Zero Marketing, 700 Doors in 2 Years with Doug Moe

I really believe in the theory of constraints around business and that there's always truly one bottleneck you need to solve. Big enough picture, either sales or operations. And trying to balance that dynamic between the two. And oftentimes I am that bottleneck. And so trying to figure out, number one, what is the actual bottleneck we need to solve? And then number two, how do we, how do we get there has been a primary focus throughout. the past 2 years, and that's been super beneficial. As far as what I think of now, it's how do I delegate even more stuff, get more stuff off my plate, empower my team even more to do things?

Welcome back to Peter Lohmann's podcast. Today I am in the virtual studio with Doug Moe, owner of Touchstone Property Management. Doug, how you doing today?

I am doing well. How about you, Peter?

I'm doing well. So Doug, you have a really interesting growth story. That's the main thing I kind of want to focus on with you today. So tell us, as of today, if you don't mind sharing, how many doors you are and when you started your company.

Yeah, I started my company almost exactly 2 years ago now, and We are at 703 doors under management. And so it's, it's been a bit of a wild ride, but it's, it's been a lot of fun. And so it's where I'm at.

Awesome. So you're about to pass me. Tell us a little bit about what the makeup of those doors is. Is it all single family? Do you have multifamily in there? I assume that doesn't count any like association management or anything.

Correct. No association management. We are split between 25% single-family, 65% multifamily, which is duplex or larger. We don't manage any buildings with on-sites, our largest being 40 units.

Okay.

And then on the commercial side, we have about 10% in commercial, and that could be a strip mall, it could be an individual building, it could be like a 10-unit park, but no massive high-rises or big industrial complexes.

I want to come back to that commercial component because I think 10% commercial sounds like a really healthy mix. And commercial to me sounds like a dream because there's nobody living there. And my guess is that commercial tenants are easier to deal with. And so I think a lot of property managers would probably welcome a 10% commercial into the mix. But I want, let's come back to that. So 700 doors in 2 years is bonkers. I've never heard of another company growing that quickly. Forgive me if I'm overlooking somebody who's surpassed that, especially if you are talking about single-family and small multifamily. You know, of course you can grow past 700 if you're adding 250 doors a pop by taking on big apartment communities, but you haven't done that. So Now, did you have any experience in property management before you started Touchstone?

Yeah, correct. I was in the industry for about a decade. Prior to that, I owned and operated a residential house painting company, but got divorced 10 years ago and decided, I don't even know why I'm in painting. I just did it because I've always done it. And I knew a friend that owned a property management business and went to work for him for a while. And then that company got sold and went to work for another company that had a semi-absentee owner. And so I was kind of running his division of the property management company, but he had like 7 other companies he was running and then went, branched off and started my own.

And was that, so you're in, you're in Portland, Oregon, right?

Yeah, correct.

And was all of that in Portland?

Greater Portland area within 45 minutes to an hour. Yeah.

Now, how many of those properties that, that you were at, were at those different companies do you now manage?

So oddly enough, there's probably 50 from the company I was at 10 years ago, but those didn't come until about a year into my company. I got cold-called from that owner. And then from the second company that I left, I think there was a total of 80, 85 doors that came over from that one over like a 6-month period starting this one. Okay. Nice.

Got it.

So yeah.

Okay. So you didn't just parachute into Portland with no experience and scale to 700. You had 10 years in the industry. You had existing connections in the city that certainly helped. Now, not to take away from that achievement, and we're going to get into that before we get to the thing everyone's curious about, which is how do you, how do you grow that quick? I want to ask specifically about managing multifamily. Selfishly, because my company has not really been very successful with managing 10+ unit properties. It sounds like you've got a pretty good handful of those. What are you doing differently, if anything? Well, maybe first let me ask, where's the breakpoint between, well, we manage our single families and our X unit properties like this, and then anything above X, we manage this other way. Do you have a breakpoint where you take a different approach? If so, what is it? And then what do you do differently?

One thing that I do differently is probably going to be actually on the screening side of things of even accepting an owner. I actually personally have never gone out to a property first before signing an owner. And before we sign a PMA, I actually have, in addition to whatever sales calls happen ahead of time, we have an hour and a half onboarding phone call for a single-family house, multifamily, maybe 2, 2 and a half hours. But to make sure they're going to be a good fit, talking through all the nuances of management and really trying to figure out after I sign this client up, what's the experience going to be like for them and for us both to make sure it's a good fit. And so that's one thing that's really made a big difference in regard to trying to figure out who's going to be the right fit in regard to actually managing the property. What's that differential? It's changed over time. So starting a company pre-100 doors, It was me and one person. And then 300 doors, it was me and a couple people. And now at 700 doors, we have a total of 10 team members. We just hired our 10th. And depending on the person that we have, different PMs have different levels of skill and experience. And so it's split between, I have a PM that does single-family multi, another one that does single-family multi, another one that does multi-commercial, but it's kind of always passed down from me, then to my director, and now to the 3 different PMs that we have.

Okay. I'm really curious about this onboarding conversation that you mentioned. Does this happen before they sign the PMA?

Yes. Before I even send the DocuSign over. Okay.

Got it. So they talk to— do you do the sales first or this is somebody else and then this, you're like the last check?

Nope. I do all the BDM sales. I don't have a BDM yet.

Okay. Got it. So, and this isn't like the first conversation you have with them. I think you said this is like the last conversation.

Correct. Yeah. And so we've already had whatever conversations we had on the front end. Usually it's 2 calls in general. And so I have an initial inquiry call. They're interested about some stuff. And then at some point we have a second call, whether it's immediately following or a week or 2, or perhaps a couple months down the road. Go through whatever objections, decide, yep, this is going to be a good fit. And then we book that onboarding phone call that happens before PMA signing. And then I include that whole list of information that we went over during that call with the PMA as well. And they initial each page and just to show, hey, this is all the things we discussed, all the things we talked about. And so that we're on the same page and it really helps clear up a lot of confusion down the road.

And is this happening over Zoom or a phone call?

Phone call. Okay.

And so how do you frame this up? Do you tell them like, hey, so maybe they email, so you have your initial discovery call, then maybe a week later they're like, hey, we're interested in moving forward. And then do you reply back by email and say something like, sounds good, but just so you know, clear your calendar. We need to have a 2-hour conversation first.

It's not phrased quite like that, but yeah, as a part of the PMA signing, absolutely.

Yeah.

So next steps, what that's going to look like if you decide you want to move forward, we have whatever onboarding timeframe we happen to have at that period of time, sometimes a couple of days, sometimes a month or two before we can actually start management. So I frame that. And then in addition, it's a, hey, we need to book an hour and a half onboarding phone call so I can get your information, property information, talk through some additional nuances of management we may not have already spoken about during the sales calls. And then I'll put together a DocuSign and get it sent over.

Okay. Got it. I'm picking at this because it's new, it's novel to me and it seems important. And I'm just trying to think through what it would look like to implement something like this. I assume you have a list of talking points.

Yes.

I mean, you probably have some sort of a form where you're gathering information about the property, but then separately you have a list of talking points of Okay, we need to talk about security deposits, we need to talk about maintenance reserves, we need to talk about your owner statement, we need to talk about landlord-tenant, you know, fair housing laws, we need to talk about assistance animals. Is that right?

Yep, that's correct.

Okay.

Yeah, it's a pretty long comprehensive list.

Yeah. What is their response to this? Like, I— because an hour and a half is a long time to spend on the phone with somebody in any a circumstance. I'm just wondering, like, do you perceive that they are loving this, hating this, curious about this, think it's stupid, very thankful for it? I, I'm like really curious.

So as a part of that onboarding call, on the tail end of it, I always end with 5 questions and you would think I have 'em memorized. I don't, but it's number one, what have you liked about this onboarding experience so far? Question number 2, what do you think I missed the mark on, or what did we miss, forget to do? And number 3, what would success look like 1 year from now? What would have to be true? And then there's also a question of, if we do what we actually say we're going to do, would you be willing to leave us a Google review? And that's, there's probably something in there I'm forgetting, but that's essentially what I'm asking at the end.

Love it.

And I can only think of 1 to 2 times Than anyone's that really had a negative thing. And usually it's, I wish you would've sent this all information over ahead of time so I could've prefilled it out and not spent the time. But outside of those one or two, everyone's super happy. That's a lie from them, by the way.

They weren't going to fill that out ahead of time. We've tried that.

Well, and they may, they actually may have from the person that I was speaking with. I don't necessarily doubt that, but I don't care. My goal is not to necessarily just collect the information. That's an hour and a half of relationship building I get to do on the front end instead of their only interaction with me being on the back end. You have a problem, you owe us money, there's a thing going on. And so I got to build up some goodwill on the front end and really make sure that I'm screening them out between kind of the 3 pillars of what makes a good client. Are they emotionally stable? Are they financially stable? And do they trust our process? And so if they don't meet those requirements, which I pick up kind of through the nuance of conversation with them or the different things or stories they bring up, I've had an owner tell me about, they've had 4 different property management companies, but during our onboarding phone call, they sued 2 of the last 4. And I just ended up, it's not a good fit. Hey, you know what? I apologize. This sounds like it's not going to be a good fit. I certainly wish you the best and parted ways. And so whether or not I dodged a bullet, I don't know, but I don't want to find out.

You did. You did.

Yeah.

So that example where you declined somebody, love it. How many times have you done that?

I bet if I were to put a door number to it, probably between 50 and 100 doors combined between different people.

Meaning you declined them during this Last, not even talking about people who just weren't qualified on the front end, but made it to the point of this long conversation.

Yes, correct.

Wow. That's significant. Much higher than I would've thought.

Yeah. Because, well, if I say yes, like you date the realtor, you marry the property manager. We're going to be in business for a while. Like we're going to be hanging out and I have an incredible team. I am so blessed, so appreciative, so grateful for the people we have here doing all the actual work because I'm just in meetings all day talking to people and I don't want them to be stuck with a problem. I don't want them to have to deal with this. And certainly onboarding at the very beginning when I first started my company, pre, like the first 100 doors, yeah, we've got some people that probably aren't the greatest fit, but over time continuing to refine and talking with my ops team around, hey, how did this onboarding go? Because In addition to the onboarding call that I do, I also have my PM and MC sit in on the call with me, with the owner. Everyone's aware, so they all get to know each other during this onboarding call.

Wow. So significant time investment, not just an hour and a half of your time, but 2 other team members as well.

Yes. And so we run a company called Hybrid Pod. And so our owners have 2 points of contact. They have a PM, and an MC. And so those are the 2 points of contact they can reach out to. I don't do just one because if someone's out sick or on PTO, there's no one to contact. And so yeah, that's, that's kind of how we're set up in the time commitment on the front end. So it's a big, big commitment.

This episode is sponsored by Haven AI. I've been hearing a lot of great things about Haven AI recently. A couple weeks ago, I was on a webinar panel about AI and property management, and Evernest talked about how Haven's AI agent transformed their leasing operation Handling most of their top-of-funnel leasing interactions across text and email. And you might have heard Haven mentioned on a recent episode of my podcast where one of their customers, Matt Luke, told me about how he's managing 350 doors with no W-2 employees. That's not a typo or a misspeak. Zero W-2s. He's using Haven's AI agents for maintenance and leasing to make that work. There's no shortage of AI hype in property management right now. Everybody's got an AI something, but what caught my attention with Haven is that it's not just a chatbot bolted onto your website. It's a platform of configurable AI agents that plugs into your existing software and actually takes action. We're talking creating work orders, dispatching vendors from your preferred vendor list, triaging emergencies, qualifying leads, scheduling tours, and following up with prospects across phone, text, and email around the clock. They're Y Combinator backed and were just named one of the top 50 AI startups in real estate. The operators I've talked to who are using it seem genuinely impressed, which in our industry is not easy to earn. If you want to see what the buzz is about, book a demo at usehaven.ai. And thanks again to Haven AI for sponsoring this episode. Yeah, I'm really, I'm really into this. I can totally see how investing time in the front end To both to kind of do a final screening for fit, as well as a lot of education and information gathering. I bet every minute on that call saves you 10 minutes, you know, every month of headaches, problems, missed a lot, you know, not aligned expectations. I'm really into this. You can say no, but the, the doc that you have that has like your talking points. Would you be willing to share that with Crane members? Because I bet a lot of people would be interested to see that.

Yeah, I'd be willing to do that. And I've shared it. I'm a part of a Profit Coach Mastermind. I've shared it with the people in my mastermind as well. It's not formatted or like explained. It works really good in my head. I know what I'm doing. I've done it 700 times or however many times, so I understand it. Happy to share it, but it's not in a great format for someone else to learn how to use it and the nuanced stuff.

They'll get the idea. Yeah.

Okay.

That's awesome. I appreciate that. Okay, cool. So one thing that I always struggled with handling when it comes to rental owners and onboarding was market rent amounts.

Mm-hmm.

In Columbus, property owners often think their home is going to rent for more than it really is because as you know, The best tenants, the most well-qualified tenants who are most likely to stay in the property for a long time and treat it well, actually are going to come in a little below market rent because they're smart. They're like you and I, they're looking for a deal. They know they're well qualified, they have good income, good credit, and everything else. Underqualified tenants are willing to overpay. And so rental owners who don't understand this dynamic come in, at least in my experience, with incorrect expectations in terms of rent amounts. And this is often a huge point of friction for us, both during the sales call and the onboarding and during that lease-up period. Have you found any great ways to navigate this?

So I want to push back on the premise. I don't intrinsically believe that a certain price point as it relates to rent dictates who you're going to attract. Certainly, I think we can all agree that smart, savvy people can recognize a good deal. In regard to price points, I mean, we rent properties from $1,200 a month to $6,800 a month. And so it's a pretty wide swing. And I haven't done enough research perhaps, but I haven't found any correlation between how much someone paid versus rent amount and what type of caliber person we found. I've seen people plus $5,000 rent rates that have totally trashed a place. I've seen people for $1,000, $1,200 a month trash a place.

Totally agree with that. I'm not, I'm not talking about like 2 different properties. I'm saying that like, say you have a single-family home and the market, the sort of true market rent is $3,000.

Yep.

If you list it at $3,200, my experience has been, at least in Columbus, All the well-qualified tenants are not going to apply because they can clearly see that it's overpriced. And the people with marginal credit, marginal criminal history, marginal eviction history who are getting declined by landlords left and right are all about it. And they apply because they're just, they're desperate. They're willing to pay more for anyone who will, who will take them. So property owners that we deal with, at least, they always want to of course get the most money in rent. I, I understand that.

Yeah.

And so they often are wanting us to start out the rent too high. And then we lose that window when you first list the property where you get like the most interest. And I'm always like trying to, back when I was dealing with this, I would be arguing with them about like, no, like trust me, you want to come in. Like if the market rent is $3,000, let's try like $2,950. Like we really want to capture those great tenants right when we list it for rent. We don't want to play games.

Well, I love the idea. I love the concept, and perhaps I could do some more testing on my end. For me, we take an approach for all of our owners that our owners own the property. They get final say on pricing. I'm your advisor. I'm going to give a recommendation. My goal is how do I get you the most annualized revenue? And in order to do that, it's what's the highest rent I can charge while still keeping least days on market? And so We don't, I don't position it as you're going to attract a certain caliber of tenant based upon price point. Number one, I don't want the responsibility of that. Number two, every owner has their own preferences and what they're trying to accomplish. Some owners truly do want just something to look good performa-wise versus someone just wants the most money they can get. And so while it affects my company benchmark metrics on days to lease, It's with the owner's preference, it's with their consent, and we make weekly adjustments to pricing as needed and set all the expectations during the onboarding phone call. Did that answer the question?

Yeah, I think it does. I, I think you're just doing a better job than we are about, probably because of that onboarding conversation. Like we have owners who just won't let us lower the rent. Like we're like, yeah, okay, it's been 2 weeks. We need to lower this now. And they're like, no, no. Like, you're not doing a good job marketing the property. That's why it's not renting. Have you tried putting up flyers at the grocery store?

Yeah, absolutely. Have you put it on Craigslist and Facebook Marketplace? And yeah, absolutely. And I, we're not without those owners from time to time or pushing back against stuff. Again, we've set the expectations, we've talked about all the benefits, we've walked 'em through the math. At the end of the day, it's their property. And ultimately, if something sits for too long, it then escalates to the director. And then if it sits too long, it'll escalate to me and then we'll talk about, hey, this is just not a good fit. We certainly wish you the best kind of a thing and let's part ways friends. But if someone has unrealistic expectations or isn't willing to do something, it's to their own detriment. As their fiduciary, I feel a responsibility to say, this is what we need to do. And so yeah, that's kind of how we approach it.

Cool. Makes sense to me. Let's talk about your growth story. So What are you doing? How are— how do you get to 700 doors in 2 years? Tell me about your marketing. Now, we've heard a lot about your sales, kind of the sales conversations. How are you getting the leads? And then it sounds like you're the one having those initial sales conversations. Are you doing anything special or different during that initial sales conversation? We talked about the backend already.

Yeah. So as far as the marketing side of things, to get where I've gotten, I haven't spent a dollar in advertising. We don't have any presence outside of, I initially built a website when starting the company 2 years ago. It's a single-page scroller. And so not a fancy website. With that said, I've already been in the industry for a while and I belong to different groups, whether it's our local property management organization. I also belong to a BNI group. I don't do any chamber stuff. But those are 2 key places. And then in addition to that, just know a number of loan officers and realtors and provide advice and recommendations to them when they have tricky tenant situations or need rent comps. And those are my main growth engines. So while I guess kind of a soundbite, I haven't spent a dollar in marketing, what I have spent is founder time. So it's a different kind of expensive.

Mm-hmm.

Like if someone has a BDM or they pay per click, they're spending dollars to generate leads. I'm spending founders' time, which arguably is way more expensive. Now, once I hire a BDM, the BDM could do what I'm doing, so I'm not truly bottlenecking my business. But just in this moment in time, if I had to pay a BDM for 700 doors in 2 years, I just, there's no way I could pay a BDM to do that. That would destroy our profitability. And so, It's differently expensive, if you will. And so the marketing side of things goes more to how do I network? How do I build relationships? And just as important, another really big piece of marketing for us is the problem that comes across the desk. When a problem comes across any team member's desk, how is it handled? How is the situation dealt with? And what kind of experience does the other person end up with? Because in property management, All it is is problems and solving those problems and broken down by different team members. And so if we can create a great experience right now, about a third of all leads, a little more than a third of all leads come from existing clients.

Wow. Are you tracking that like in LeadSimple or something?

Yes. And also through a spreadsheet as well. Okay. And so I can see that I like the way I can view historical stuff that way, but yeah, so About a third come from existing clients, about a third come from the website for whatever reason, and then a third come from other referral sources, whether it's my sphere or realtors or loan officers, that kind of stuff.

Sure. Now, when you say a problem is a marketing opportunity, is that because solving that problem well for the owner means you have a happy customer who's likely to refer you? Is that what you mean?

Correct. Yeah. Or even the tenant. We have gotten referrals from tenants for ownership clients.

Sure.

And past tenants that have moved out, they've bought a house and then they wanted us to manage that house too.

Got it. Do you guys do real estate sales brokerage or just PM?

Nope. I've been really focused on how do I say no to all the things that I could do so I can do one thing well. Otherwise I can do a lot of things mediocre and not too great at any of them.

Yeah.

I only have some of the stuff that I see.

The guy running 3 businesses nodding along. Yeah. Awesome. And then I'm assuming based on your comment there, you probably don't have in-house maintenance.

I don't yet. That is actually one of our quarterly rocks for this year. And so we are working on getting that going, mostly due to the fact that our current vendors can't keep up with us and we haven't been able to find other vendors to replace them. Now, we could certainly pay a Wayne 100 plumber or whatever expensive company to come out and do stuff. But I don't think that's to our owner's best interest. And I don't just optimize for ease of my staff's time or energy. It also needs to be in my owner's best interest. And so we use smaller operators, and sometimes it takes them a little while to invoice instead of having a big operator that has a— in-office person that can do everything on the computer is always available. And then we have a mix in between too. But yeah, we're looking to start in-house maintenance, but having another team member lead that charge, because my shower time needs to go one place, like all my thoughts, my additional energy. So yeah, we are looking to start one up.

Okay. I really liked your explanation of owner time and how that is a cost by a different nature, or, you know, it doesn't necessarily show up on your P&L, but it is expensive. How are you thinking about where your owner time is going right now? And like, how has that changed over the last 2 years, if at all?

Oh, it constantly changes. It absolutely changes. Yeah. So I really believe in the theory of constraints around business and that there's always truly one bottleneck you need to solve. big enough picture, either sales or operations, and trying to balance that dynamic between the two. And oftentimes I am that bottleneck. And so trying to figure out, number one, what is the actual bottleneck we need to solve? And then number two, how do we, how do we get there? Has been a primary focus throughout the past 2 years. And that's been super beneficial as far as what I think of now. It's How do I delegate even more stuff, get more stuff off my plate, empower my team even more to do things? I really, oddly enough, like love the things that I do. I'm having so much fun and just enjoy the challenge. I enjoy learning and growing about all the different facets that I'm learning along the way. And so it's finding the right people that I can bring on the team instead of just hiring someone for hiring's sake. I want to kind of keep that standard of trying to bring in the best A-players we can find. So that I'm not looking at a 1-month P&L or I need this quarter to be profitable necessarily. It's what steps, what's the biggest swing I can take in order to set myself up 1 year from now, 3 years from now, 5 years from now? Because I haven't taken on any debt and we've always remained profitable, but it's how big of a move can I make so that in the future I'm setup because of our growth and what we're trying to accomplish.

Yeah. Do you have any of those big swings or big moves that you're contemplating right now?

From a financial standpoint, I guess perhaps in-house maintenance company, depending on how fast we want to grow, it may be a big financial swing. And then also just kind of staffing so that we're running at 80% capacity for each team member is ideally kind of where I want to be so we can continue to grow and have capacity to train the next team member. And say yes to people and keep the wait time for new owners because we're back up to about a month for onboarding new owners right now.

Yeah, I wanted to ask you about that. I remember you telling me at one point that you had a waiting list and tell me about what's the, you know, how big has that waiting list been in the past? Was it 2 or 3 months? Sounds like it's about 1 month right now. I'd love to hear more about that.

Yeah, it's Constantly varies, always ebbs and flows. And I am super close with ops in regard to where's our capacity at. Every— we have a semi-monthly team meeting where we talk about it. And then in addition, every time we sign a PMA, or if there's a bigger client with a batch of, like, if he's got 10 different houses or 25 or whatever, what's our capacity? What can I promise him before I make that promise type thing? And so right now we're at about, about a month, maybe it's only 3 weeks, but I would say about a month for onboarding new properties. In the past, it's been as low as 2, 3 days, and other times it's been up to 2 months. So it's just a kind of a swing based upon where we're at, what kind of a team training we're doing and capacity of the different team members. And so it's not just like a, we can always do 10 doors or always do X number of doors. It depends on so many other factors because— We're growing like 8 different things all at the same time as the company changes and grows.

Got it. So you have some kind of a daily or weekly check-in with your ops team so that you can give correct information to a prospective client when you get on the phone with them about your ability to onboard their portfolio?

Correct. Yeah. And I've referred, gosh, I bet there's at least, 50, probably more doors that I've referred to other PMCs, property management company owners, just because I don't have capacity. And they're like, I have a vacant property, I need it rented tomorrow. Can you help? And I'm like, I know someone that can, but I can't.

Today's episode is sponsored by Enterprise Bank and Trust. If you run a property management company, you already know that trust account banking can get complicated fast. Compliance rules, software integrations, vendor payments, It's a slog. That's why many property managers across the country partner with Enterprise Bank and Trust. They built a banking program specifically for our industry. Here's one feature that I think is especially interesting. Instead of paying traditional interest on your trust accounts, which many states actually don't allow, Enterprise offers a competitive earnings credit rate program. In plain English, you earn credits that can be used to offset bank fees and even pay for third-party expenses. Like property management software, bookkeeping services, consulting, Crane, and more. That's a pretty meaningful benefit if you are already paying for those tools. But it's not just about the credits. Enterprise also has a dedicated team that specializes in property management trust accounts. They'll help you open and structure these accounts correctly, stay compliant, and integrate with the software that you're already using. They also offer lending solutions if you need financing, for acquisitions, growth, or other opportunities in your business. Bottom line, Enterprise understands property management. If you want to learn more or connect with their team, go to enterprisebank.com/property-management or just click the link in the show notes. Thanks again to Enterprise Bank for sponsoring this week's episode. Hmm. I mean, can't help but feel like that's an opportunity. I mean, could you pull in like a, Like an expediter. Sometimes companies will hire expediters to help them get through certain governmental processing approval hurdles. Could you bring on an expediter and just say, your whole job is to onboard last-minute emergency owners? We probably get 8 a month. And basically, if you can do this successfully, work with our team, And it would pay for their salary and then some just having those new owners.

So going back to, so our North Star is our company mission statement, which is bringing delight back to property management. So if we're not hitting that, we're not going to do it. And so the actual act of onboarding a client, if someone were to just block out X number of hours in a day, we can onboard that client. It's the act of all the other things that the different team members that stacks up against their tasks and workloads that they have going on where a ball's going to get dropped or expectations are not going to be met. So we can absolutely do the act of getting them set up and getting them started, but the other team members involved for actually kind of running and getting things going is where it's going to drop.

Sure.

And so, but yes, I've gone back and forth with the team a couple different times of what needs to be true in order to keep this to 1 week or less at all times. And it creates a kind of a jack-of-all-trades role because we have a couple different team members doing a couple different things to be able to provide support for 3 or 4 different people in order to accomplish that and not have a ball dropped. And it's really tricky because we go back to the, well, the owner only has 2 points of contact. So if we have a 3rd person in the mix, for a period of time, that also adds another dynamic. Not that expectation couldn't be set, not that it couldn't be for 90 days or whatever time period's appropriate. But yeah, it's, I wish it was easier than just, ah, could we actually onboard 'em? Yep.

Sure. And how do the clients who you talk to, I mean, let's set aside the sort of emergency situations where they have a vacancy and they need a tenant placed now. How do the other clients react when you tell them that there is, you know, let's say a 4-week wait?

Oh, we absolutely lose some people and that's okay. It's a big world out there. There's going to be more. And it's just a cost of holding the standard so that we don't drop the ball. I don't have a sexy business model. I simply do what I say I'm going to do. And we just consistently do that. Kind of like the idea of, I heard it somewhere else, but of an Olympian. It's not what they have. It certainly could be a part of it, but it's what they don't miss. They don't miss a good night's sleep. They don't miss nutrition. They don't miss a day of training. We just don't miss the basics. And it doesn't sound fancy to say that, but so many people just can't like pick up the phone or respond to someone, or if they say they're going to do something, actually do it. We've onboarded so many properties and the owner's like, oh yeah, it's been managed for 5 years. And it's like, well, it's been inspected for 5 years, but no one did anything with that inspection. They just inspected it. They checked the box, they inspected it.

Mm-hmm.

And it like, problems happen.

Yep. So the reason I ask is 'cause we had, at one point we did have a waiting list years ago and we only did it for a short time, but I remember talking to owners during that time and they were like shocked about this and a certain percentage of them made it, it made them want it more. Right? It's like the, it's the psychological impact here of something you can't have. Suddenly you want it more, right? So I was curious if you saw that being, I was curious if you saw that as being instrumental in your growth to 700 doors. Was the psychology around the limited availability, or do you think you reached 700 doors despite the fact that you were losing clients to the waiting list?

If I had to say, I would say despite for sure. There's a couple of people That were like, oh my gosh, I can't wait to get on your waiting list. But by and far the large amount of people, they're like, why can't you just get this done in a week or in a couple days? Like, why? Just get your stuff together. And so, yeah, no, we've definitely lost more than we've gained, I believe.

Well, I would be surprised. I would be curious to check back with you in a couple years because that waiting list that I did for like, we seriously had it for like 90 days. It was a really short period of time that we had this waiting list. But for years later, I would run into people who remembered it and were like, really? They would be like, a lot of it was like referral partners too. They'd be like, do you guys still have a waiting list? Like, I got someone really interested. And they, it really made, it made a big impact on them. So I wonder if you'll find that over time, cuz you're still, it's still early days for you.

Mm-hmm.

I wonder if over the next 2, 3, 4 years, you're gonna have clients that either Went to somebody else or decided to rent it themselves or whatever, who come back and they're like, I know I couldn't wait last time, but I'm really interested. Like, you obviously are doing something right because I tried this other thing and it didn't work. I want to get back on your waiting list. I think that could start to happen for you.

Oh, for sure. And I mean, a number of clients that we didn't get, I still check in with them periodically after they've already signed with another management company, just making sure they get the service they deserve kind of a thing. And a number of them like, no, I've been sitting vacant for 2 and a half months. I wish I said yes to you and waited for a little while, or they're not having a great experience in the backend later on. So.

Yeah, totally. And how's your churn?

Nominal. And so I would, well, here, let me pull up my KPI spreadsheet on my end and just looking back through, The past 2 years, our churn total year-end outgoing units so far this year is 11. Last year, churn company-wide, 28 units last year.

28 on probably like an average of like 400 for the year or 500 for the year or something like that?

Yeah, correct. Yeah.

So that would be like 5% churn-ish, even less this year, way less.

Yep. Yeah.

That's amazing. And we talked about the important conversation that you have prior to onboarding with an owner. We've talked about your focus in only doing one thing and doing it really well. Is there, if you had to add maybe one or two other things that are instrumental in your low churn that maybe we haven't touched on yet, what would you say that That is.

Now, well, number one, I think, is going to be that onboarding expectations. Number 2 is going to be doing what we say we're going to do. And number 3 is the unfair advantage that I have against so many operators is that I, my understanding is the average lifespan of the client is perhaps like 8, 10, 12 years or something like that. I've been in business 2 years. So they just haven't been with me long enough to start naturally churning and having those life events of selling or passing away or doing whatever naturally happens in turn. But as far as number of clients that leave us, but because they're unhappy with management, I can think of 2 or 3. Yeah. And we just weren't the right fit for 'em. And that's okay.

Yep.

Yeah.

And you're right, there will be a little bit of a catch-up that happens as you reach into year 4, 5, 6, 7 of business. But nevertheless, I think for anybody, regardless of how old or young the business is, Losing less than a handful of doors a year is remarkable. After they're fully onboarded, property's leased, rent's flowing, everything's chill, do you or does anyone on your team proactively reach out to property owners on any type of a cadence? Nope.

We don't have a process for that yet. Okay. Not against it. We just haven't gotten around to capacity to do that.

Sure.

Okay. But I love the idea. How about you guys? Are you doing that?

We do. We have for a long time. We've switched up the cadence and the frequency. We tried monthly, we tried quarterly, we tried once a year. I forget where we are right now. It's probably something like every 6 months. But yeah, I mean, I think it's a nice touch because of course property owners are mostly used to only hearing from their property manager with bad news. And so it's nice to reach out proactively when there's nothing wrong, And just say, hey, it's Peter with Our Property Mission. Don't worry, nothing's wrong. Just wanted to call and see how everything's going, you know? And it, it's also an opportunity to do things like ask for a referral, ask if they own any other rental properties. You'd be surprised how many of your clients own other rental properties that they haven't told you about.

Absolutely.

Stuff like that. So it's, it's, we found it's, it's helpful.

Cool. Love that. And for the time periods you have done, what do you feel like has been the best as far as 1 month, 1 quarter, 1 year?

Well, I think monthly is definitely too much.

Okay.

You know, even with your current client count, you probably have several hundred, many hundreds of clients at this point, and that it's just overwhelming to reach out every month. I think quarterly would probably be the maximum. I think 6 months is fine. Once a year, I feel like it's probably a little too infrequent because once a year, I mean, you're, you're already Talking to them once a year for things like lease renewals or move-in, move-out, stuff like that. So yeah, let's hear a couple of things I want to ask you about before we get to the commercial stuff. I want to ask you about RTMs. I want to ask about your tech stack, what software you're using. I want to ask how you're using AI. So why don't we start with your tech stack? What are some of the technology partners and softwares that you're using that are have been really helpful and key to being able to grow the business and be so successful in terms of churn and some of your other metrics?

We use AppFolio and PropertyMeld are kind of our 2 biggest things that we use. And then we don't use a LeadSimple or Aply type process software. And instead just have Google Sheets and people have check sheets that they run through and everything's run through That for different processes that we have built out. We have all of our SOPs built out company-wide. Huge credit to both my directors for getting that done, cuz I had zero part in it. But having an SOP for everything makes it number one, super easy to train and super easy just to go back, revisit, and make sure you know what the heck you're doing.

Mm-hmm.

Given that we have such detailed processes like our owner onboarding check sheet, I think we have 140-something rows. of tasks that we have to do depending on whether it's occupied or vacant to onboard an owner. And so it's a lot.

And so when they, when they're completing that check sheet, do they just like make a copy of the Google Sheet for 123 Main Street and then start checking stuff off?

So it's a shared Google Sheet and when a new property's created, it just creates a new row. A new row. And okay. Yep. And then you just do that and then when you're done with it, just copy it and print it to PDF, upload it to the owner file so that we know that have the historical data that, yep, everything was done. And then it just deleted from the spreadsheet.

Got it. Okay. And I think a lot of people run with a similar setup and if it's working, it's working awesome. Like far be it for me to say you need to get into this software. Like if it's working, it's, and it clearly is.

Well, and on that note, we did try and get into one of those softwares. I won't name them, but we onboarded with them. We hired a process architect to help us build it out and they did a wonderful job. And then we got to actually using the process and the software, and the lag time or click fatigue was absolutely mind-numbing for my team. They were just, it was so much wasted time and effort. And whereas if someone already knew the process, they just go through, do the process, and they go back to the check sheet. Yep, I did all 7 things, check it off, done, move on to the next. It was a much different experience for the team. And I thought it was going to be this amazing thing that, all right, great, everything's automated. People can just click through, get all the things done, nothing gets missed. But there was like a, every time you click something, it took 10 seconds to do it or 30 seconds for the next card to populate. And it was just, ugh. Yeah, we killed that 30 days into it because it was just, could not believe the amount of waste of just team capacity of feeling like they just had to sit there and wait for something to populate till they could do their job instead of just being able to do their job. And then just checking it off in the back, saying, "Yep, all done." Sure.

Yeah, I mean you can't go much faster than Google Sheets. It's all just right there, and you're just. So that's really interesting, and I wonder if you'll end up having to revisit that at a certain scale or size. Yeah, because there is some magic to having it integrated with with you know your appfolio, and where it knows your owners, it knows your tenants, it can send emails, it can. reassign tasks and have conditional logic around if it's occupied or vacant. And it's really fun. That stuff's fun for me, but maybe not most people.

Oh, absolutely. No, I, I love the process and the automation because I go back to, well, what's the highest and best use of my team members' time? And it's certainly not sending that same email again. And so we have templates and within AppFolio they have RealmX flows. And so they're starting to catch up with some of the other process software. Not to say it's anywhere near what the other stuff was capable of doing. It's able to take a lot of the base-level automation things that just need to happen every time.

Sure. So AppFolio, PropertyMeld. How about for your listing and leasing software? Do you do anything with that?

Nope. All through AppFolio.

All through AppFolio. Do they have like a self-showing lockbox capability or how do you do that?

Well, I don't know if they do or don't, but we don't use the self-showing lockbox. We still old school bring up with a manual lockbox, but it forces us to talk with the people instead of just having an automated system generating code for someone. Gets a chance to get their driver's license front and back, which the other ones can do as well, but just more of a touchpoint that forces us to try and interact with a person to get to know them. Because getting the wrong person in a rental unit is really painful. It's—

Especially in Portland, I have to imagine.

Yeah. Well, and it's, Definitely going to hurt our leasing timeframe. By how much, I don't know exactly, but anytime you can automate and use AI to get someone into doing a showing, I got to imagine it's going to lead to a faster leasing timeframe. We attempted onboarding with another software for the leasing side of things, and the founders were incredible, and there was just a lot of issues that came up. But again, they bent over backwards to try and fix it. I was so impressed with them and would still recommend their service to anyone. There was just too many glitches. And our looking at our top line number of guest cards that came in, we got cut in almost a third of what we had over the past. And I went back 2 years, we had a third of the number of inquiries that we've had using this software.

Hmm.

And it just was really detrimental. And I don't know why, because they still syndicated through The same places we syndicated through. And a lot of people use them. But again, founders are incredible. I still highly recommend them. And a lot of people have had great experiences. It just, for whatever reason, we had syndication issues and couldn't get leads.

So are you meeting prospects at the property for all these showings?

100% remote. We've never done in-person except for, I think we have a handful of odd condo units that have a secured door.

Okay. So what, how does it work? They come to your office and get a key or?

No, no, no. Remote. And so they, they go out to the property, there's a lockbox on the property, and then we give 'em a code and then they go in there and then we check with them while they're on site to see if they have any questions. And then at the end we have the follow-up of sending a link to the application and seeing if they have any questions, confirm that they did in fact lock up the property or had any problems opening or closing a lockbox. If they have issues with lockboxes, we'll send someone out to just confirm on the property. But yeah, and I've actually been doing remote showings with and without software for the past 10 years. Well, since before COVID And so it's not new to me. And we get a number of owners that push back on it during the onboarding phone call, but just being able to explain how long I've done it over how many units and the chance of a problem. is so low compared to the offset benefit of being able to get people out there quicker is going to mean a lot more dollars in their pocket getting this place leased so much faster.

Got it. Okay. So these are just straight up dumb lockboxes, just the 4-digit code. They get the key out of there. You hope they lock, lock it back in when they're done.

Correct.

And I'm assuming you're rotating these codes once a week or something.

And so, yeah. And if we don't get confirmation, they locked it up and then we have to get someone out there to confirm if they did or didn't do it. Most everyone, most people are good people. Most people are honest and we don't have issues. I think we've only had 3 times where someone either left a lockbox open or didn't secure the property out of 2 years out of, I mean, it's been an escalation of 700 units that have been 700 for 2 years, but it's a very low margin that something actually happens.

Sure.

We haven't had anyone move anyone else in. At the last company I was at before starting this, using another software provider's electronic lockboxes, they had 3 units get rented out by people scamming using that, getting a code and then moving someone in. And we haven't had any of that. Knock on wood. Not to say it couldn't happen. It absolutely could. It just hasn't.

Got it. Okay. So all of your showings, you're, you're getting calls and emails and text messages to your office And you're saying something like, hey, great, love to get you in there. Just need a copy front and back of your driver's license. And then you give 'em the code and tell 'em when to go in and all that.

And try and find out more about the prospect, try and sell 'em or find out what their needs, timing, interest, you know, just a little bit.

That's gotta be a huge volume to be handling manually. I mean, we use RentEngine and all of that is handled automatically by their AI, like all of those inquiries and scheduling and everything. Is this just like, like 1 or 2 people's full-time job?

Correct. Yep. And so number of inquiries that we have, probably around 450 a month.

Hmm. Okay.

That's just lower than I would've thought. Yeah. So very low actually the last couple months. So 174 in August, 164 in July, 430 in June, 193 in May, 271 in March. And so It varies, ebbs and flows.

What about if somebody calls after hours, like, or on the weekends about a showing, seeing a property?

Yep. They get a response during normal business hours. And so it helps set the expectation with them on the front end. And we certainly lose leasing velocity on that. And it's just a, that's where we're at business-wise right now.

Doesn't seem to be hurting things, so.

No, no. And again, most good, Most people are good people. Most people actually want a place. And if someone needs to move into something tomorrow, not a good person usually. And so people that are qualified are usually willing to wait for the right opportunity type thing.

Yeah. Cool. Any other technology partners that have been great for you guys besides AppFolio and Meld?

I do use LeadSimple just on the BDM side of things. And so I use it for CRM just for following up with leads, but not for running the company. We use GoToVoIP system. That works fine. Work with Profit Coach on their scoreboard. But I think those are the only, just always trying to get to how do we get less logins? How do we keep it small?

Totally.

I haven't had a ton, so I haven't experienced the 20 or 30 logins that some other companies have. But yeah, just less is more until we bring it back.

Yeah. Just try to avoid it. I mean, shout out to our Crane Partners and all my sponsors. They're amazing. I don't even know who's sponsoring.

Absolutely.

I don't know who's sponsoring this episode yet, but You know, love, love 'em all, but it, it gets to be a lot, you know, all these different logins and they don't talk to each other. And yeah, it's, it, it is a problem. So hold, hold back the logins as long as you can.

Sure.

Some things are unavoidable.

I use ZInspector. I forgot to mention ZInspector for all our inspections. We love them.

Yeah, we onboarded with ZInspector a couple months ago. Um, so we're, we're trying, we're trying them out right now. I'm waiting to sort of hear from my team on how that's been going. Cool.

Okay.

Are you using AI at all? It's 2026. It's actually federal law. You have to ask about that on a podcast. So, so tell me.

We made it, we made it 52 minutes. I mean, I'm impressed.

Yeah.

Yeah. So for AI, we do use Claude. We have a company cowork and different logins for different team members, and we've built out some different artifacts in there. We don't use it because AppFolio restricts API access. We don't have a lot of uses within there. They just introduced Cloud Connect, but it's just a connector. It's not a true API access, so it can't really do much in there at this moment. And so as far as what we're doing with Cloud, it's mostly around email communications or in the commercial world, because you're asking about that, helping generate all the CAM reconciliations, the common area maintenance reconciliations that we have to do, or analyzing different people that have Portfolio of properties and they're like, hey, here's my other statements that I've gotten over the past year. And so I can run some analysis on that and say, hey, here's some different things that we can do to help out the bottom line on these things.

Okay. Yeah. I mean, you're the first person in property management I've talked to who ha— who has an actual company Claude account with like a shared cowork space. I don't even really know how it works. Shared artifacts. Like, that sounds really interesting. Do you feel like that's been awesome? Like, is that something you would recommend folks look into?

Oh, absolutely. And I'm going back to like, all right, well, how can I keep everything in one centralized place? And so we use Google Suite for a lot of our centralization, but then Claude can help create artifacts around for our different job descriptions that we have for different roles or all of our different scorecards for our different team members that we use. Or our different monthly cadence things or our training docs or help building those out and making quick adjustment and tweaks to stuff is so fast with that. That's been a game changer on the admin side of things.

Yeah, I think, I think a lot of people would be interested to learn more about how you're using that because I think you're pretty early, early to the game. That's really cool. So we're coming up on time and I do want to hear about the commercial side of things. So tell me a little bit about what you are managing commercial-wise. Do you recommend it? Because it is a little bit of a deviation from your focus thesis that you articulated. And how did you get those accounts?

So for the focus thesis, we don't want stuff with on-sites is where we draw that off. Sure. HOA management, I feel like is an entirely different beast. Commercial management, I think is more in line with accidental versus investor-based type avatars. And so there's both in the commercial world as well, by the way. And so given that we have people on the team that already know that world and are experienced with it, it's not a big push to try and reinvent the wheel necessarily. I have previous experience with it, so does my director, and so does now our most recent portfolio manager. Have commercial experience. So we already have people that know it, run it, and can do it. It is an entirely different animal if you're trying to, if you're bringing on people that don't have experience and training them how to do commercial. The commercial world's the Wild West. Whatever you negotiate and agree to in the contract is what goes. Like there's very little, the ORS, sorry, the Oregon Revised Statutes govern landlord-tenant law around residential real estate much differently than in the commercial world. And so, but that also means if you don't know what you're doing, you're signing up to a contract and you can absolutely really hurt that owner. We just took on an owner that bought a property, had a tenant, tenant was underpaying and their renewal was coming up. They hired us and reading through the lease agreement, it was the world's worst lease, or if you're the tenant, the world's best lease because it automatically renewed for the tenant. Without an increase.

Nice.

Indefinite, indefinitely for as long as they want to stay there. And the owner can't do anything about it. And it's contract law, it's not landlord-tenant residential law. And so it's, there's a lot of pros and cons, but you have to know the understanding of how to do commercial management along with how to communicate with those type of tenants. 'Cause it's a very different type of tenant. And so yes, it's different than just residential slash multifamily, But it's very similar in the fact that it doesn't require an onsite manager. You're not managing teams of people. It's still the same style of management as long as you understand what that is and how, how to make it work.

Sure.

And so, yeah, I very much— Do you recommend?

You think it's worth?

Oh, absolutely. I very much enjoy it. And I think it's a great value add because so many places, the place, so I rent my office from a, I'm in a big office park. And so I rent a unit here. for my company. And in order to get this unit here, I spent probably 4 months following up with the leasing agent nonstop to get a response. They had another vacancy here. And so I reached out to them because we need a bigger space to outgrow this one. And I've probably sent between texts and emails 70 reach-outs over 3 or 4 months now, And I think it was just yesterday they finally said, okay, yeah, we'll work on getting that agreement over to you. Like it's just been sitting vacant. They have a vacancy and that's crazy. It just blows my mind that it's so hard.

You can't imagine the owner's okay with that. That's, that's wild.

But they, I, they don't, I gotta imagine they don't know.

Yeah.

Because if they're not even responding to me, why would they be updating the owners if they're not responding to me?

Like, yeah.

Yeah. But yeah, so I think the bar, while it's low in residential, It's low in a very different way in the commercial world. And given how fast and responsive we are to the commercial world, it's day and night for those tenants because they are just not used to that. Yeah. And so I think we can provide a much better value and service for our owners than what some of the other, other companies are doing.

Yeah. Awesome. And so, well, I want to close just by asking about your experience in Crane. I try not to flood the podcast feed with Crane members, and talk my own book, but we got you on here. You've been a member for a while now. How's your experience been?

It's been incredible. I cannot recommend it highly enough to everyone that I speak to. It's been a game changer for me and was instrumental in kind of my thought process behind what I'm trying to accomplish with the company. Because I'm doing business for the fun of business, but with that, Crane helped me give a different frame to, all right, well, what is business? What is quote unquote success look like? And the idea behind CRANE and having time freedom created a whole different dynamic rather than just, I don't know, P&L or headcount or doors under management or whatever vanity metric you want to look at. And really helped me focus on, all right, what needs to be true in order to get to be able to step away from my business for a day, for a week, for a month? At this point, I've made it up to 2 weeks. I haven't been— and that was mid-month, so it didn't deal with Beginning of the month or end of the month.

Mm-hmm.

And I was strategic about it, and that's just where I'm at right now. But being able to, all right, well, how do I take more time away so that the business can actually run and function and I'm not the bottleneck? How can I empower my team more? And so Crane has been awesome in that regard, just from a framework perspective. Separate from that, it's to some degree kind of like drinking out of a fire hose if you're just coming into it, 'cause there's so much really cool information around What are people actually doing? What are the problems they're actually coming up against? And a groupthink that happens very quickly around how do we problem solve for it, along with all the historical information that's been built over the last couple years now. Crane has been awesome. In addition to some of the mastermind we did, I would say one of my key takeaways from Crane was when Crane hosted the Crane members at Crane's expense to come out to Denver And we hung out in Colorado or Golden City and having a mastermind there and talking through with a, just a handful of other people and that intimate setting, really diving deep into what are your goals? What don't you, what do you want to do? What don't you want to do kind of a thing? And that was instrumental in kind of setting my life off in what do I really truly want to accomplish or what am I scared of accomplishing? And I believe that was something that really helped me find out Just from a personal life perspective, I'm now engaged to Carrie, my fiancée, and so excited about that. But part of that was, well, how do I focus more on personal life as opposed to just business life? And just really getting the opportunity to think through more than just day-to-day stuck in my business. So is CRANE worth it? Oh, undoubtedly. It's silly if you're, if you're not in there. I realize there's a door count in order to get in at this point. But yeah, if, if there's any way that someone can get connected or just find another peer group, if you can't get into Crane, find another mastermind that works for you. Or, 'cause it's not right for everyone. Not everything's right for everyone. Try it out. Find out if it is or isn't though. Yeah. My recommendation. I love it.

That was incredible. Uh, really appreciate that feedback. That makes me feel great, honestly, because that's a lot of what you articulated is, is our goal with Crane. So it's wonderful to hear that feedback from Doug, thank you so much for coming on the show. For people who want to follow along with your journey and Touchstone, where can they do that, if anywhere?

They can physically come into my office. I haven't done social media for 10, 15 years at this point. We don't have any, there's no, I'm not anywhere on the internet. So—

All right. You gotta just tune in next time he comes on the show to get the update.

Absolutely. Maybe—

Or join Crane and come to the meetups.

Yeah. Come to Crane. Absolutely. I'm excited. And I'll be at the MX Maintenance Summit and the AppFolio Conference. So anyone that's going to be there, love to see you guys.

Awesome, Doug. Well, I'll see you at MX Summit next week. I know this is probably coming out after that's over, but appreciate again you coming on the show, Doug. And thanks again. 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, peterloman.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.