Process Masterclass with Wolfgang Croskey

Welcome back to Owner Occupied. I'm really excited today to have my friend Wolfgang Kroski on the show. Wolfgang is the CEO of Kroski Real Estate, located in Pittsburgh, California, not to be confused with Pittsburgh, Pennsylvania, which I definitely didn't think was the case for the first, like, 2 years I knew you. Definitely not true. Wolfgang is also the co-founder of the PM Systems Conference, which is a very unique and well-run conference in our space, and We'll ask him a little bit about that to share what makes that conference different. Wolf, if you would just maybe take 1 to 2 minutes and give a little bit of your backstory and what you're up to today, and then we'll dive right in.

Sure. So born and raised here in Pittsburgh, California. The family has been in real estate. I'm third generation, but that's not how I started my career. I graduated high school. I then served a mission for my church, finished college. Became a school teacher, then a school administrator, and decided, you know, this really isn't working, and decided to come to the family business and have been growing it. Married, have 6 kids, 3 boys, 3 girls, and just having a lot of fun on this entrepreneurial journey, building things, helping people, meeting great people, and it's just been, it's been fun.

Awesome. Well, that's super cool. Now, Wolf, You have become somewhat well-known in our industry for your systems and processes. And I think some people, they, they hear me talk and they see some of my stuff and they think I'm like the guy. No, I'm not the guy. Wolf is the guy who knows systems and processes and Zaps and automations. Um, he's who I learned from, which is why I'm so excited to have you on the show and introduce you to the broader audience. For those who may not already be familiar with you. Um, so we're gonna dive into some of that, but I want to know a little bit about like, how did you get so skilled at Zapier and LeadSimple and Process? And like, what was your journey? Is this something that came naturally for you? Was it driven by a pain that you had, or was just something that you always were fascinated with and tinkered with? Like, I'm just so interested because like, You don't automatically think, oh, teaching background, he's definitely going to be like the systems and process guy that I want to chat with. Right. But so how did we get here?

That's a great question because I get asked that a lot. And it took me a while to figure out how to answer that without sounding like I'm boasting. So growing up as a kid, tinkering, breaking things, fixing things, doing things. My dad was and still is a ham radio operator, which they naturally tinker and that always interested me. Then became a schoolteacher and was introduced to the work of Harry Wong, right? It's called First Days of School, and he talks about routines and procedures. And that really resonated with me, the concept of starting slow to then go fast. You get things situated, build out your systems, your processes, and then kind of things run autopilot.

What was the name of that? This is new to me.

Harry Wong, First Days of School. It's If you're in education and you haven't heard of Harry Wong, you haven't gone to enough professional development conferences. But what he taught, some people will mock and think that it's ridiculous because of the way that he presents. But the concepts and principles are absolutely not only foundational to managing a great classroom, it is foundational for building systems and processes. And—

Fascinating.

You pre-teach, you teach. You know, if you've ever tried to lead an initiative in your company and it's failed, It's probably because you didn't start slow. He started fast. And teaching, sales, and leadership are all really connected together. And so that resonated with me. And I just kind of naturally, it's like the Matrix. The language speaks to me. As far as the automation and the tech piece, I can honestly say I do not have a degree in technology. The only paid formal education I've had around computers were the required classes for teaching credential in California. And it just, it does come naturally to me. I love to tinker. I'm not afraid to push buttons because nothing's going to break. And I'm pretty much self-taught.

So when you were a teacher, when you were a teacher and an administrator, were you creating processes and checklists for your, for the folks who worked in the office and for the teachers and the faculty and like Were you driving them nuts with this?

Yes, checklists, little checklists were part of it because a lot of this tech wasn't around. There wasn't a Process Street. Asana, I think, towards the end of my teaching years was coming to fruition. So the kids actually like routine. That may sound— especially I did middle school, and you think—

I completely agree—

hormones and chaos, but they actually really like it. They thrive it, they desire it. And when you don't provide it, that's when you get a hot mess. So the kids liked it. The adults, uh, drove them crazy, especially those that lean more on the artistic side. You know, routines and procedures are not part of that mindset. And so did have teachers that just didn't like it, obviously.

Yeah, I believe that. I definitely think, you know, I've seen, I've got 2 kids. I know you've, you've got a few more than that. And I've observed that kids, they do love structure. They need like a home base to fall back on that they can leave and go explore and deviate from, but they need to come back to what they know and what's familiar and have, have an understanding of how the day is going to go, how the night's going to go. That doesn't mean it's every single time, but it's like something about that familiarity I feel like really is comforting and settling. And I think that's true for most adults too, whether they believe that about themselves or not. I think this is tied in with the discipline equals freedom thing. I'm forgetting who said that originally, but there's really something to this idea that a foundation of structure and order is like a platform from which you can launch into super creative or super exploratory phases or projects. If you don't have like a firm structure that you've built for yourself, you've got nothing to push off of to go far, if that makes any sense.

No, it does. I mean, you think about for us that live in the United States, you walk in, you flip the switch, like you just expect power, you expect light, you don't have to think about it. And because of that, freedom, you can then do great things. I turn on my computer, I expect it to not only work, but I expect it to be fast. I expect my internet to be fast. And when the internet is not just shut down, but I mean, it's just running slow, like, what the heck? You know, like, you can't handle it. You know, that's the level of comfort that we expect in the United States. And it's good overall. There are some downsides to having too much comfort. I— going back to your first question about how How'd you get into automation and all this? It's, I'm professionally lazy. Some may call it seeking hyper-efficiency, but I just look at why should I be doing this if there's gotta be some tech tool that can do it for me? Or why should only the big companies be able to have all this cool stuff? And for us, it started with RingCentral. And I wanted a phone system that press 1, press 2, professional audio, and you just keep going from there and there and there. And for me, it was being a small company that has all the same tools and skills that the big companies have.

We share that tendency toward laziness. I've known this about myself going all the way back to when I was a kid and then in my early career as an engineer, I was always looking for the shortcut, you know, the easy way to do things, or why should I have to do this over and over when I know it can be automated? I actually got into a lot of trouble at my engineering job because the technology we were working with, um, I did PLC programming, which is like control systems for huge industrial pieces of equipment. And the, the programming language that, that you use there is called ladder logic. And, um, the software where you're programming this ladder logic, it became more and more powerful over time. And so there was new features that became available that would allow us to save a lot of time when we were writing the software. And allow it to become much more efficient. And so I would dive into this stuff and I would rework the code and redo the ladder logic such that it would be like algorithmically generated and like all this cool stuff. And so I was all excited about this and I showed my boss and he's like, this is horrible, delete all of it. I was like, what are you talking about? And he's like, this code that we're writing, after we deploy it on site, it has to be maintained. By the maintenance workers and the folks who are already familiar with the equipment and the systems. And they know ladder logic. They don't know structured text. They don't know this other code that you're messing with. They don't know these custom blocks that you've created. So you need to dumb this way down and make it back to how it was and how it has been for like 20 years, which means a lot of manual work for me as the programmer. So as I've matured now as a human, as a leader, as a manager, I understand the wisdom in what my boss told me at that time, which is like, you need to design your systems for the end user. Oh, I think there's a lot of wisdom there that can be applied in property management too. We can get fancy and creative and crazy with the new tech and the new tools, but if your team can't use it, it's kind of useless. Or if they can't understand it, or even if they can't troubleshoot it and they're constantly calling you in That's not ideal either. So, um, but yeah, getting back to the lazy thing, I, I also credit that instinct with a lot of what I've been able to do with systems and processes is just sheer, sheer selfishness. Like I just don't want to do this over and over. So people think it's this amazing, crazy thing. Like it was so much work. I'm like, no, I did the work so I don't have to keep doing the work. It's like, it's like, so I can be lazy in the future.

Yeah, what used to get me in trouble in school was I saw— I can see the BS real quick, even as an adult. And in school, there's a lot of BS, busywork, diddos, handouts. And I just thought, we're just filling time here. And so I just, I'm not going to do it. And so, you know, that as a student, because in school it's about teachers control, sage on the stage, all that. And when a student pushes back, well, they're defiant or this or that. Few teachers that saw my capacity and tried to help me harness it in more positive ways. But yeah, I just, I could see the BS and I'm like, yeah, we're not— why are we doing this? What's the point? And my one son who has Down syndrome, he can see the BS very well. And he— I'm not going to— why are we doing— this is stupid. I'm not doing it. And it's fun seeing yourself in your kids.

I bet. Yeah. And we're going to return to what you took away from your teaching career and busy work and Sage on the Stage. I can see a lot of through lines with how you've set up the Systems Conference. So we're going to come back to that. I want to jump sort of down the stack a little bit and get into some details for the audience here. So what systems or automations are saving you and your team the most time at Cross Key Real Estate? I'd love to get one or two, like really cool processes or Zaps, something that maybe the audience could take away and implement in their business, or just something that's been a crazy time saver for you?

So I'm first going to give the warning that this is not sexy and not super complicated, and that's why it saves us so much time and money. You can build some really amazing things. We have some of that, but they are also the ones that tend to break more frequently because they're They're— and I think you said this— they're fragile because of edge cases, parsing data out of emails. So the best bang for the buck where I just— we don't even have to worry about it. Late rent, lease renewals, and move-in. Those three.

Back to basics, baby.

Yeah. A lot of traction. They happen every month. You know, some processes like, oh, this is great. Well, it only happens once a year. How do you know it works? Well, we're going to wait till the next cycle. It runs.

Yeah. Your 1099 process. Yeah.

Yeah. So late rent, lease renewals, and move-in have a lot of traction. Tools like LeadSimple now has the ability to pull in your property management data. So now late rent, it runs automatically based on certain conditions, dollar amount owed and day of the month. So it's just, it's running. Those three processes also have the bulk of the work is actually managing communications. Right? So on late rent, there's nothing I can do to force that tenant to pay rent. There's— my property manager can't do anything. But what I can do is collect information, communication, and pass it along to different parties. So let's, let's automate that flow, make it consistent. Owners, even though they yell at you, where's my rent? What am I paying you for? All that, they know it's out of your control. But what they want you to do is let them know that you have a plan of action. That you're consistent executing that plan, and that you're going to keep them in the loop. You do those 3 things, they're going to be fine. So automate that, and not so much automating the template, you know, templated email, but automate the launch of the process so it happens every single time consistently regardless of human need. You're going to be well above the majority of management companies. Lease renewals, Hey, what does the owner want to do? What does the tenant want to do? Let's combine them and let's, let's get something executed. On the move-in, I've seen a lot of move-in processes that have all these really long emails with all those details. Do you really think a tenant who's in the process of a major life change is reading all those emails? And people, well, I sent them an email, it had all the links and this and that. I'm like, they're not reading it. Send them videos that are under a minute. That's all they have time for. When you're in the process of a major life change, your brain functions differently. It's fight or flight, kind of those survival tactics. So processing details and all that, unless you've trained your brain, it's not there. It's, hey, are my kids going to be okay? Do we have the utilities on? How am I going to get my kid to school? All those pieces. Here comes this long email from a property manager with all these details and do all this. They're like, yeah, read it, archive, delete.

Yeah, well, let's— I want to zoom in on the rent collection process or the late rent process. And this is something that applies to anyone who owns or manages real estate. You don't have to be a third-party property manager to get value here. Something that I really want to start driving and sharing more of is that A lot of what us as third-party property managers have figured out, I don't feel like that's really trickled back to the self-managing landlords. Even the ones that I interact with on Twitter who I consider to be incredibly brilliant and forward-thinking and way ahead of me in many ways, I feel like they're not aware of or taking advantage of so many of the amazing processes and systems and automations that we as third-party managers have been forced to figure out just to stay afloat, right? So let's talk about like the late rent collection process. And I want to do something that Chris Powers does on his podcast. He does this so well where he puts himself in this scenario. So I'm a tenant at Kroski Real Estate and I'm, you know, it's as I record this, it's May. So let's talk about June. June 1st, rent is due, right? And let's say my rent is $1,000 a month and June 1st comes around. And I haven't paid rent. What can I expect as a resident? And talk me through it a little bit. So June 1, rent isn't paid. So now it's June 2nd. Does anything happen yet?

So actually, before June, you'll get a—

oh, we need to back up. Okay, go ahead.

Yeah, T-minus, uh, I think it's 5 days, uh, the— you'll get a message just saying, hey, you know, here's, uh, the charges that are posting to your account, rent's due, here's your payment options, right? Very Easy. I think it's no different than any other company that sends out bills or invoices.

It's just— this is an email.

Here's the charges. It is an email.

Okay. And is this generated by—

well, this is done by AppFolio.

Okay, got it. So no, this is just kind of basic property management software stuff. All right, got it.

Yeah. And I'm— as far as I know, most of the software solutions that a self-managing landlord would use have this capability.

Yeah, Buildium has something similar. Yep.

Yeah, why it's important is just in case there's a misunderstanding on charges, you posted the wrong charges, it gives everybody time to kind of clear that up. First of the month comes, you get your reminder that rent is due. Very friendly, no aggressive tactics, no threatening of evictions, just, hey, your rent is due, here's your payment options.

Still Appfolio?

This is Appfolio. Correct. The payment options are really important. If you only— if you interject a lot of friction on what it takes to pay rent, you are going to run into problems. So you want to make it easy for you, but also easy for the tenant. And there are a lot of options for a self-managing landlord now. There's eCash where they can go to a Walmart or a CVS and they can make a payment.

Buildium has something similar called Pay Near Me. We love referring residents to that.

I think it uses the same solutions.

Rails. Yeah.

Yeah. Provide options. You want the tenant to pay rent, make it easy for them to do that. They got enough friction as it is, so make it easy. But now comes the third of the month, and this is where we start to get into our process. So California is not very friendly to housing providers, so we have to go out of our way to show that we've done everything that we can to be amenable and work things out and give the tenant options. So we do have— we don't call it a grace period, but between the 1st and the 5th, you can pay without a late fee. That's kind of, I think, the norm in our market. But on the 3rd, we start the more aggressive reminders. They come via text and they come via email and they remind the tenant and they're customized or personalized. So it greets them by name. We don't put in dollar amounts because then you get into, you know, debt collection rules and all that. We just simply say, you know, your rent has been unpaid, please, you know, make arrangements to get it paid. On the 5th of the month, So we've done some messaging on the 3rd. By the 5th of the month, if rent has still not been paid, now we message the owner to let them know because, okay, you know, kind of the, the time frame that we have, and they start to get antsy. So to avoid all the phone calls, hey, did my tenant pay rent? Where's my money? We message them proactively and let them know, hey, it's the 5th, we've not received rent. These are the steps that we as a company are taking, and this is when you'll hear from us next. Because if you don't include that last piece, they're going to call every day, hey, so did they pay? Did they pay? And there are owners that they're not strapped, but they act strapped for cash. I don't know how else to put it. They got money and a missed rent payment is going to kill them, but they still act like it's life or death.

All right, we got to pause here because this is some gold, uh, even for me. So You send a bunch of reminders prior to the day of, a few days after, and then 5 days after, which I think is, you know, I'm sure that drives— I'm sure that increases your collections rate. And that's, that's the, that's the old triple win because that's good for the resident. They're paying without a late fee. That's good for you because it's one less thing you have to worry about. It's good for the owner because they get paid on time. So I also want to highlight how You notify the property owner on the 5th. That's something we do not do, like, at all. Like, we, we don't even tell our owners when we file an eviction. So this is very different from how we do things. And I want to talk about it for a second. So you send the owner an email on the 5th. Now, is that through AppFolio or is this something that's automated in LeadSimple?

That's automated through LeadSimple.

Okay.

Yeah. So starting on the 3rd, that we're now—

Kicks off a process.

And yes.

Yeah. All right. So this, this process, I want to highlight this process kicks off automatically. So someone didn't have to go in on the 3rd and pull up a list and manually kick off one by one by one. This is like the system is automatically looking for, it's tracking delinquent rent amounts and making sure that they're not already in an eviction process or something like that. There's a bunch of stuff, smart stuff happening on the backend here. So kicks off the process and it's sending out these emails automatically. So it's automatically emailing the owner. It's automatically emailing the resident. So when you notify the owner, you're giving them information and then you're telling them when they can expect to hear from you next. And that's like really interesting. That's not something that's part of our workflow, but I can see how powerful that is as an idea, as like a thought technology, which is that when you communicate with a property owner, if you don't want them to reply, tell them when they can expect to hear from you next. It's like a setting expectations thing. Okay, I love this so far.

And it also, let's face it, housing providers don't need us. I would argue we're a luxury. We're not a legal, well, at least in our states, I'm not aware of any state that legally requires you to use a third party. So we're a luxury. Because they hire us, they now have the freedom, going back to that having structure, they now have the freedom to do other things. I want to provide peace of mind. And one thing I've learned in this industry is you do not mess with other people's money. That's kind of— my dad always says real estate's not a profession, it's a street game. And when it comes to people's money and money in general, people act differently. They could be the nicest person in the world, great to do, but all of a sudden money is involved, they snap, you know, they switch. Completely agree. Yeah, we, and we have a communicate on that.

I feel like this is most obvious when a property owner has a vacancy that's gone past a few weeks, they become different people in a very real sense of the word. And I tell my team this all the time. They'll start, they'll start hooting and hollering about some property owner who's acting out of their mind. And the first thing I ask is, do they have a vacancy that's gone on for a while? 9 out of 10 times the answer is yes. And I say, okay, that's okay. That's not a problem. This person that you're dealing with right now is not the same person that we onboarded. And will and will not be until this property is leased. So I suggest you focus all your efforts on getting the property leased and then we can circle back and answer their accounting questions and concerns. In the meantime, you know, we need to obviously reassure them and communicate with them. But if you're going to try and engage in a back and forth with a property owner who has a 6-week vacancy, that's going nowhere fast. I can tell you that right now. So I definitely like— yeah, the thing I say sometimes is like, When you mix people, you've met people, real property, and money, who knows what's going to come out of that combination, which is what we deal with all day long. So this is great.

Absolutely. So yeah, so having that same expectation also sets us apart, right? We have a plan. People hire property management companies to solve the problem. So when we don't have a plan and we just come back to the owner with, well, what do you want us to do about it? Well, what the heck, what did they hire us for, right? So that value, if we're gonna charge a fee, we need to provide value. So we show that we have a plan and it's a plan that we feel works well. So it really cuts down on the amount of phantom phone calls that come in, people asking, owners asking for updates. So if we know at certain points, we know what they're gonna want. So just give it to them. They wanna know, Hey, what are you going to do to get the rent? They know that there's nothing that we can do honestly to force that rent money out of a tenant. They just want to know what is your plan and how are you executing it? So they get notified that. But each of these steps each day, the automation is checking, does a tenant still owe a balance on certain accounts? And if the answer is no, if it's— they're zeroed out, it automatically skips all this other stuff and goes to a stage that we call rent paid in full. Sends an email to the owner saying, hey, we successfully were able to collect rent. Once it clears, your money will be disbursed to you doing our normal way. Right. And so it's sometimes people build processes with all the steps, but they don't have logic in there. So it forces your team to kind of wade through, okay, which step applies, which one doesn't. And what you're actually training your team to do is cut corners and skip stuff. And that's when things actually fall apart because they're so used to, oh yeah, that doesn't apply, that doesn't apply, that doesn't apply, that they've mentally built this process. Well, occasionally they will have a situation where that one step does apply. So use logic to only put in front of your team, or if it's even just you, what you need to see at that specific time. What is the actual work I need to do right now for this specific situation? Don't give me all 800 steps that potentially could happen. Just what do I need right now for this situation? And that's how you'll get efficiencies, and you'll have systems that are more stable.

Robert Leonard: There's some deep wisdom being shared right here. A combination of what you've shared here in the last 5 to 10 minutes, I think, is a really interesting combination of psychological insights to what it means to be a property owner and what it means to be a resident and what it means to be an employee, combined with deep experience in the industry and having tried and messed up a lot of things. And I resonate with that deeply. Combined with technology, systems, and automation. And I want to highlight that because the systems and automation is kind of useless without the other stuff. Like, if you don't understand what you're trying to accomplish and why you're doing it, you could have the most powerful technology and automation in the world, and it's gonna get you to the wrong place faster, basically.

And there's people in our space right now that they offer— and this is not a slam on them. I've met some. They are great people, very smart, and they know the tech. But if you've not been in the trenches to some degree and understand all those other parts, it's really hard to build something for somebody.

And I want to confirm for the audience that neither Wolf nor I offer the service of building out these processes. So this is not a sales pitch. We don't do this work. I keep a list on my website of folks that do offer this work. I don't have anyone that I particularly endorse, but I try to keep a list of folks that, if you're interested, you can check that out on my website, peterlohmann.com. Okay, so along the lines of combining the tech with kind of deep knowledge about the industry and the customers, what policies did you have to put in place before you could really start to leverage this stuff? Something I've observed, and I'm on the record for being a huge fan of Jordan Moeller's quote around tech is downstream of process and process is downstream of policy. So share a little bit about the policies, how you think about setting up policies and how that impacts the technology and automation.

Yeah, that's a good question. I probably will break it into two buckets, one policies and one is company culture because they kind of, you know, go together. So, on the culture side, real quick, it's helping everybody to realize we're always looking to improve. We may change software multiple times a year. We may bring on a new tool, deal with it. We're looking for what's best. So, we need to be able to try things and we need to be able to fail as quickly as possible. Like, okay, let's try it. It's not working. It's creating more problems. Either scrap it, tweak it, whatever. I have learned very painfully that the best way to learn is by failing. Some of the biggest lessons I've learned is when I have failed. And if I didn't have that failure, I probably would have never learned that lesson. So trying to teach our team that as well. And there really is no such thing as breaking. You're like pushing a button. It's not going to, it's not going to launch the nuclear warhead. We don't do that. So what, what possibly could break? The worst thing that could happen is You send out probably an automated message to the wrong person at the wrong time. Yep. It's embarrassing. All that. Could they potentially sue you? I, you know, I don't know. But that's— we're not— you're not going to stop somebody's heart or you're not going to launch a nuclear warhead. So it's not life or death here. And then really looking at as a culture, when we bring in this new tech, is it really going to benefit the customer? Because there's a lot of bells and whistles and sexy items out there, but is it going to help the customer? So that's kind of the culture that we're trying to build around just tech and automations. And then policies, um, how to operate in a shared inbox, how do we report bugs and things that aren't breaking, and then the importance of accurate and timely data input. I help quite a few property managers and have helped other people, and I would say the majority of the time that something— the tech didn't work when we really drilled down, it was a data entry issue. Either there was a typo, something put in the wrong field, or the data that we needed was put in after it should have been there. And so that actually triggered the automation late. So that's been something that we've worked on, how we've implemented that. So like on the shared inbox, those policies, we have kind of a hierarchy on who's allowed to go into the main inbox and then kind of play quarterback and divvy out messages. We also don't allow cherry picking. If you're going to go in the inbox, you got to clear it out. Don't hunt and peck for just your items. Get them cleared out. For reporting bugs, we kind of— I developed this when I was in school, but it was asked to before me because it's, hey, Wolf, this is broken, right? And I'm just running around. So I required the students ask two other classmates if they can help you before you ask me. So trying to get staff to ask peers, you know, other staff members, hey, this isn't working, you know, before, because a lot of times people think, oh, it's a bug. No, it's not. It's user error or something like that.

So institute ask to before me.

Interesting. Yeah. Yeah. And I actually— it was A to B for me. And I actually had a picture of a bee because, you know, it's middle school. We still got to keep it kind of cute. And then the last one is the importance of keeping information updated timely and accurately because a lot of your automations require— well, actually, all automations require a trigger, but most of those triggers are either inputting some data, updating the field, or moving, you know, to a new stage. And then when you do that late, that all the other tasks that come after that, guess what, they are then scheduled late. So we would see this like on the listing side. Our listing agent would say, what, the owner just got this message? We already did that a week ago. Okay, well, let's look back. Well, yeah, it's because so-and-so marked this part done yesterday and that's why it happened. We got it. We got to stay on this. So what we've learned instead of policy is our boots on the ground, people out in the field, they're not responsible for processes. Our remote team members are because they're in front of the computer. That's their whole time. They can update things more timely. But making somebody out in the field responsible for updating and being responsible for a process just doesn't work.

Those are some great insights. And I want to return for a minute to the late rent example because I think this can really put a point on the importance of policy. So let's say that you had a property owner who had a duplex and they had been self-managing for a number of years and there was tenants already in place and you onboard the property and the existing leases were month to month and the owner says, Hey, I'd love to have you renew them onto a 1-year lease. You're like, great, no problem. And now the owner says, by the way, these residents, I've always allowed them to pay late, as late as the 10th with no late fee. So what I'd like is for you to modify your lease to allow that. So if a property owner comes to you and requests that, and this is not uncommon, as anyone who's been in this business knows, this is typical. Tell me how you would address that if you allow it, if you wouldn't allow it, you know.

2 years ago, we would not have allowed it because the tech didn't— the tech that was available was very black and white and you needed to do things in batch. So no, in order for us to guarantee these results, it's got to fit into the conditions we set to run things as a batch. Now, with the tech, conditional logic and other things, We can do that. The part that is where I would give pause is it's a slippery slope. They want to make that change. What's the next change they're going to want to make? So I wouldn't say no to that because of a tech issue. I would say no to that because of a slippery slope issue. But let's say they have a whole bunch of doors. You know, there's some other circumstances. Our tech and our processes can handle variables like that because you can set different rules and conditions. So the tech and what we've built can absolutely handle that, that variable. I'd just be more concerned about, well, what's the next carve-out that they want? And then all of a sudden we've got 800 carve-outs for this, this particular owner, and now things are really getting cattywampus.

Yeah, you're really setting a precedent when you allow an owner to dictate internal process that way. Um, that's interesting you mentioned that the tech could handle that now, and I'm, I'm thinking through what that would look like. And I can see how that would work because you can set the due date in the property management software and then your workflow software, like for us is LeadSimple, is pulling in like the delinquent rent variable, not necessarily like triggering for all properties on the 5th who haven't paid rent yet, right? It's actually looking at, is there actually late rent or not? So that's interesting. And it's something that I think is one of the hardest things to come to grips with as a professional property manager is, Where do you give and where do you hold firm and how do you communicate this? I like the way you phrased it, which is that we can't guarantee results unless— I forget exactly what you said, something about we can't guarantee results unless you do it this way or—

Yeah. Why did this housing provider hire you? They didn't hire you because of your logo, your colors. They may have hired you because, well, my friend said you were good, They hired you because somehow you convinced them the results you produce meets their needs. Well, the only way you can guarantee those results is— well, the results are because your policies and also the processes that you have. So by really having that nailed down, you can say, yeah, I mean, I, I can guarantee an owner that our company, Bruce Cross Real Estate, on the 3rd of the month, every single time, regardless of Saturday, Sunday, the whole office literally could have COVID. I can guarantee you that process is going to start and the first couple of steps in that process are automated. So it doesn't matter. I can guarantee you, Mr. and Mrs. Owner, that lease renewals at 103 days before lease expiration, our process starts. I can guarantee you that. So without that tech, I may have the best of intentions. I may really want that. "But because of the human element, I cannot guarantee it." So that's what people want. They want the outcome.

Robert Leonard: That's what they're hiring you for. And sometimes you have to save people from themselves. They have these ideas. One of the challenges I think about property management as a business is that it's a line of work that people think or actually can do themselves. We're competing with our own customers in a way that Like I was talking with a guy the other day and he's like, yeah, my neighbor who has the biggest house in the whole neighborhood, he cleans out septic tanks. He owns a company that will come in and service your septic tank. And I was like, I love this. I love this business because no property owner is going to do that themselves. It's not going to happen. They're not going to go rent the truck and learn how to do it and get filthy and maybe do it wrong. Right? So it's like, It's one of those things is when you need it, you need it. You absolutely need it when your septic tank is full and you can't do it yourself. So that's like a perfect business, you know, talk about a dirty job or sweaty startup. Um, property management is one of those things where they kind of can do it themselves, and a lot of people do, and there's a lot of resources to help folks do it themselves. So that makes it challenging for us because our customers have ideas about how we should do things. I don't go to the septic tank guy and say, "No, I think you should put the pipe here, and I think you should run this motor a little faster, a little slower, the pump." I don't know anything about it because I've never tried to do it. But a guy who's self-managed for 2 years, now he thinks he knows the right way to deal with tenants and all this other stuff. So I think it's a unique challenge in this industry. It makes it hard to convey to our customers, the property owners, why we do things the way we do it because their lived experience may contradict what we know to be true. They may be thinking, "Well, I've managed this duplex for 4 years and I've always accepted rent on the 10th and I've never had an issue." And meanwhile, I'm thinking, "Dude, I've managed 700 doors for 10 years. Your experience is worthless," basically is what I want to say. But you can't communicate it that way. So yeah, I think you're probably— I'm not good at communicating with property owners around these topics because I just say what I think and it comes out wrong. But I feel like you've probably got some great wording around these things. Yeah.

I mean, it's, again, failing and then learning from your failures. I think it comes down to being confident. If you're confident in your policies and your processes, you can look an owner in the eye and tell them exactly how it is. And whether they sign up or not, you're confident. You know that if they don't sign up, they'll probably be back or whatever. A lot of times when people are afraid to talk to an owner, they're not confident. Why are they not confident? Because they know that they're just kind of winging it. Maybe they have a few processes, but overall, they know that their ship is not solid. And because of that, they don't feel confident. But when you have a rock-solid process, you can go into any storm and you're going to come out. You may come out a little waterlogged and beat up, but your ship's not going to sink. And so, The time, and I think this is where people, everybody wants the tech, they want the automation, but I'm telling you right now, the best investment you can make in your business is building out processes. And you got to roll up your sleeves. It's going to take time. It's not something that you should outsource because then that's that person's company. It's not your company. So spend that time, make that investment. The tech part will actually come pretty quick and pretty easy.

Love it. Let's pause on systems and process for a minute. I don't want to overdo that because I know you and I could probably talk about that for many hours and, and have done so. Yeah. Um, so you, you know, Wolf, you've become pretty well known in our industry. Um, you, you move in a lot of circles and people generally, if you, you know, walk around a conference, people seem to know who you are. I'd love to hear about how that happened for you. Was this something you set out do? Is this a result of a specific appearance or a talk somewhere that you gave? Like, how did it come to be that folks are turning to you in these areas?

I think if I had to trace it back for on the property management side, I can't remember if it was either Todd Breen or Candice of SD Real Estate in Benicia, but those two were right around the same time. So I'm gonna say it was Todd Breen first. That saw— and he's out of Florida— saw things that I was doing online that was sharing in the Facebook groups. And so he asked me, hey, would you like to be part of a panel at a NARPM Broker Owner? Uh, what's NARPM Broker Owner? And he explained to me, and I was like, okay. So my first NARPM event ever was being a panelist at Broker Owner. Wow. And, uh, had— I forget everybody that was on that, uh, panel. I believe, uh, Sense of All was on there, a couple others, and like really smart people, and we were talking about tech and automation in our tech stack.

Do you know what year this was?

Uh, I don't.

Pre-COVID?

Look it up. It definitely was pre-COVID. If I had to guess, I would say it was 2016, 2017.

Oh, okay, so quite a while ago.

Yeah, maybe. Yeah, that was it. And then I think after that, uh, Candace was like, hey, 'Have you ever thought about offering a class for money?' 'No, I did public education and we worked for free, but okay.' And she says, 'Well, you could host it in my office. I'll help market it.' And she said, 'What would you charge?' And I was like, 'I don't know. I honestly, I don't know what I'm worth.' And so, I honestly, I don't remember what we came across, but she had, there's a beautiful office down on the water that she set up. Lunch and it was great. And we had probably like 30 people there and met some really nice people, made friends, Keith Becker, Susan Golding, Michelle down in LA. And from there, people are like, you know, Wolf, you ought to do more of this. And I'm like, yeah, I don't know. Then it was Paul Kinkowski was like, hey, I've heard about you, saw some of your stuff. Would you like to be a speaker at the Systems Conference? I was like, "All right." And he's like, "Look, we don't do it like NARPM. We actually will pay you. We pay for your hotel and we'll reimburse you for your flight." And I was like, "Hey, why not? Let's do it." And just kind of went from there. Matt Trangale asked me to do something with him with Better Who with Jay. Did that for a little bit. And then the big one for me was the biggest compliment was Jordan Waila and Chris Percumpas at the Systems Conference, pulled me aside and had a great conversation, but basically asked me if I would like to help with LeadSimple, play kind of a role there. And I was like, really? I was like, okay. I said, out of all the people you could ask, me? And so just kind of went from there. So it's definitely not something that I've tried to, you know, build a brand around. It just kind of fell into it. I do think One of the talents that I've been blessed with is being able to break things down and explain it to people and teach them. And so I try to use that in any circle that I'm in to help people. And so I think that because of that talent, it resonates with people. They understand. And so it goes well. I have good dad jokes too, so that helps.

That's a great, that's a great story or a great sort of path that you've taken. And, um, to close the loop, that really was how we met, was through, through the LeadSimple work that we're doing together. Because I didn't know you very well, or hardly at all honestly, prior to, um, prior to about, I don't know when, about a year ago I think is when we, you and I maybe first started chatting.

Put us on a panel and that's, we were on that.

Yeah, so that it's been fun getting to know you and, you know, finding out where we're similar and where we're different. And you're in California, which is super different from Ohio in terms of what it takes to deal with residents and regulation, things like that. So you've actually had to process your way around quite a bit more of red tape than we have. You were incredulous, but to this day, we don't have a rent collection process at all. We literally just We do send a statement that goes through billing automatically, and then rent's due by the 1st, it's late on the 2nd, the late fee hits automatically, there's no notification to anybody, and we take no action at all until the 15th when we post a 3-day notice. That's the first step in our process, really. And even then, we don't kick off the— we have an eviction process, but we don't kick that off until 3 business days later. If they still haven't paid when we file, and then at that point we're manually kicking off an eviction process.

Okay, cool.

Thank you for sharing that. So for someone who wants to start down the path, someone's listening, someone at home or driving is salivating over some of this process stuff that you've been describing that you've been able to build out, and they're thinking, "I need this. I need to get started. I've been meaning to do this. I know that I've been reading this stuff and seeing these things." I need to get rolling here. And I want to paint a picture of like, where I think maybe the average property management company owner is, which, which is like, I mean, I like to say that everyone has a process. It just may not be documented or consistent. But obviously, everyone that's listening who runs a management company, they're collecting rent, they're doing lease renewals, they're moving in and moving out residents. So there's something there. How do we go from Oh yeah, Cindy kind of does that. And I— she's been doing it for 2 years. I don't really know what her process is. How do we go from there to it's happening automatically, it's documented, it's integrated with tech?

Like, how do we begin that journey? So I think, you know, people are expecting me to say, oh, pull up Lucidchart and start drawing boxes and arrows. But I shared this, you know, doing right here is my favorite is actually the desk calendars that come from the escrow company. And just literally, what is the journey? Because when you have a process, it's a journey for data. So what is the journey from beginning to end and how is that data moving?

Process is a journey for data. Somebody write that down. I'm going to click the little mark clip button in our podcast studio here. I've never done this before. All right. Love it. All right.

Sorry. So, yeah, it's literally a process for data and you're designing that journey. So I kind of think of it like Disneyland, right? You don't just wait in line at Disneyland. There's It's part of the ride, is waiting in line, and there's things going on, there's all your senses are activated, etc. So what is that journey? And then just draw it out. Don't get into all the minute details and if and then logic and edge cases, just draw out the perfect journey. Some people would call the golden path. What is that journey the data is going to flow through? And, you know, when I say data, I'm talking about the inputs and outputs. Just draw it out. I use boxes and squares and squiggles and just draw it out. Once you have that, the next thing I would do is actually get the people who are going to be working in this process, get them involved as soon as possible, because one of the failures that I've had multiple times is like, well, it sounds like a great idea to me, build it out, spend all this time, launch it. And the actual people who are going to be carrying out the process or do this daily are like, yeah, that's not going to work. And this is why. And you're like, oh, I didn't think of that. So get them involved, get their input. Help them do this. This is also going to pay dividends when you actually want buy-on— buy-in from your team, I should say, because they're part of the process. It's not me doing something to them. It's this is what we built together. This is what we created. Now that we've kind of fleshed out that journey, then start looking at, okay, what, what are the specifics? When should we interject an email, a text message, a phone call? Should we expect pictures? What are all those different pieces, the details? And then actually run the process without any tech. Just run it. Because on paper, even with team input, I guarantee you the world is going to have some variables that you didn't think about. And run it. Let the tenants tell you that you screwed up. Let the owners tell you you screwed up. Hey, you know, I got this email. It doesn't really make any sense. Okay, let me— let's reword it. Or the tenant— tenants usually are— when they tell you you screwed up, it's not so nice. So let them yell at you and, why did I get this? I did whatever, right? So let all that happen. Now actually go to your tech and start building it out. I use LeadSimple, but use Asana, use Process Street, Monday, whatever. Building that out in the tech is going to be so much easier now because you actually have your— you have your blueprints. I mean, can you imagine deciding, hey, I bought this piece of land, I want to build a 6-bedroom mansion. Home Depot is dropping off the 2x4s tomorrow, and you don't have a blueprint. Could you build the house? Absolutely. But it's going to take a lot longer. It's going to waste a lot of resources because you're like, yeah, actually, now that we've put up that wall, I don't like it. Let's redo it. So build it all out on paper, then put it in your tech. You'll, you'll have greater results. And then the last part is document it. Formally, you could use Lucidchart, you could use Notion, you could use Google Docs, you could, you know, type it up in a Word document and print it, put in a binder, whatever you want to do. Each of those has some pros and cons. I probably wouldn't print it out and put it in a binder because here's the tragic news: your processes are always changing. They are living and constantly make—

No, don't tell them, they'll get discouraged and won't get started.

We'll keep that a secret. Like, well, what's the point then? So how do you deal with that? If you have a weekly team meeting, make a standing agenda item, call it like processes and automation, and just, hey, anybody find any bugs, any improvements we need to make, any changes? And let that come out, and it's a living thing.

Yeah, let me comment on this, and then I want to summarize what I took away from what you said. So what you're describing here, I heard someone coin this as process depreciation, and it's very real. In the same way that a home depreciates over time, Processes depreciate and they become less effective. They start to break and there's bugs and little things that change. So I love how you described how you deal with that. And the way we deal with it is once a month, we do a deep dive on one of our core processes. We bring everyone into a conference room, we pull it up on the screen, and we literally talk through it. Okay, this is our lease renewal process as it stands today. First we do this. Is that still how we kick it off? Okay, great. And then we do this. Oh, we don't do that anymore? Okay, great. We're deleting it. And then we do this. Oh, this should be ahead of that? Okay, great. We'll reorder it. And we literally go through line by line by line and we get input from anyone who even touches the process, even if they just have awareness of it. And this keeps our processes really, really tight and makes them pleasurable to use. This is like, a great process should be fun for the people who are running it because it should be making their life easier. So let me summarize what I think I heard you say. First, start with pencil and paper. Just write it out. The journey of the data, like, can be messy. It doesn't have to use the right squares and rectangles. Like, um, I always have this vision that I'm going to like memorize like the BNPL or whatever, like the official process. Uh, yeah. Um, I never do. I always have to like, yeah, just guess. Um, step 2, involve the users, the people who are actually going to be running the process, get them involved early, get their feedback. Step 3, get into the details, get the emails, the text messages, get, get some of the, the actual pieces and parts you're going to need. Step 4, run the process with no technology. So run it manually, see what happens, see what breaks, see who you made angry and what you forgot. Step 5, now you build the technology. And then step 6, once that's all working, you document it formally. I think that's a great outline for folks who are looking to get started with one process.

Yeah, and just to add one little piece about why paper and pencil is— it's actually faster for most people, and we're not interjecting— like, most people can figure out paper and pencil. If you try to do something in tech to document, you know, and flowchart, now you got to learn a tool, you may not be comfortable with it, your team doesn't know how to add input. So just paper and pencil is fast, it's easy, It's cheap. Just get it done.

Okay, so I got one more question on systems and process, and then we're going to start to move to wrap up here. Is there anything you tried to automate and it just failed? Like it didn't work, it backfired, it made everyone angry, and you just had to completely go back to square one?

Yes, pretty much everything has done that. And here's the reason why is I've tried to automate more than what the market could handle, like being ahead of the time. And I would say that most of the failures actually came on the listing side because the average real estate agent, I don't know how I put this, can't handle it, right? Critical thinking is actually not too common in real estate.

Here's how I say that, their strengths lie elsewhere.

Their strengths lie elsewhere. So automating, before like showing time, we were doing some really cool stuff with CBS codes and all these different things because then we could, the data could come in, it could parse it. You want to submit an offer? I got an online form you could fill out and it would do it. And agents are like, what's your fax number? What? Yeah. Email it to this address. Well, yeah, but what's your email address? No, don't send it to me, send it to this one, right? Like all these different things. And so the system broke, it couldn't even launch because the users couldn't handle it. And that's where it hit me. And we talked about this at the beginning, your systems, your processes, your tech shouldn't be at what you want. It's what are the users going to be able to do. And when your process relies on third-party users, you got to dumb it down even more.

Great, I love that. Um, I want to talk about your Systems Conference. Um, so this is— I would— I wouldn't say it's coming up, um, it's in January of 2024, so it's a ways away. But here in May, you did just announce, um, early bird tickets are going on sale this week, and This isn't going to come out until July, um, so I have a feeling— I don't know if tickets will still be available in July, but share, share a little bit about what makes this different. So if you're, if you're still listening and you're digging the systems and process stuff that we've been getting into and you want to learn from other folks who are implementing similar stuff and seeing how they're doing it, um, how does this all work?

Yeah, so first off, it works because Paul and I really gel because actually we were both teachers and school administrators. And so we have that common thread and we approach this as we're actually trying to teach people. So what are the mechanics behind actually getting something to be implemented, put in the long-term memory and all that? So most conferences, you go, a lot of hype getting you to go to it. That's the hook. You go, by the end of the conference, you leave with a binder, a bag of swag, whole bunch of handouts, you throw it in the back seat, and you're like, yeah, fired up, we're gonna do this come Monday, we're just gonna rip through it. You get to the office on Monday and that backlog of fires hits you, and you're still wound up, and then all of a sudden another year's gone by and you're like, I didn't implement anything. So we want to make sure that that does not happen. So the conference is half sit and get, right? You sit, you receive instruction. I'll talk about the instruction part. And then the other half is no, actually, you're going to be forced to work on something. And we differentiate that. So in education, it's called differentiated instruction. Basically, what's your level, and we'll, we'll build scaffolding around that. So the instruction part, you are receiving instruction from people who are still actively running, owning, participating in a property management company. These aren't people that sold off 20 years ago and they're still reliving their glory days. They're still dealing with it. They may receive a phone call during the conference about something going on, but they're still in it. They're in the game. That's really important to us. Yeah. They're still in it. They're relevant. And they're not the rock star status where it's just books, tapes, and rallies. They're still in it. So that's really important. The afternoon, We have it structured in a way where there's 3 levels. The first level are rooms where you can go and you're specifically going to be working on one type of process. So everybody's working on the same thing and it's going to be facilitated by one of our people that's still in the trenches and helping you with that one specific process. The next level would be a room that's still facilitated by somebody who's in the trenches, But everybody's working on something else. But that facilitator kind of keeps people on task, encourages, motivates, provides support, but anybody's working on whatever. And then the third tier is we have our quiet room, the library room, where there's no talking, you're on your own, and you do whatever. What we have found is the secret sauce is when people bring some of their team, and now the team is working together on that process because there's no interruptions. You're offsite. Quite honestly, cell reception at the hotel is not that great, so you're not receiving phone calls and you can now actually work on something. So half of the conference time is protected and structured in a way that you can actually leave the conference with something completed. We then interject some fun in the evenings with, you know, we got a dice game, bingo, bowling, group dinners, et cetera. But it's really about instruction, and then protected time, what we call independent practice in the education world, where you can like, you're building something, you're doing something. So when you leave at the end of the conference, you're like, yeah, I got a, I got a process that's ready to launch.

Love it. So this is totally unique. I don't know of another conference that's doing anything like this where you actually are in a facilitated environment to implement what you're learning, like right as you're learning it. So I'm really looking forward— I'm actually going this year, and you generously invited me to be a speaker. So I'll be on stage sharing a little bit about our experience taking feedback from our property owners and implementing that back into our processes to make a better customer experience. So I'll be sharing some of that. And for folks who want to learn more about this conference, where can they do that and get tickets if they're still available?

Sure, they can go to PMSystems. Conference.com. That's pmsystemsconference.com, and they can see the agenda, speaker lineup, speaker bios, and then purchase tickets.

Perfect. That's awesome. And, uh, I think we're gonna wrap it here, Wolf. This has been really fun getting to know some of your backstory and your journey. Um, thank you for coming on. And for folks who want to follow along with you, not necessarily just the Systems Conference, um, how can folks stay in touch with you and keep an eye on what you're up to?

Sure. So Facebook, you can definitely find me on Facebook, just Wolfgang Kroski. And then I am becoming more involved in Twitter and LinkedIn to kind of— I don't mind sharing my personal life, but if you're looking for systems advice and it's sprinkled with kids' pictures and recipes and all that, that kind of dilutes it. So LinkedIn and Twitter, we're keeping solely focused on those professional endeavors.

Perfect. Well, thank you, Wolf, and appreciate everyone listening to the show.

Awesome. Thank you for the opportunity.