011: The Secret of Operations
I have a special podcast for you today, because I am in Kauai, the garden island. The backdrop behind me is just amazing. This is what happens when you get that wealth that I have been talking about. It enables you to go on really cool trips and bring lots of friends and stay in amazing places like I am staying.
Today’s topic is about the secrets of operations. What operational things do you need to do to make a big difference. How can you get the most important things done and free up your time by finding the right person to do those things for you. You want to run your ship by empowering the people you put into the system to do their job which allows you to focus on the money.
Topics on Today’s Episode:
- Find management companies or multifamily operators.
- Pay them between 4% and 6%. You can pay them less because it is a lot of business. That is the power of multifamily.
- Questions you ask your management company are things like:
- How they turn a tenant into a client?
- What is their sales process for getting people in the door?
- What are their managers responsibilities?
- Managers should scan the bills to the home office, and the home office pays the bills.
- Keep asking them about all of their systems and processes. Including staff for X amount of doors.
- Best Practices for a Management Company
- Make sure you ACH all of your tenants. That means they fill out forms to have their rent ACH drafted each month. Collecting rents wastes an insane amount of time. Lead manager is in charge of the people who come on the property, and the financial status of the property. Accountable to P&L.
- Lead manager has the responsibility of leading people. Hiring the correct managers and maintenance people. Don’t rent to the wrong tenants.
- Replace all of the old light bulbs with LED lights. Replace tenant controlled switches and put lights on a timer. Take one year and cut all of the overgrown stuff down and make it look like a new property.
- Put in USB plugs in kitchen and every bedroom. Point this out when doing the walkthroughs.
- Have the maintenance guys clean the carpet and then have the manager check to make sure that it is done right. This saves time, money, and gets the job done right.
- You can make money by increasing rents or decreasing expenses.
- We are fanatical about P&L and our supply chain. We use buying power collectively to lower operating costs.
Links and Resources Mentioned:
“The legacy lifestyle isn’t going to the job each and everyday and managing a bunch of people.” Corey Peterson
“Most newbie operators try to do everything themselves. I think that is a bad idea.” Corey Peterson
“Lighting is the number one biggest bang for your buck that you do at a property level.” Corey Peterson
Don’t forget to download my Free Workshop Quickstart Video Series, and if you like what you have heard please leave a review on iTunes. On the next episode, I am going to give a quick shout out to some of my reviewers.