.

So fantastic. And I want to jump right in with Birdwatch because it's so different and so interesting, I think, to folks who are in our industry, it's, it's so different from what we normally do. So if I'm understanding correctly, it's, it's basically property management for homeowners who live in their own home. So if you move in, and the way I've envisioned this is like, say you move to a city, and it's like you haven't lived there before. So you just moved to the city, you don't have a network of contractors and vendors, you may not even have many friends or family there that you can call for a referral. Well, what do you do when there's a leak under the sink or your AC breaks? Like, yeah, you could Google around, but you know, you don't have anyone to really call on. And Birdwatch or services like it basically are like a concierge in that they're going to— it's almost like the tenant experience, but in, in your own home. Is that right?

Yeah, exactly. With a little bit more to offer, right? So we're positioned to help homeowners that want to do upgrades. So if you want a room painted or you're having, you know, a child-proofing, you've got a new kiddo. And if you're thinking about, you know, different strategies for renovating your home, we can coach folks around that as well. So, you know, tenants typically aren't engaging us on those items, but homeowners, it's real value add to know that you can kind of make one phone call and tackle everything from a roof leak all the way to, you know, I want my windows caulked to I want to paint the nursery for my kiddo and have a dog door installed, or I need a playset built in my backyard. And those are the kinds of things that we think do two things uniquely. One is we save people time. And two, we're interested in helping people have just a higher quality of life in their homes. And if you can access trusted professionals that are going to help you do that with less friction, with more predictability, fairness, and quality, then I think that a nominal monthly fee for that level of service is something that can be a real game changer for homeowners.

Yeah, I completely agree. Now, are you using in-house maintenance folks for this or third party or both?

We do both. So we have maintenance technicians in both locations. There are certain trades where obviously having in-house technicians wouldn't make sense. So that, that would be roofing, lighting, pointing, you know, chimney sweeping, things of that nature, particularly those areas that are highly regulated by OSHA. But, you know, for a large number of repairs and improvements can be done with our in-house maintenance technicians, which would include, you know, small tiling projects, caulking projects, light installation, dishwasher repair, like plumbing repair, things like that. And in both markets, we have plumbing on staff as well as HVAC. We typically won't engage in an HVAC replacement as a primary maintenance technician, won't handle that part. We'll have a third party tackle it, but we can have in-house maintenance technicians handle the biannual servicing of the units and testing and making sure that they're in good shape. And that's great because it extends longevity of that actual system. It reduces energy consumption and more predictability with regard to to that particular unit. So, so many people's expenses in terms of home maintenance and unpredictability is around heating and cooling because that's a baseline quality of life issue and need in a home. But when we can do those things in-house and keep those systems running smoothly, it's just better for everybody.

Very important in the Northeast as well.

Exactly.

Our California listeners maybe think, oh, what's the big deal? It's 75 every day anyway.

Yeah. Indoor-outdoor living. Yeah, we can't just go outside when it's hot or cold, right? You know, you need to have climate control. It's better for the buildings as well. And so the other piece that I think is really important is that we're aiming to create, you know, consistent preventive maintenance program for people's homes. So what are the things that are kind of lurking in the background that can create problems that are both dangerous and/or expensive for homeowners? That includes things like not having your dryer vents cleaned out or your chimney swept or having that HVAC serviced or, you know, checking your water lines to make sure that they're not about to fail.

Even just detectors, we see all the time, smoke detectors, carbon monoxide, the basics.

Yeah, exactly. So, you know, when we go into a home for the first time to do that onboarding of that property, we, we basically do a property assessment and say, okay, so this is sort of the first category of things we would handle and recommend that you work work on quickly. This is sort of second tier, and this is the nice-to-haves. So, you know, if we go in and nobody's got a fire extinguisher, everybody's pulled off their smoke detectors because they're beeping, we want to get to that stuff first. If we have a 12-year-old water heater, we're going to say, listen, that's— you have numbered— it's a lot of those. And what's going to happen if this does actually explode is not going to be pretty. So those are the things that we want to address quickly and first for homeowners that they may not even be aware is something that they should be paying attention to.

Love it. And what does the pricing look like for a homeowner here?

Right now, we have our pricing model is walkthrough fee is $200 for a condo and $400 for a house. So that includes putting together a preventive maintenance program. It includes, you know, cataloging everything in your home so that we understand the systems, we understand the appliances, we've got all, we've got a record of the different housing elements. We take pictures and make sure that You know, when our concierge team is interfacing with you regarding your home, we have a cache of photos and other reference things that we can look at to make sure that we're oriented to the needs of that particular house. And we build a preventive maintenance plan during that visit and just, just establish a rapport and get to know your home. We also come in with thermal cameras. So if someone has a concern about, you know, air leak or potential mold, or they're worried about a water issue, We can use that thermal camera to get some additional information about whether or what the source of that concern may be coming from. So we can help get to the conclusion there and guide on what we think the next steps are. From there, it's a $75 a month membership fee for a home, and it's $50 for a condo. Folks can cancel anytime. So we have terms and conditions, but we don't have a contract. Rather than offer a guarantee, we just offer the option for people to stop using the service if they'd like to, and that's fine. And we're hoping that this becomes something you're so used to you can't live without it. And we're in an economy, an environment now where people pay to have their dogs walked, people pay to have their groceries dropped off, people pay for these do-it-for-me services that give us our time back. And we hope that this is something that is, is a total game changer for the homeowner.

Yeah, so $75 a month, you know, I'm thinking about that in terms of a management fee for a rental unit, and it's fairly comparable in a lot of cases. So you're taking in rental management what is basically a three-way relationship— tenant, owner, property manager— and now you only have two. So that's a huge advantage there. And I'm guessing probably some sort of standard markup on third-party work as well, like a GC almost.

It's a 15% markup on the, or coordination fee is what we call it for the third-party vendors. And in-house maintenance in DC, the market, it's expensive to live here. So cost of living is high. Cost of labor is high. Our hourly rate is $125. In other markets, can be lower. Depends on what our labor costs look like. And the whole formula here in terms of making this business, A, scalable, and B, highly effective for our client base is that we have great technicians who are really happy with their jobs. And so taking good care of them, making sure that they're well paid, that they're well supported, that they have a great benefits program means that they're going to come to the job and want to nail it every single time.

Yeah. I'm fascinated that you moved into a new market with this product. Before even, I think, your traditional management services. What was the thinking behind that?

I've had a lot of people over the years say, wow, you really have a secret sauce when it comes to how you run your management company. We, I mean, we pretty much studied the industry and said, you know, let's just do everything pretty much the opposite way. It's worked over time and see if that differentiates us. And it did. We've been very successful with our, with our block family of companies and enjoy both a good reputation and really strong market share, but it, it's not very portable as a business model. And, and frankly, there's not a lot, a lot of incentive to, to, to move into another market with a turnkey full-service property management product because at the end of the day, tenant-landlord laws are very different in different areas. The, the complexity of compliance and diligence and the, the the deep knowledge that you need to have of a city and an area in order to represent it well as a landlord is just a pretty steep learning curve. And it really kind of, it forces you to adjust your business model, especially in terms of what you can expect from a sort of per-door profitability changes depending on the marketplace. You know, you compare that against the number of rentals in BC overall, and there's not a strong incentive to think I'm going to grow bigger or better by adding another market, right? When there's growth potential existing where I am. Why would I expand that when it's a complex model to expand? And Birdwatch is totally different because it's a lot more portable. We don't have the complexity of the tenant relationship. So when you exclude that, suddenly you do have something that you can sort of drop into an, an environment and say, this actually can get traction more quickly, in part because we're, we're, we, we don't have the same demographic limitations. So, you know, we can appeal more broadly to so many homeowners versus the niche of a third party of managing, doing third-party management. I need to go out and find all of those individual landlords, whether they're the accidental landlord or the intentional one.

There's a lot more rental owners than landlords, or there's a lot more homeowners than rental owners.

Precisely. And we do have clients where, you know, they're happy and content in managing their own property, but they don't like the vulnerability of the maintenance piece, and we can offer a membership for folks that just want a maintenance service for their—

Oh, interesting.

Which means we don't have to completely isolate ourselves from that potential market. And I think for property management companies, they can certainly offer that service to folks who, you know, just have a one-off rental and don't really want the full package leasing and full-service turnkey management. You know, it's funny, I wouldn't, I wouldn't offer that product as my block family of companies because I think it's too complex as a relationship. I think when your first full-service management company and you're breaking down your product into just an individual layer of service, the relationships get too complex. And what happens is, you know, if you have a tenant who's unhappy, you deliver maintenance service and something goes wrong, and it could, it could be that the service was delivered fine, but it wasn't to the expectation of the tenant. And suddenly my management company is suffering a poor decision maybe possibly made by the owner of that property, but it reflects poorly on me. I don't have to worry about that in the birdwatch environment. It's truly we're coming in to perform maintenance. We're not being perceived as the management company. And so we're being perceived as we are, which is the company that can come in and deliver an excellent repair. So if for some reason that owner is having friction with their tenant, that's on them. I don't need to get caught up in it, but we can we have a sensitivity around how those relationships work. And so we can be thoughtful around how to make sure that we communicate with, with residents and things like that to set appropriate expectations. So we bring that kind of knowledge base, but I wouldn't want to put my property management company through the paces of just doing one layer of our services.

So Birdwatch is definitely a relatively unusual service offering. In other words, it's not something someone is generally going to be Googling for. Like we get a lot of, and I'm sure you do too, we get a lot of business from people saying, best property manager, your city, right? But I don't imagine there's a lot of people Googling for homeowner concierge Philadelphia or home management Philadelphia. So you must be doing some sort of outbound or education type marketing. How's that going for you guys? Like, what, what are you finding that's working?

We're doing a lot of paid marketing and advertising and digital— from a digital strategy perspective, that's effective. We have our websites are live. I spend a lot of time talking to people. In fact, that's what I do all day long is talk about Birdwatch to folks in our new market and our existing market in DC. And we will engage, likely engage a PR firm to help build visibility for the concept in general. I mean, I think that's the biggest challenge for us is not whether people like the service or will use it, it's introducing them to the fact that it exists in the first place. And so there aren't any strong competitors offering— there are no competitors offering this service in Philadelphia or in DC. In those regions. There's one tiny firm that does it like hyper locally, like in their county in Virginia. There are a couple outlying sort of services in Austin, Texas. There's one in the Hamptons, but nothing at scale and nothing that like really with the sort of the simplicity of the membership model. So a lot of that means just talking to people and getting them familiar with and helping them understand what we're doing and why. That means talking to people all along the home sales and acquisition process. So real estate agents, what we're hoping they will do over time is that Birdwatch will replace the home warranty as the go-to closing gift slash with this, your experience will be much better. You know, any of us in the property management world know what a royal pain working with a warranty company is. In fact, it's such a pain, we exclude any work directly with a warranty company.

We do too.

Property management.

Yeah.

Because they're a nightmare. I mean, if you'd like to just burn money all day long with your staff time, a home warranty is the way to go. They don't pencil out. They, you know, they're, it's, it's sort of like a scratch-off bingo card. Like you may win $2, but it's probably not worth it. The juice isn't worth the squeeze. So we're, you know, we're, we're thinking down the line, why not? We could actually add an insurance product if people are feeling like they really want something like that. But at the end of the day, I mean, you're going to get an inconsistent service standard. You're going to— you may or may not have anybody with ID show up at your house. You're going to fight for the claim. Warranty companies are designed to say no, and Birdwatch is designed to say yes.

Yeah, warranty companies are— you know, we spoke earlier about the, the three-way relationship in a rental owner-manager. Now you're throwing in both the warranty company and the actual company that's doing the work. Now you've got 5 people Oh, it's a nightmare.

It's a, it's, it's not, it's not a viable model, I think, for the long haul. I mean, it's really warranty companies are lead generation tools in the same way that Angie's List is, in the same way that Thumbtack is, in the same way that Handy is. You know, we're interested in making sure that we understand and can vouch for the actual service experience the owner's having. So we're not having our vendors pay us for the exposure. We're pairing good vendors to offer good services to great clients. It's that simple. And if we're doing a great job, we'll have more business and those vendors will be happy. They'll answer our calls first. You know, the currency here is the wow factor and delivering excellence. And then we believe that that will be, that that creates proof of concept and more people will wanna work with us and it will be sort of organically and naturally occurring enthusiasm for the product versus, you know, enticing vendors to wanna work with us based on a pay structure. We want it to be on quality of work.

Yeah, because you have an ongoing relationship with the customer in a way that a warranty company simply doesn't. So you have every incentive to give them a great experience.

That's exactly right. Yeah. And we'll have people say, well, what, you know, what, you know, what if the estimates you give us are too high? And, you know, one of the advantages is like I spent 13 years understanding exactly how much each thing should cost with pretty much— with granularity, right? I mean, there's a lot of information that we've gathered over a decade plus of of managing repairs in people's homes, you know, if we have a vendor that tries to overcharge, that vendor won't get any more work from us. So it's not their advantage and our client will be unhappy. And so that's not to our advantage either. So the way that the company is designed is really around ensuring and delivering a high-quality experience for our client base and for our vendors. We want them to feel, to love working with us.

Let's take a minute to thank this week's sponsor, resident benefit packages by Second Nature. So professional property managers understand how important creating a great resident experience is in order to deliver a great outcome for not only the resident, but the owner and your property management company as well. But it can be very difficult to devise a solution in which all three of those stakeholders win. This is where resident benefit packages come in. So Second Nature has an incredible package, which I'm about to tell you more about. 1,400 management companies are using resident benefit packages by Second Nature to help create this triple win experience. So here's a few of the things that you can include in this package. Filter changes, of course, residents getting filters changed on time. They arrive in the mail. It's a really great experience for the resident and helps them save on utility costs. They also have a utility concierge service you can include. Where internet, TV, and all the other utilities are taken care of for the resident on move-in. Not only that, they have a renters insurance program so you can bake in a master policy. That way your renters have renters insurance as part of this policy. They don't have to go out and shop for it separately. And it's easier for you as a property manager because you can track certificates and compliance all built in. The last thing I'll mention here, which I love, is credit score reporting. So for your residents who are paying on time and in full, you're able to report that to the credit bureaus and help them build their credit score. You can wrap all this into a triple win resident benefits package by Second Nature. So if you're a property manager using an accounting platform, go to rbp.secondnature.com, mention this podcast, and they can show you what packages, positioning, and pricing that other professional property managers in your area are using to win. Thank you to RBP by Second Nature for sponsoring. Now let's get back the show. I want to move to a discussion around branding. I know you must be tired of hearing this question, but your branding is just so good. And for anyone who hasn't checked out the Flock DC family of companies and the branding that goes along with it, highly encourage you to get on their website. It's so unique in the industry to see the level of quality and effort put into branding. And I feel like most property management company owners, possibly including myself, feel like branding is kind of like, yeah, I mean, maybe one day when we're really big and we're across multiple cities and we've got these big expensive marketing partners who want to charge $100,000 to redo our brand identity, it's like, it's nowhere near the forefront of their mind. But it's clear for you that it was almost the first thing you invested in was we're going to get this branding right. We're going to have a consistent look and feel. Someone who engages with any aspect of our company, whether it's the website or an email or anything, is going to be like, oh wow, someone took some time here. Was that just something you have innately felt was a, was like an ROI, or is it just something that was like a non-negotiable for you? Where did this come from and how has it been working? Like, are you feeling those tangible benefits Maybe it's hard to quantify, but I'm just so fascinated by it because it is very different.

Yeah, that was a lot of questions in one. So I'll kind of just give you an idea of what the journey was. I mean, I directed and have directed all the branding for the Flock family of companies from the very beginning. And I wanted more than anything when we started the company was to completely differentiate ourselves as a company, not just from other property management companies, but as a company writ large. How do we stand out? What is going to intrigue people? What's going to make them curious.

Well, the first thing you did right was you didn't have a logo with a house or a roofline. And also your name doesn't have anything to do with real estate, realty, management. Yeah. So that's like, you've automatically—

yeah, that was also very intentional, right? We wanted the brand and the logo to create a little curiosity and we wanted it to be just visually attractive. Homes are defined in large part, not just by shelter and comfort, by aesthetics. I mean, people's personal identities emerge in their home space and they reflect personality. And so if a home reflects personality, then shouldn't the home management company have some personality? And shouldn't that actually embody an aesthetic that people might find attractive? So what I wanted to do is just sort of take a page out of some of the better real estate agents at that time when we started, You know, they were having professional photos done and then you'd look at the property management company photos and you'd see like a close-up of a bathroom with the toilet seat up. And I'm like, what's going on right now? And why are they taking photos in the dark? Yeah. And the curtains are closed. I'm like, this is— there's— it's clearly there's a good way to take photos and then there's a bad way of taking photos. And I don't know why this property management world insists that the bad way is good enough, because if I'm a consumer and a, and a, and then I want choices. And which am I going to pick? Like, the property that has professional photos and a really great description that inspires me to want to picture myself in that property and like makes me sort of like gives me a little bit of a dopamine rush and be like, oh, I want that balcony, versus the includes balcony but there's no picture of it in the listing. So like, however you like, if you're attractive, then people will be attracted to you. And so like, that is exactly what we went for. And it's what we continue to do, which is to just really want people to affiliate and associate with our brands and think about it and be curious by it and shop with us and upgrade their homes and just feel like, "Well, there's no other management company that's going to have the listings that I want to see." The bar has changed and I think we were in part responsible for raising it. I see property management companies having better, more sophisticated collateral. Some are moving more so into social media spaces. Photography's better. They're using websites, some of which, most of which are produced by the different out-of-the-box property management softwares. And all that's been good, I think, for the industry as a whole. And obviously it's good for the consumer too. It's nice to see what some genuine or someone genuinely invested in showcasing the property. But at the same time, I also noticed that none of the property management companies were really promoting the properties on their website. I was like, well, that's a missed opportunity as well. And if I'm a potential consumer from the client side, I want my property on the site that looks best. And so if my property, if my property management website like completely blew everyone out of the water, then I'm going to attract a lot more clients that way. And it totally worked. It totally worked. And it wasn't hard to do. And we make a point of when we, as we built our brands, not just as a property management company, we built our brand as a lifestyle company and as a company doing really cool things in the community and being community experts. And what we made a policy around really early on as a management company was to never talk about property management because it's really boring. None of our social media ever mentions property management. None of our— I mean, we send a newsletter out every single week. We have for 13 years. We've never mentioned property management in it. Wow.

That is fascinating.

But we tell people where the roof decks are and the best place to have a happy hour and where to take a 3-day trip and what's going on in the city. And we're experts in our city because we manage thousands and thousands rentals. So when people want to come to us to figure out what to do when they're living in those rentals. So, you know, on all— what's great about all that stuff is it's free. Like, it's, you know, we spent maybe more on photography, we, we invested in a rich website, but, you know, that was just my time going into, you know, making sure that the, the writing was solid and that the, you know, visuals looked good and, and basically directing a brand identity that looked great.

Would you have any suggestions for maybe a smaller management company, more the size when you started out, who recognizes the importance of, of brand identity and of, and resonates with what you're speaking about, but doesn't have just like the innate ability or capacity to execute on that or to deliver? Like, where, what are some resources maybe they could engage with, vendors in the space? I mean, how could someone start walking down this path?

You know, when we first put our website together, like finding anybody that could do that work reliably and with any like strong technical skill and design skill in one, those, those two typically don't go in the same person's sort of resume, right? We, we, we had things that would look good but weren't highly functional. We had things that were, you know, it was, it was tricky to have all those different kind of components of the brand identity. Come together in an elegant way. But things are so different now. I mean, frankly, I think if, if you invest in a modern logo that doesn't have a house on it and, and, and sort of rethink like, you know, what's unique about your brand and you think about just differentiating yourself from the other brands in the, in the environment and stand out a little bit, then there's so many out-of-the-box website tools you can use. Appfolio, if you're using Appfolio or Bildium, I'm certain, I know Appfolio offers packaged websites that are very customizable to your brands and they do a nice job of creating templates that I think are, that don't look templaty. So a lot of stuff is way more, way more achievable and accessible now than it was before. I mean, it was just really hard. There was no, you know, WordPress templates and things like that didn't exist back then. And so I think it's much, much easier to do that. You can also leverage the gig economy by using Fiverr or Upstart or Upwork to get people that might be willing to turn around logos without spending a fortune. And so I had my first logo, we did, my original business partner and I just did together. He drew it out and then that was that. It was like really simple. We had a graphic designer sort of fine-tune it a tiny bit and that's our quail. And we use the quail because it's a Tucson bird and that's where my business partner and I are from. And it's just a fun bird because it has a little— I don't know what you call that, but it has a little stand-up feather. And then after that, we're like, oh, well, this is easy because now everything just needs to be bird-related. And so that kind of led to that. And I don't think you come across that sort of branding flashpoint, but it's always really worked well for us. But then after that, we sort of had a template for what that first bird looked like, and we just modeled all the birds after the birds, and that actually the same person has— or a different person has created most of the bird logos for us, and they're all completely consistent. But because we're really clear on what that brand identity and criteria looked like, it was easy for other designers to just build on that. And I can tell you the last logo that we had done was for a new product that we, we launched with a flock family of companies called Crane Consulting, and crane is for new developments. That just popped up in DC that needs support and trying to figure out what their governance structure looks like. And so obviously, it's a crane, and crane is all about building. So it's like the play on word bird. And I was like, OK, great. So we'll just send it to somebody at Upwork, and let's get a crane. And a week later, we had a crane, and it looked great.

That's awesome. Yeah.

And it was cheap, and it's like, launch another bird that quickly. So you can experiment with that. And candidly, you might get crap, but you might get something great. And so it's not like you You don't have to buy a $25,000 branding package to get some cool stuff.

That's awesome. I really appreciate you sharing those insights. You know, something that strikes me, Lisa, is that you're— we've spoken about branding and how your family of companies stands out in that way. But that's not the only way I think that your philosophy and your companies are differentiated within our industry. I mean, first, you've got the focus on multifamily. I believe, if I'm remembering right, rather than single-family. And I was listening to a podcast you were on and you talk about places and people over profit, which our industry tends to be very profit-oriented, especially I think in the last 5 years. There's been just never-ending discussion around profit and profit margins and how do we get more profitable and how do we outsource labor. And that's not at all the vibe that I get from you, you're much more about community and philanthropy and people and places. So, you know, of course novelty is fascinating, right? And I talked to a bunch of people in our industry and, and it's very different. And so I'm curious, how do you feel like when you go to the, the industry events and I've seen you speak at one, do you feel like welcome there? Maybe that's too strong a word, but like, does it, Do you feel like out of place with, you know, the whole multifamily and some of the other things we've discussed? And maybe as a follow-up question is, are you gathering any like followers or people who are like really into what you're doing and are like, I'm going to go in that direction kind of away from the crowd?

A bit, yes. So do I feel— well, I really appreciate that you asked the question with such candor. Not really, no. I mean, I think I think I'm— I would say I'm more welcome now than I sort of was originally. I think women owners in the space were more of an anomaly. My number 2 for many, many years is an exceptional colleague and also African American. And so the 2 of us were also just weird rolling around, like differences. And I am an unapologetically left-of-center person. I run my business that way. This does not mean that I believe that is the only way to run a business. I do know that the way I run business is quite unique. I also think that I've been one of the more profitable companies in the industry and have grown quite a bit. So some may disagree with my value system, they may disagree with my politics, they may disagree with my approach to put people in place over profit, to focus on justice before I focus on the bottom line. But I believe good business gets more business. And I believe that because I wear my values on my shirt sleeve, that I'll attract a much stronger and more loyal clientele than most people will. And that's— I think that the proof is certainly there. I have both team members that have been with me since the very beginning, and I have clients that have been with me since the very beginning. And that has all snowballed in a good way. And I believe that the way that we've differentiated our company and said, listen, we're going to be values-oriented, we're going to be very community-oriented, we're going to support organizations that take care of our city, we're going to care about affordable housing, we're going to care about housing justice, we're going to care about the racial wealth gap, we're going to care about making sure that there's as much equity as possible in the work that we do. We care about being authentically diverse as a company. We care about being anti-racist as a company. Those all sound like big concepts, but they're actually quite easy to have baked into the fabric of who you are as a company. And if anybody was paying attention to the millennial generation, and for all the complaining I heard happen at all the industry meetings, Millennials that have worked with me for a very long time, I can tell you, are a lot more attracted to the industry because of the way I run things versus the way another management company would. I can tell you they all would have quit 10 times over by now if they worked for somebody else. When I have people on my team and we say, how do you want to engage your community with your job? People are like, what do you mean? I mean, and like, do you care about dogs? Do you want to, you know, do you want to go volunteer at the shelter? Like, that's how you engage in the city that we're living in and serve it as part of your job. And being in a mission-driven company as a property management company makes us an outlier when in fact, I think if we all looked at property management from an empathic and values-based lens, we would say, wait, one of the most important jobs in the world is to help take care of people while they're in their homes. I come from a nonprofit background and that is why I like what I do because making sure people are well and all right and safe and dignified housing is a really important job and my team members view it that way. They're not thinking about, you know, they're— and they're able to let that anchor them when the work gets really hard. Because I just— because I care about the community and I feel like I've got, you know, a lot of people really interested and fascinated with how we do things and people that are loyal to us, like, I will get cranky, crazy residents just like anybody else does, right? And we get clients who just don't understand your value, or they think, you know, they're just misaligned, or they don't have the right expectations. Like, it will never be immune to that. But how do you keep people happy in their jobs when they're being, you know, when they're dealing with really stressful situations? And I think being mission-driven, like, keeps my talent feeling like their work is important. And, you know, the industry at large has a 36% annual turnover rate. And I had 2 people leave during the Great Resignation.

2. Wow.

2.

Out of like 75 or something like that.

Yeah, I mean, and those were folks that they're like, OK, I don't want to be in this industry forever. It's time for me to learn something new, which totally makes sense, right? And we don't expect people to come to the job and stay forever, but we do expect that if they want to learn, grow, and feel like they're making a contribution contribution that we're a great workplace for that.

That's fantastic. Thank you so much for sharing that. And it's easy to see why your leadership style would inspire that, like, fierce loyalty, because you've come out with a really clear position. And that is, you know, it's different, but I think that's almost— I mean, even if it wasn't different, the fact that it's clearly articulated it's spoken from a place of authenticity and fearlessness, people are like, oh yes. And for the people who, who don't resonate with those values, they're going to bounce early, right? Which is probably a good thing. They're not even going to apply. But for the people who do, they're like, okay, yes, like this is, this is for me. I, I can make a difference here. I can work here and feel moral. So that's, that's, that's really cool. I think if I'm remembering right, one of your businesses is employee-owned. I think it's the co-op or the association. And I'm fascinated by this. There's very few, if any, other employee-owned management companies. I don't know of any. How's that been going? I think it's been going for a while now. I think I remember hearing about it right when you were kind of kicking it off. It's been a few years. I'd love to maybe hear about how that's played out in the real world in terms of employees buying in or leaving or like how, you know, how all that all works?

Yeah, I mean, when, when Nest, which is the, our, our legacy brand is Nest DC, which does the full service turnkey property management, boutique property management. We focus on high quality homes, stylish spaces that people are really attracted to. And, and that, that was a, you know, a big win and a, and the right bet to make in terms of how we built the brand and the visibility for the brand. And when we hit 200 units, I mean, like any entrepreneur, I invested a lot of time and energy in growing the company before taking a salary. And so I worked 2 full-time jobs for 4 years before I took a salary.

Oh my God.

And I would, instead of taking a salary, I would just keep hiring staff because I knew if I'm out there promising a high-quality service and something that completely blew everybody else out of the water, then I needed staff to deliver on that promise. And so paying myself a salary was going to come at the expense and it was going to cannibalize the business. And so there was a point at which it became clear that the business was going to be sustainable. We hit that sort of magical 200-unit mark. And I was really excited about the fact that, oh, at least for the foreseeable future, I don't need to get a traditional job again. This is kind of it. It's like the entrepreneurial dream. I can make a living doing something that I'm the boss of. And then I kind of immediately felt really bummed out because none of the other people in the company were owners. And so I was like, well, this isn't as enjoyable if it just benefits me. And I think for folks that know me well, they know that I don't really like anything if it just benefits me. What's the fun of that? I like sharing. Generosity is really kind of my number one value as a human being. And so I thought, well, I want to share this success because I don't have a company unless I have extraordinarily talented, thoughtful, and smart team members. And I can tell you that the opportunity that I've had personally and the opportunities that the company has had have been not my doing, but the doing of a really, really smart and very sophisticated staff that has stuck with me for a long time and figured out bigger, better, smarter, faster ways to do the work to a greater standard than I could have even imagined. I can't do property management anymore because my job is to dream up new things and then chase after them while other people run the company. Be much better than I ever would.

My dream is to forget my login for Buildium. The day that happens, I've made it.

I've forgotten my ability to get into AppFolio anymore. I've lost my passwords and I decided not to reset them because that information actually isn't— if I'm tinkering in AppFolio, I should be fired. I have no business being in there. I add no value. And unless it's just like to self-serve and get a phone number, I have no business being in that ecosystem. It's not where my time will be best spent, and it's actually a disservice to my staff to meddle on that level. So I not only have that, and then I had too many logins anyway. I was like, this is too confusing, I have to move on. But, you know, I did have a staff that like, they really went all in for me and gave me that chance to, to really follow this entrepreneurial journey and path that I think is very intuitive and the right place for me to be and for me to be thriving. And, you know, I wanted them to enjoy something more than a good paycheck. I wanted them to experience the thrill of ownership. And so we decided to incorporate another company, Roost DC, which, which today is about 7 years old. And there's someone else in charge of that company now. I'm a 30% owner of Roost DC. Roost manages condo associations and cooperatives in Washington, DC, and we manage about 120 different buildings. Everybody that works for me works for Flock and Roost is not an exception to that, but every Flock staff member is entitled to become an owner of Roost. So we're set up as an LLC, we're not set up as an ESOP. There were a lot of reasons for that and it's a complex journey and I certainly would've made some different choices. I think first of all, I would've had better legal counsel when we put together the operating agreements, but things have smoothed out quite a bit now, which isn't to say that they were bumpy. I think in terms of the lessons that we've learned, we've grown from and that's been a good thing. And Roost continues to thrive and differentiate itself in the same way that Nest did in an industry that I will say, I will admit with humility, is much harder than residential property management. HOA management, condo management is way, way harder. You have to earn all the dollars, which seems really unfair. I mean, there's a lot of passive revenue that's available if you have properties that are in great shape on the turnkey management side, then The work doesn't need to be that complex. To do it proactively and well, sure, you need to staff that, but there are a lot of properties at any given time. There shouldn't be more than 10% of your portfolio in play, which means the other 90% is just doing what it needs to do and you have some activities, but they're not drawing staff time every month. The opposite is true of the condo management world and the association management world. There's always something you can be doing and there's always the expectation that you're working on their building full-time, all the time, 24 pay even if it's a 10-unit building. So there's very misaligned expectations. It's a harder business for sure, but it continues to be employee-owned. I think we have 19 employee owners of that business right now. And everybody, I can tell you it wasn't a business decision necessarily as much as it was a decision to create more opportunity and to share the fruits of all that labor, not just mine. And so I've been really proud to have Roost be what I think is the only employee-owned property management company in the country. I still haven't heard of one. I tend to like to do things that nobody else has done just to confuse everybody. But yeah, it was— I mean, it wasn't at that time when I made that decision, it was quite easily one of my proudest professional moments. I've had some more of those now, which I'm also excited about, but the first person I hired for that company is still on staff and an owner, which feels really good.

I want to take a moment and thank the FoundGen for sponsoring this episode. Some of you may know James Shulman from Twitter. He's pretty active on there and he's a great follow if you're not following him already. James and I met through Twitter about a year ago, and I've been working with James and his team at the FoundGen for just about a year. So you can think of them as a fractional CMO and marketing department. So James and his team handle a ton of marketing work for our business. Let me just give you some of the capabilities that they have, and this is all the work that they're doing for us. They're handling content creation, so they're writing in-depth in-depth detailed articles that get published through our email newsletter as well as our website on our blog. And you can check that out at rlpmg.com/blog if you want to get an example of content that they write. So it's not just fluff, you know, someone Googled for a few minutes and wrote a few sentences and fleshed out into a full article. These are legitimate content pieces that I feel comfortable publishing on my website. They also handle social media posting, podcast publishing, email marketing, which I just mentioned, webinars, any graphic and design work that we need. They're really just a full marketing department for us. Knowing that my marketing is being handled by professionals takes a huge weight off my back. It lets me focus on the business instead of working in the business. Contact the Found Gen and they will conduct a marketing audit for your business. You can learn more at thefoundgen.com. Now let's get back to it, and thanks for sponsoring the show. The employee owners, are they drawing quarterly dividends, year-end profit sharing? How does that all work out in practice?

There's, there's no profit sharing and there's no distribution requirement unless there's a tax event that increases their tax liability, in which case we'll make distributions to cover the tax bills. Otherwise, it's basically more or less a passive investment in which when they have an exit event, then they will cash out based on the valuation at that time. We haven't had anyone leave without feeling like they'd made a good decision. That's awesome. And we've had a few people that left that company, which is a natural thing to do. And they were like, oh my gosh, I've invested in this and now I have a little bit of a nest egg that I didn't— Nice. I wouldn't have otherwise had. Nice.

Right?

Yeah. That's the best guess. And knowing that that was a possibility and that work that we did led to that outcome, I mean, that could have been my money. All of Roost could have been mine. It could have been profit. And I think the value of that decision outweighed the loss of potential profit because I think overall, the long game will be the companies will be more profitable because of the value system we used in creating Roost.

100%. And I think the— there's a value that even extends beyond that in that you're, you're instilling again fierce loyalty in the folks that got to participate and then their networks. And, you know, we're having a conversation about it right now. And yeah, very, very cool stuff. I want to transition now to talk a little bit about how you're running these I think I counted basically 5 companies. I know you run on EOS, and, and we do too. We're big fans of, of EOS. So are these companies all individually running their own vision traction organizer, have their own integrators, have their own quarterly rocks planning, annual rocks planning? So are you attending like 5 annual 2-day off-site rocks planning sessions, or how's that actually working?

We use Traction at our senior level, and then we use a lot of components of Traction throughout the different departments and divisions of the company. And directors are required to have rocks and things, and they use the level 10 meetings and things like that. I participate at the highest level of the company at this point, and Grace Langham is the president of Flock. She's through and through an integrator, and I'm through and through the visionary. I think we can both cross over a little 10% on either side, but she's just really good at taking a lot of the things that I'll dream up and operationalizing them and creating value systems and tools that allow us to implement. It's kind of incredible that we were just lucked into this partnership and we worked together for a long time, 10 years. So I participate. We have a Flock leadership team. There are 7 people on that team, and then we have a secondary leadership team that includes all of my vice presidents and they report up to me. So I can basically get a read on what's going on throughout the different family of companies. So that's sort of the Flock family of companies. I'm on that Flock leadership team and I can share that. And then obviously Birdwatch, we don't use EOS because we'll outgrow it really quickly. Frankly, it's a really good model for a smaller format company, which Flock is. Birdwatch, the growth trajectory for that is 10x what Flock is intending to be. So the model is just going to be different. And I have another business partner for that company. And so we'll use a different organizational tool for that. So some of that is just unfolding. And then so between Birdwatch and Flock, and then I do have the philanthropy that I I'm in charge of technically. And yes, that takes time too. So that's where I spend the bulk of my time, on those three things.

Okay, got it. So for Flock, Grace, your integrator is sort of over all of those companies or divisions. There's not like a separate leadership team for each one.

No, I mean, we'll have team leads. So, you know, Roost has kind of its own senior management team within Roost, and Nest has the same, but there's a lot of crossover. And in terms of macro oversight, that's Grace's responsibility. And then they're sort of reporting out to me, and then my job is to help create strategy, vision, relationships, business development tools, and to sort of guide some of the problem solving in them and the growth potential for the businesses is where I spend most of my time at this point.

I want to give a shout out to the fireside chat you did for PM Grow last year, 2021, you and Grace did. And for anyone who's listening and you're resonating at all with what Lisa's talking about, I highly encourage you to go seek that out because it was a really interesting discussion about the dynamics between the visionary and the integrator. And it set me on a path after watching that to hiring an integrator. Like, I always kind of knew that I was going to go that way. And right around that same time, my business partner who was basically the integrator in our company. He and I purchased another small business. He went off to run that company. And so I was basically left without any semblance of an integrator. So I want to thank you for that because I hired my integrator in January and she is doing amazingly well. I'm in the middle of a one-year, uh, or one-month kind of mini sabbatical right now. She's running the whole company. I'm completely out of the loop. I literally have no idea what's happening at my business right now. So I just wanted to mention that for anyone who hasn't seen that. It's really, really great discussion that it helped me visualize how things work in practice between a visionary and an integrator. So that's a really great piece of content for those who may not have seen it.

I did so many present— presentations virtually for so long that I'm like, does anybody ever look at these things? I don't know. Glad somebody was.

Yeah, I was watching. Yeah, I think so. Those PM Grow videos, they're not publicly available, but you can purchase them from the PM Grow Summit, I believe. So they are, they are there. I'd love for you to share maybe just a little bit about how the, the division of work between you and Grace is, is playing out today, the division between the CEO and the president. Um, how, how does that look? Here in 2022?

Things tend to move quickly and will kind of unexpectedly evolve over time for our family of companies. There's sort of always something going on. So it's an interesting time for you to ask that question. Grace had a baby, which I'm thrilled for, and she went on family leave for 4 months. And before she left, she said, "I think it's best if you just try and just keep the status quo." while I'm out. She literally said to me, I would like to not come back to another bird. Because I just, you know, she's like, obviously if you want another bird, that's great. But I think just trying to keep things moving is good. Because I obviously needed to take a pretty big step in a pretty big way into her seat while she took that time, really important time away from work. And then she came back, and not only did we have another bird, we were in full partnership mode with Birdwatch. We'd incorporated. We had a whole C corp set up. We had a legal team. It was just like—

Fantastic.

There was sharing of agency.

Well, that'll teach her to go have a baby.

Yeah. She was like, oh my God, what happened? What happened while I was gone. The bird was the Crane Consulting. So yeah, I told you it only cost me $300 for the logo. And that wasn't launching a new sort of discrete program. It was fine. She was fine with that, that bird. And the bird is really good looking. So I think who could have a problem with that bird? But Birdwatch was pretty radical, right? I mean, suddenly we went from entertaining the idea of Birdwatch and incubating that home management service within the Flock family of companies to me assigning all of those Birdwatch assets to the C corp, developing an entirely new partnership, thinking about raising venture capital. It was all of a sudden from— we were going a million miles an hour out of nowhere. I have a very, very, very, very dynamic, smart, experienced, skilled business partner, and that partnership sort of started to emerge a bit before Grace left, but really codified when she was out. And suddenly we're thinking about who from the company is going to be moving into the Birdwatch environment. And she's like, what just happened? This is actually radically different. And I'm like, it's been basically spending 200% of my time on all the things, right? And also, I think she was just disoriented. I don't know if you have kids, but I have a kid, and when you have a kid, it's disorienting. Yeah, it is weird. I don't know how to do things the way I did them before this thing came into my life, and I had to make sure that— What we did was we just completely redesigned her job to accommodate the shift in where we were heading as a family of companies, which included actually giving her a reduced work schedule so she could spend more time with her son. So how do you meet— how do you create a reduced work schedule for someone while amplifying their role and letting another key player spend a lot more of their time on something that's not day-to-day? And it was great, actually. The exercise of doing that really forced us to be more efficient. It forced us to cut out some things we were doing that weren't effective. It forced us to move things off of our plates and onto other people's plates, which gave them growth opportunities. And it just actually inspired a lot of re— adjustment and repositioning things to the advantage of the whole. And I think there's always this sort of sense of panic like, oh, somebody's going to be gone for 3 months. And we're like, this is great. We're going to have to figure out how we can think through this person's job so they're always highest and best. Grace and I, because we grew up with this company, are very naturally driven to handle small things and support the team. We're both servant leaders and we believe in that model, but there's a difference between servant leadership and doing things for people that they should really just do for themselves. And when we're getting into these habits of supporting people's work, I'm like, no, no, we support you, but you still have to do the work. And so lightening up this sort of like, we're coming up behind you to see what you need. And we actually shouldn't need to do that. We should be coaching, mentoring, supporting, making sure you have the tools you need, but we shouldn't be the tool ourselves. And so I think reorienting ourselves to that new kind of work style, let us be a lot more streamlined. And I think she will be able to take on a more substantial role in Flock and take over a lot of what I had been doing with me really being kind of more development-oriented, inspirational culture while she's just making sure everything's running in a pretty sophisticated way to free me up to make sure that the birdwatch opportunity doesn't do anything but Soar.

I love that. Thank you for sharing those details. I'm a big believer in the power of forcing functions, which it sounds like is what happened there. My friend Jordan talks about how anytime he's tried to free up time in order to go start something new, it never works. Like he never quite gets there. But what has worked for him is when he finds something so enticing that he simply couldn't not do it. Then magically the time appeared and he was able to carve away tasks. And it sounds like that's a similar dynamic to what happened here. So there's definitely something there of don't wait for like the right time or try to manually free up the time because it's the old thing, tasks expand to fill up the time allotted to them. Just make it happen and you'll find a way. I love that. I want to close with a question about marketing. So you've obviously been very successful in marketing your business, and we've talked about the branding aspect of that. I'd love to hear a little bit about what you would suggest for a smaller property management company, maybe a few hundred doors, who was looking to grow. And, you know, with marketing, I mean, you Google like property management marketing, there's billions of results, there's 15 million different companies promising results.. You can spend $30, you can spend $300,000. Maybe just a few words on what's worked for you or what you would suggest in 2022 to a smaller firm who, who really looks at what you've built and is like, hey, I want to start moving that direction.

We've never really done traditional marketing, to be honest, except in the last year and a half. And because the pandemic just shifted things a bit. Honestly, you know, we have over 5,000 Facebook followers, which I think is highly unusual for a property management company, in part because we don't talk about property management. Offer what people are, are, are looking for, right? I think what we became was a trusted source of information about what's going on in the city. And so if people keep coming back to you, then that brand recognition starts to unfold. Rather than buying tables in an event or taking out ads, what we did was we actually sponsored organizations that we supported and we would volunteer for them. And so we'd show up and we'd volunteer from anything you can imagine, like sorting clothes out, doing trash walks, helping people build playgrounds, doing landscape installations for nonprofits, hosting casino nights. I mean, you can think of almost anything and we've done it. And then we just documented and posted on Facebook. And showing up is actually the biggest part of visibility and actually Partnering with and supporting other organizations that care about what you're doing and contributing to community is one of the best ways to build authentic enthusiasm for what you're doing, where people want to mention you. They're like, oh, there's a great company that does fill in the blank. You should work with them because they care about fill in the blank. That's a long game, right? You're not going to have instant results. You're not going to have a dashboard of your KPIs and what worked well and didn't work well. But in terms of building reputation, brand credibility, trust, community alignment, that, that takes time and relationship building. So the best thing that you can do is be out there talking about your business and why it's important to the community and why, you know, you're creating jobs and doing all these things are a net benefit for, for the, the, the area that you're serving. We'll start to— you'll start to show up more than you think you will. Go to networking events, go and meet, you know, if like where are you What are your pipelines? If you're not a real estate agent, that's a competitive advantage. So if the rest of the property management companies in your area are doing sales at the same time, if you're only doing property management, then every single real estate agent who isn't doing property management should like you quite a bit. One of our early decisions, which I will always feel grateful for, or maybe I'm— maybe instead of feeling grateful for it, I feel smart for making the decision never to do sales. In DC, it's like, I believe that the real estate agent is the state bird, and there are so many of them that I didn't feel like competing in a heavily competitive sort of field was really where we were going to make a name for ourselves. And so by deciding early that we weren't going to pursue that type of business, we pretty much locked down most of the management, or most of the real estate agents in the city will refer to us because we're not competition. I mean, who wants to hand business to their competition? And that's actually what a lot of real estate agents would end up doing if they sent to any of the other management companies in the city because they all do sales. We're the only ones that don't. So think about what makes you different from your competition. I had a real estate agent recently who's great, but every few months or so she's like, "We should have an exclusive partnership." And she had 5 other ideas and she's a high-profile, high-performing real estate agent in the city. And I said, okay, well, I'm going to just be really open with you. I'm not going to have an exclusive relationship to you so that you'll send me your leads because who else are you going to send your leads to? And she was like, okay, that's fine. That's fair. I don't have anybody else to send my leads to. And so I was like, I'll talk to you about other things, but this has no advantage to me. And she's like, okay, good point. Right? So if you make yourself the best, then be the best and be the only choice in the community. And part of that is just building your reputation, being confident. Talking to people.

Thank you. Yeah, that's, that's really helpful. Thank you for sharing. I, there's a few different really great nuggets in there that if, if, if you were listening carefully, I think you could, you know, take away from that. So thank you again, Lisa. I think I'm going to wrap it here. I really appreciate your time today. And this has been a really fun discussion. For anyone who wanted to follow your work and learn more about what you're doing, where could they do that?

You can go to MeetLisaWise.com.

Perfect.

MeetLisaWise.com.

We'll put that in the show notes. Thank you again, Lisa, and have a great week.

Thank you.

Thank you for listening to Owner Occupied. I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, PeterLohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.