Latest / The Mobilization Mindset / Episode 137 | The Operator’s Edge: Risk, Capital Stewardship & High-Standard Leadership w/ Matthias Gruenwald

Transcript

Episode 137 | The Operator’s Edge: Risk, Capital Stewardship & High-Standard Leadership w/ Matthias Gruenwald · The Mobilization Mindset

0:00
SPEAKER_00: What I often find is I typically know whether we need to go left or right, but the team helps me make the second and the third decision after the biggest.
0:10
SPEAKER_00: And um you do that by creating an environment for the conversation and and really caring about what the answer is.
0:17
SPEAKER_00: Because we all want the same outcome, you know.
0:19
SPEAKER_00: But you gotta be able to the certainty that people need really is a comfortable situation more than they need the certainty of the answer.
0:25
SPEAKER_00: Your job is just to make a decision when you get enough information to do so.
0:30
SPEAKER_01: Sometimes you have to call the shot, you know, it's fourth down, one to go, one second on the clock, you just have to call the shot sometimes.
0:35
SPEAKER_01: Focus on action, not perfection.
0:38
SPEAKER_01: I've always been a perfectionist too, and that slowed me down in my career, so it probably could have been further if I would have started earlier with imperfect action, obviously.
0:46
SPEAKER_01: And growing aggressively is not always the right answer.
0:50
SPEAKER_01: Growing with discipline is the right answer.
0:59
SPEAKER_00: Welcome everybody to the next episode of the mobilization mindset.
1:03
SPEAKER_00: My name is Scott Pieper, CEO and founder of mobilization funding, and today we're gonna be talking about operating your business, finding problems, assessing risk, putting people, processing culture into systems that you can manage and control, empowering your team, showing how to do those things.
1:21
SPEAKER_00: And I have a great person here who is an operator, operated at a corporate level.
1:26
SPEAKER_00: You're gonna hear some great stories about some of the most efficient systems ever created building cars and how he took that experience and turned it into real estate, project management, and of course, people management.
1:39
SPEAKER_00: Mateus Grumwald, co-founder of WCG Investments.
1:43
SPEAKER_00: Welcome, man.
1:44
SPEAKER_01: Thanks, Carl.
1:45
SPEAKER_01: Thanks for having me.
1:46
SPEAKER_00: Appreciate it.
1:47
SPEAKER_00: When you're walking out of here, you're like, this is awesome.
1:49
SPEAKER_00: I got to connect on this, this, and this.
1:51
SPEAKER_00: And this is like we hit the point home that I really would like to be people to know about you.
1:54
SPEAKER_01: When I had a W-2 just about like over a year ago when I actually stopped my W-2 as a chief operating officer, um, because I built this real estate business on the side and it exploded.
2:04
SPEAKER_01: And then my partner and I, you know, were very successful in the real estate industry now.
2:09
SPEAKER_01: Um and I brought a lot of skill set, like a lot of the skill set and also the process-oriented, you know, mindset from my real estate, uh my uh automotive environment that I was in in manufacturing into real estate.
2:22
SPEAKER_01: And then what I've learned from that is basically, is um it doesn't matter what you know, if you're in the game of business, it's just a matter of what kind of arena you're playing in.
2:31
SPEAKER_01: I play in the arena of real estate right now.
2:33
SPEAKER_01: You guys play in construction, other people play in manufacturing, but we all try to make money.
2:37
SPEAKER_01: So I think that's the parallels are there.
2:39
SPEAKER_01: We just play in different different games.
2:41
SPEAKER_01: It's like Monopoly, there's different Monopoly layouts, but we all play Monopoly in a sense, right?
2:45
SPEAKER_01: It's true.
2:45
SPEAKER_01: Yeah.
2:46
SPEAKER_00: Well, you know what's funny is once that happens, once you start a business, you're in, you're in, you're like, I'm in the electrical business, or I'm in the plumbing business, or I'm in the real estate business, or the automotive business.
2:56
SPEAKER_00: But once you get to a certain point, particularly as an owner, operator, executive leader, you're ultimately in business.
3:02
SPEAKER_02: Correct.
3:03
SPEAKER_00: And and I think that goes right to what you're talking about is in business, you essentially are running systems, managing people, putting culture in place, and how you go doing that effectively inside your revenue model is really the key to success or not.
3:19
SPEAKER_01: Absolutely.
3:19
SPEAKER_01: Yeah, absolutely right.
3:20
SPEAKER_01: I think that's what many people get wrong.
3:22
SPEAKER_01: They get into our game of real estate.
3:23
SPEAKER_01: They want to just get real estate, passive income, and lay on the beach, but it doesn't work that way.
3:27
SPEAKER_01: Um, unless you build like a major portfolio, but you have to invest millions of money, uh, you know, you have 10%, let's say you need$100,000 of your passive income, in quotes passive, you have to invest at least a million dollars of capital at a 10% return.
3:38
SPEAKER_01: That's a really strong return.
3:40
SPEAKER_01: Right.
3:40
SPEAKER_01: People think I can just buy some real estate and lay on the beach, but you know, if once you get into commercial real estate, you're running a business, they're like mini businesses you're running, and then you have this overall umbrella uh company that runs the entire empire, if you will, and that's what we are doing.
3:52
SPEAKER_01: And I I enjoy that.
3:53
SPEAKER_01: But many people missing that point.
3:55
SPEAKER_01: They just want to, you know, go into the real estate game in our in our league, so to speak, and just be like very passive.
4:00
SPEAKER_01: And it can be if you have a lot of systems in place and processes.
4:04
SPEAKER_01: I don't see it as passive, I don't have to do anything, I see it as passive, I have a lot of freedom, and I can structure my day or the weeks or the months or the years the way I want it to structure.
4:13
SPEAKER_00: You know, you brought up a good point though.
4:15
SPEAKER_00: The way that you take a business and the way that the business evolves into business, and you compare, like, oh, I want to still have this side hustle with I'm gonna like renovate projects, and I think a lot of that, whether it's Instagram culture, social media culture, friends that are lying to other friends, you know, none of them say like, oh, I've got this piece of property and I got my ass kicked.
4:37
SPEAKER_00: Or I got this piece of property and I got all my asses kicked.
4:40
SPEAKER_00: They're always just telling you, like, I got I bought it, it makes it sound easy, I rent it, and it and then by the time you get to the point where you're investing in those opportunities, you start to realize that they break even barely.
4:52
SPEAKER_00: Um they lose money, but the rationalizations that people have put in place as to how they how they give them a turn return, like, oh, I write off the the the the property interest was one I heard before, which now generates more money on my W-2 side.
5:06
SPEAKER_00: You're like, no, no.
5:07
SPEAKER_00: If it's a standalone property, depending on how you're using it, what you're doing with it, does it make you money?
5:13
SPEAKER_00: Is it positive cash flow or not?
5:15
SPEAKER_00: Like, period, you know, and it's funny to hear how people, when defined like that, are not making shit.
5:20
SPEAKER_01: Yeah, exactly.
5:21
SPEAKER_01: And then it's also a big difference between like, okay, what's the pure cash flow and the raw cash flow, right?
5:26
SPEAKER_01: Because just say like your own expenses and your mortgage for a rental property, let's say it's you know$1,500 and they make an$1,800 and say, oh yeah, cash flow$300.
5:34
SPEAKER_01: You don't, because you don't calculate for any capex, any repair maintenance, any vacancy, etc.
5:39
SPEAKER_01: So you at least have to shave 20-25% off your gross income just for like those uh those things, right?
5:46
SPEAKER_01: And then let's say you have an HRAC going out and it's a bigger unit, it might be like$8,000 to$12,000, and you're losing years of cash flow unless you have it on the sidelines, but that money is gone, you sink down into the deal.
5:55
SPEAKER_01: Um the deals are out there, but they're hard to find, and it doesn't usually work that way.
5:59
SPEAKER_01: You're buying 10, 20, 30 of those that you just like can retire, if that makes sense.
6:05
SPEAKER_01: It's good, it's good for like wealth preservation and like wealth growth.
6:09
SPEAKER_01: It's a very long game.
6:10
SPEAKER_01: If you want to go those single family or small multi-family properties, but that's why I got into the business of real estate of doing it in scale, where I'm driving the net operating income, the NOI, up, which drives a lot of value.
6:23
SPEAKER_01: And we have investors you know investing in our deals, and and that's um, that means we're driving returns to them and we are also making money for ourselves.
6:30
SPEAKER_01: So we're legitimately running a business right now, not just like parking cash somewhere and get the passive income in quotes.
6:36
SPEAKER_01: It doesn't you should get started that way.
6:37
SPEAKER_01: It's I started that way because I would rather want to get punched in the face with a do on the duplex than the hundred unit mobile home park, right?
6:43
SPEAKER_01: Right.
6:43
SPEAKER_01: Because that punch is a little bit harder on the hundred unit compared to a duplex.
6:46
SPEAKER_00: So it hurts more.
6:47
SPEAKER_00: It's a lot more.
6:50
SPEAKER_01: It's like Mike Tyson said, right?
6:52
SPEAKER_01: Everybody has a plan to get punched in the mouth.
6:53
SPEAKER_01: So it's that's a thing.
6:55
SPEAKER_00: It's exactly true.
6:56
SPEAKER_00: I mean, we we say the same thing, it's but certain loans, you know.
6:58
SPEAKER_00: It's a bad loan, you learn a lesson.
7:00
SPEAKER_00: I'm like, I wish I could have learned that lesson on this smaller loan now instead of the bigger one.
7:04
SPEAKER_00: But talk to me about those systems, those businesses, the operations, not necessarily in the real estate world, but what I'm curious to hear about first is you learn them in the corporate world as a COO in the automotive industry.
7:17
SPEAKER_00: Maybe talk about that and what you saw and how all of a sudden you knew like systems and processes and people management drive scalability and success of a business.
7:26
SPEAKER_00: And transitioning that into a real estate portfolio business.
7:31
SPEAKER_00: But talk about the foundation of where you learned that, what you saw, how you realized it's not just like you're not just winging it.
7:36
SPEAKER_01: Yeah, exactly.
7:37
SPEAKER_01: Uh yeah, that's a good question, Scott.
7:38
SPEAKER_01: Um, so in my corporate world, I was a chief operating officer for a manufacturing company.
7:43
SPEAKER_01: Um I was responsible for the North American operations, right?
7:46
SPEAKER_01: So that meant I had the Detroit, Michigan, Greenville, South Carolina, and Monterey, Mexico facility under my wing.
7:52
SPEAKER_01: So multicultural, right?
7:54
SPEAKER_01: Uh multinational as well.
7:56
SPEAKER_01: So in automotive, the stakes are always very high.
7:58
SPEAKER_01: So our customers were big corporations, right?
8:00
SPEAKER_01: Like General Motors, Ford, Chrysler, or Stellantis nowadays.
8:04
SPEAKER_01: And these guys don't play around.
8:06
SPEAKER_01: If you shut that line down, they're penalized you're$3,000 a minute.
8:10
SPEAKER_01: So you can cripple your company in a day if you have a supply chain disruption.
8:13
SPEAKER_01: So the stakes are very high, you have to act very fast, you have to plan out very long.
8:17
SPEAKER_01: Um, and there's a lot of things that can go wrong, right?
8:20
SPEAKER_01: So, especially in supply chain, because we import a lot of materials into the US from Europe or China.
8:24
SPEAKER_01: And as when when COVID hit, it was a major challenge to keep the supply chain going.
8:29
SPEAKER_01: Really a major challenge.
8:30
SPEAKER_01: That meant we actually have to bolster, bolter, uh, bolster up our inventories, right, to make sure we have more buffer in case there's delays at the port, delays at the supplier, um, you name it.
8:40
SPEAKER_01: So we actually had to have more inventory in place, which means we had to move more capital, you know, on the side, right?
8:45
SPEAKER_01: Or capital in inventory.
8:46
SPEAKER_01: But what I'm trying to say with that is, you know, you constantly have to evolve your processes and structures.
8:51
SPEAKER_01: That's what I had to do in automotive.
8:53
SPEAKER_01: And it was extremely complicated.
8:54
SPEAKER_01: There was a really big team we worked with.
8:56
SPEAKER_01: Um also building that culture of like resilience, that's important.
9:00
SPEAKER_01: And especially in business, you needed your resiliency, right?
9:03
SPEAKER_01: Because in business, you like we just said, we get punched in the mouth sometimes, and then it's a question: you're gonna keep going, you're gonna give up.
9:09
SPEAKER_01: Um, so that translates into real estate really, really well.
9:12
SPEAKER_01: And I actually want to say like the real estate game or the arena I'm working in is less complicated than the automotive because it's very fast-paced.
9:18
SPEAKER_00: Yeah, business is the biggest, yeah, the hardest game.
9:20
SPEAKER_01: And then my my customers now technically are investors and tenants in a sense.
9:24
SPEAKER_01: We're serving tenants on the resident level, and then we're serving our investors for their returns.
9:28
SPEAKER_01: In the automotive industry, the customers were like the big guys, you know, the big gorillas, they're big attorneys, at big pockets, they're gonna they're gonna grill you when they're if they want to.
9:38
SPEAKER_01: And they'll throw their weight around.
9:39
SPEAKER_01: They're like big gorillas.
9:40
SPEAKER_01: They do.
9:40
SPEAKER_01: And I'm I don't fault them for it, it's just a game you're playing.
9:42
SPEAKER_01: If a small supplier, they take advantage of that in a sense, so they'll leverage that relationship.
9:47
SPEAKER_00: $3,000 a minute is analogous to liquidated damages in construction.
9:52
SPEAKER_00: You know, it's usually by the day, not by the minute in uh construction.
9:56
SPEAKER_00: But think about that.
9:57
SPEAKER_00: You have this functioning operating line that is very efficiently driven to drive cost at a certain price point to the to the marketplace.
10:06
SPEAKER_00: And the way they do that is by having a very lean system that moves.
10:11
SPEAKER_00: If you stop that, the cost of not having X amount of cars coming off that line every 30 seconds or whatever the number is, is significant.
10:20
SPEAKER_00: And someone's got to pay for that.
10:22
SPEAKER_00: And now they know exactly what that cost is.
10:24
SPEAKER_00: They put they didn't just like pick 3,000 out of the whim.
10:26
SPEAKER_00: They know that it costs$3,000 a minute.
10:29
SPEAKER_01: Correct.
10:29
SPEAKER_01: Yeah, it depends on facilities.
10:30
SPEAKER_01: Some facilities are bigger, the penalty might be a little bit higher, and some might be a little bit lower.
10:34
SPEAKER_01: Like that$3,000 is for the BMW facility that we supplied in Greenville, Spartanburg area in the upstate.
10:39
SPEAKER_01: It's the biggest BMW facility in the world, by the way.
10:41
SPEAKER_01: Although it's a German company, their biggest facility is in Greenville, Spartanburg, South Carolina, where I was uh stationed at.
10:47
SPEAKER_01: And they have eight, I think almost 10,000 people working there now.
10:50
SPEAKER_01: There were 8,000 a couple years ago.
10:51
SPEAKER_01: They expanded.
10:52
SPEAKER_01: I think they're over 10,000 people.
10:53
SPEAKER_01: Of course, there work shifts, but at any given time, three to four thousand people working there.
10:57
SPEAKER_01: If you shut the line down, they're all standing there doing nothing, and they need to get paid.
11:00
SPEAKER_01: That's where the penalty comes from.
11:01
SPEAKER_01: All the overhead, the energy costs, etc.
11:03
SPEAKER_01: So stakes are really high.
11:05
SPEAKER_01: And then you can have just like a truck breaking down the way to the facility.
11:08
SPEAKER_01: You did everything right and the truck breaks down.
11:10
SPEAKER_01: What are you gonna do then?
11:11
SPEAKER_01: And then you have to GPS tag those uh thrucks so that BMW knows when they're coming in.
11:15
SPEAKER_01: It's pretty wild.
11:16
SPEAKER_01: Uh it's high stake.
11:17
SPEAKER_01: You know, we did everything right, good to go, and you pass it onto the truck and the truck breaks down on the way.
11:21
SPEAKER_01: What do you do then?
11:22
SPEAKER_01: You have hopefully more inventory finished goods in the inventory, and then you get like a van shooting over there every hour just to like feed them so you don't get penalized while the truck gets repaired, gets a new whatever, uh new tire on or whatever, and that one delivers the next.
11:34
SPEAKER_01: I mean, it's just constant 24-7.
11:36
SPEAKER_00: They don't like store everything on there probably.
11:38
SPEAKER_01: No, I mean they literally, I mean, they have really harsh requirements.
11:41
SPEAKER_01: It's just in time, G J is called just in time production.
11:44
SPEAKER_01: So they say, I want to have this much at this hour, at this hour, and this hour.
11:48
SPEAKER_01: You don't if you deliver too much, you're actually gonna get uh a non-conformity, which means they slap your supplier score.
11:53
SPEAKER_01: And if your supplier score goes down, they're not gonna give you new business.
11:56
SPEAKER_01: It's really, really, really strict.
11:58
SPEAKER_00: That's amazing.
11:59
SPEAKER_01: Yeah.
11:59
SPEAKER_00: So talk about you now, you take these systems and processes, living in those kind of constraints, and think about a construction project where you have all these extra subcontractors, you have people coming in, you might not be able to get access to the site, you might not be able to get access to the floor, you can try to build the most efficient model.
12:17
SPEAKER_00: It's a construction site is nowhere near a BMW car dealership line, right?
12:22
SPEAKER_00: So if that's the pinnacle of efficiency, no construction site can be that efficient.
12:27
SPEAKER_00: It's just the nature of what's going on.
12:29
SPEAKER_00: But if you're trying to take what you learn there under those constraints, which forces you to be in is as efficient in what delivering that supply, how do you mold that uh into the construction realm?
12:42
SPEAKER_00: And how did you take it from there into the real estate realm, which involves construction in some capacities, it involves a lot more players, it's not as uniform.
12:51
SPEAKER_00: How did you think those systems through?
12:53
SPEAKER_01: It's basically the same thing, right?
12:55
SPEAKER_01: It's a little bit less complexity, a lot less complexity really in my world, but we still use in KPIs like we did in automotive.
13:01
SPEAKER_01: We just look at different KPIs, right?
13:03
SPEAKER_01: Um for us, occupancy is the oxygen, right?
13:06
SPEAKER_01: So you can have everything right, you can have every unit that is occupied at market rents, for example, um, you're in a good market, etc.
13:12
SPEAKER_01: But if your occupancy is too low, it and there's certain thresholds, some properties have to meet to actually cash flow and stuff like that.
13:19
SPEAKER_01: Um, then we know when we're hurting and bleeding, right?
13:21
SPEAKER_01: And this is the same what we did in automotive.
13:23
SPEAKER_01: What's our inventory levels?
13:24
SPEAKER_01: What are the finished goods inventories, etc.?
13:26
SPEAKER_01: So it's just really just focusing on KPIs and having those processes very streamlined.
13:30
SPEAKER_01: And I'm really learned, especially in automotive, it's all about bottlenecks and friction.
13:35
SPEAKER_01: Um, so removing the friction, removing the bottlenecks to make sure the team can flow very freely and be very nimble.
13:42
SPEAKER_01: Um, I think that's what translated really well into the real estate world that I'm you know in uh in in my business.
13:48
SPEAKER_01: Um, because I can see where the team is struggling and try to remove that bottleneck, is what I'm doing.
13:52
SPEAKER_01: I'm hovering over them at 30,000 feet and say, okay, they're struggling right here.
13:56
SPEAKER_01: How can I remove that piece or make that easier, right?
13:58
SPEAKER_01: And see, okay, they're they're working a lot on this paperwork right now.
14:01
SPEAKER_01: For you know, let's say the community manager's working on eviction paperwork.
14:04
SPEAKER_01: You know, it takes they have to file if it's a big property, like five or ten evictions, and you know, they've been behind on that stuff.
14:10
SPEAKER_01: And like, okay, let's how can we automate this, right?
14:12
SPEAKER_01: The paperwork.
14:12
SPEAKER_01: So you just have to plug in the spreadsheet the name and the address and the unit, and boom, it spits it out.
14:16
SPEAKER_01: And then I create that stuff.
14:17
SPEAKER_01: Okay, cool, they're fixed.
14:18
SPEAKER_01: Now the fire is over there.
14:19
SPEAKER_01: And it's just the same thing that we did in automotive, where we were like, okay, why do we why is our output only 80% of what it's supposed to be?
14:27
SPEAKER_01: And it's called OEE, and so the overall equipment efficiency rate in automotive.
14:31
SPEAKER_01: It's the same thing.
14:32
SPEAKER_01: Like, where is the friction?
14:33
SPEAKER_01: Why do you why are we operating at 60 or 65% where we should be at 80, 85?
14:37
SPEAKER_01: Anything over like 85 was like world-class efficiency.
14:40
SPEAKER_01: There's always like quality fallout, and also you not always hit cycle times.
14:44
SPEAKER_01: It's the same thing, you know, and then we ask the question, okay, why do don't we keep up uh with the output?
14:49
SPEAKER_01: You know, and ask the right questions, and then you talk to the operators like on the line and our line as a supplier.
14:54
SPEAKER_01: And then you realize, and oh yeah, every time the machine comes down, every third cycle, the machine gets stuck, and I have to manually push it up again and restart you know the automated processes.
15:03
SPEAKER_01: Okay, there's a sensor issue, get the maintenance out of here, get that fixed, boom, boom, boom, OEs back to 80%.
15:07
SPEAKER_01: You know, you just try to identify those issues, you know.
15:09
SPEAKER_00: Um so think about it, like if we're if we're now running a construction business, it's much like the real estate business and applying that.
15:19
SPEAKER_00: You mentioned KPIs, right?
15:21
SPEAKER_00: Key performance indicators.
15:23
SPEAKER_00: But let's say that no one construction project is the same.
15:28
SPEAKER_00: Let's talk about how you went about identifying these are the right key performance indicators.
15:34
SPEAKER_00: I didn't just read these in a book that says manage this.
15:36
SPEAKER_00: This was key for this property, or these were some were key for the overall industry.
15:41
SPEAKER_00: And like if you own if you're own and are running a mobile home park, you might have similar KPIs to an apartment complex, but there might be one or two that are different because of the property, because of where it's at, because of how you financed it, the way the investor group works.
15:56
SPEAKER_00: Like, but how do you go about finding those KPIs that are the right ones to pay attention to?
16:02
SPEAKER_00: So that if like I'm a project manager, a superintendent, or a leader, and I'm thinking, man, I want to I wanna I want to find the right KPIs to manage, right?
16:11
SPEAKER_00: What do you what do you do?
16:12
SPEAKER_01: So we all in the business of money, right?
16:14
SPEAKER_01: That's why we're in business to make money.
16:15
SPEAKER_01: So you have to understand your business where it makes the money and what is the most important metric for you for the business that you run.
16:22
SPEAKER_01: Um and I think once you identify those, just two or three that you're really focused on really deeply, from there you can have sub-KPIs that feed into those.
16:31
SPEAKER_01: For example, for us, occupancy is a big one, right?
16:34
SPEAKER_01: Because that's that's the oxygen for us.
16:36
SPEAKER_01: But what drives the occupancy, leasing, and then what happens with leasing?
16:40
SPEAKER_01: Applications, leads, application lead conversions.
16:43
SPEAKER_01: So also you have 20 KPIs feeding that one big one.
16:46
SPEAKER_01: But start with the big one because then you can see okay, if it's red, there's a problem.
16:50
SPEAKER_01: Let's dig deeper.
16:51
SPEAKER_01: And automotive is where I learned that too.
16:52
SPEAKER_01: There's a 5Y progress process, meaning like, okay, why do we have an issue here?
16:56
SPEAKER_01: Let's say there was a quality issue, and you say, Oh, um, this product was bad.
17:00
SPEAKER_01: Why?
17:00
SPEAKER_01: So, well, it came out of the stamina press wrong.
17:03
SPEAKER_01: Why?
17:03
SPEAKER_01: I said, Well, um, there was too much oil on it.
17:06
SPEAKER_01: Okay, why?
17:06
SPEAKER_01: So the operator just manly fed it.
17:08
SPEAKER_01: So, why?
17:09
SPEAKER_01: Okay.
17:09
SPEAKER_01: You ask those questions the 5Y until you get to the point, this should be automated so that the issue doesn't happen again.
17:14
SPEAKER_01: It's the same in the business industry, right?
17:17
SPEAKER_01: Uh in the business world where you look into like, okay, where are the issues, you know, and you highlight those KPIs that might be read for you.
17:24
SPEAKER_01: Um, and then asking those questions.
17:27
SPEAKER_01: Just the your quality of your business and quality of your success of your business is really determined by what kind of questions you ask and how good those questions are, in my opinion, because that's where you're driving really, really deep and you get really granular at times, which is good, because then you really start to understand all the nuances of your business.
17:42
SPEAKER_01: You can kind of fine-tune here and fine-tune here.
17:44
SPEAKER_01: I'm a little bit of a micromanager anyway, and maybe it's a bad trade as well, but I can't I know exactly what's going on at any given time based on all the KPIs we have in our business, which helps a lot to push the right buttons, right?
17:55
SPEAKER_01: And we teach our team, our cultures all very KPI driven.
17:58
SPEAKER_01: So we we run our own property management company.
18:01
SPEAKER_01: So my partner and I uh found a property management company that really serves our our entire portfolio.
18:06
SPEAKER_01: And twice a day, basically every 12 hours, we get a whole KPI dashboard from the back office just saying where we are, collections, delinquency, occupancy, etc.
18:15
SPEAKER_01: And there's different people on our team.
18:17
SPEAKER_01: The one is the leasing expert, one is you know, maintenance, basically dispatch for like repairs and maintenance, the other person's collections, and they're all reporting at the same time, beginning of the shift, end of the shift, where we are.
18:27
SPEAKER_01: We know exactly what's going on.
18:28
SPEAKER_01: When I get up in the morning, 7 in the morning, I get the first report, and know exactly, oh, yeah, our collections went up 20%.
18:34
SPEAKER_01: Because then they see trends, you know, in the month.
18:37
SPEAKER_01: Like, okay, the majority of people pay from the first to the 10th.
18:40
SPEAKER_01: Then there's like this gray area of the 10 to the 20th people not really paying, and then the people are either catching up or paying early for the next month, pay at the end of the month.
18:47
SPEAKER_01: So we can kind of capture those things.
18:49
SPEAKER_01: And you know, when you when you look at your data and the KPIs very heavily, where you can also position, also like seasonality with like leasing and stuff like that, where you want to do leasing the heaviest.
18:59
SPEAKER_01: In the winter, it's pretty much dead.
19:00
SPEAKER_01: People don't want to move the heavy the winter, depending on the state.
19:02
SPEAKER_01: So we're in Tampa, Florida, it's always nice here.
19:04
SPEAKER_01: Most of the time there's no snow.
19:06
SPEAKER_01: But if you have properties up north, for example, and there's a lot of snow, there's heavy winters, nobody wants to move.
19:11
SPEAKER_00: Nobody's gonna move.
19:11
SPEAKER_01: Yeah, exactly.
19:12
SPEAKER_01: You have to be ahead of that and see the curve.
19:14
SPEAKER_00: So you you brought up a good point, and you talked about the data and seeing the data.
19:19
SPEAKER_00: But one of the things after you create the KPIs is getting the information and data, but also putting that data in a system that you can see and a system that if you push a button, you can get access to it.
19:33
SPEAKER_00: Talk about how you go about doing that.
19:35
SPEAKER_00: What's the right way to put that together, and how did you do it inside your business?
19:39
SPEAKER_01: So in the beginning, when we started, we used an EOS system.
19:42
SPEAKER_01: Um it's based on the book from uh Gina Wickman Traction, and there was the traction EOS system.
19:46
SPEAKER_01: It got renamed in the meantime, and it's called the Bloom Growth now, where you can it's basically given like meeting structure where you start with a parser check-in, and you talk about headlines and KPIs, etc., opportunities and the to-dos.
19:57
SPEAKER_01: Um, and the KPIs, you put all the call KPIs into that meeting structure, so to speak.
20:02
SPEAKER_01: And then we set the goals, and then people put in, like whoever owns the KPI, there's always an owner for the KPI.
20:09
SPEAKER_01: Um, it puts that data in, and when we have the actual meeting, uh, let's say we have a top-level weekly meeting for with management, and we see if it's red, then we ask them, question, what's going on?
20:18
SPEAKER_01: And how can we fix this, for example.
20:20
SPEAKER_01: Now, as we are getting bigger, um and we are actually using like a of course a property management system where we extract the data right live out of the operating system, um, which is called Rent Manager for us, and we're using Power BI, Microsoft Power BI, and extracting all that data.
20:35
SPEAKER_01: So we actually have like a one dashboard which shows all the key metrics uh at all times.
20:40
SPEAKER_01: I can't pull this up on my phone right now and exactly what's going on with the business.
20:43
SPEAKER_01: It updates 8 in the morning, I believe, at 5 p.m.
20:46
SPEAKER_01: So twice a day it pulls the data out of rent manager, and we know exactly what's going on.
20:50
SPEAKER_01: It pulls the rent rules, pulls the you know, the occupancy, vacancy, etc.
20:54
SPEAKER_01: Shows trends, and I can filter their property.
20:56
SPEAKER_01: Um, it shows like where the most money comes from, which property, etc.
21:00
SPEAKER_01: So this is more like advanced, but you can be very simple.
21:02
SPEAKER_01: Do it with a spreadsheet in the beginning if you're getting started.
21:05
SPEAKER_01: If you have like an EOS system that I just mentioned, and it's like hundred bucks a month, that system.
21:09
SPEAKER_01: Yeah.
21:09
SPEAKER_01: I mean anybody in the business can afford that.
21:11
SPEAKER_01: So you can put that in and highlights everything in color if you're doing well, you don't do well.
21:15
SPEAKER_01: And then we're using Power BI right now to extract all that data into like a KPI dashboard where we can see everything in one look.
21:21
SPEAKER_01: So that's how we did it.
21:23
SPEAKER_01: So it works really well for us.
21:25
SPEAKER_00: Let me change gears on you for a second.
21:26
SPEAKER_00: So think about like the analysis of a project or a property, right?
21:31
SPEAKER_00: And I think they're analogous in the construction world.
21:33
SPEAKER_00: You got I'm gonna bid this project, how should I bid it, how should I go about executing it?
21:38
SPEAKER_00: The costs of execution are gonna be different.
21:41
SPEAKER_00: It's if I could snap my fingers today and it's done tomorrow, then it's gonna look just like my bid sheet, right?
21:46
SPEAKER_00: But that's not how it goes.
21:48
SPEAKER_00: Buying a property is similar.
21:50
SPEAKER_00: You have to look at what you're gonna do, you have all the soft costs, you have the analysis phase, you have to get to the execution, you have the closing.
21:58
SPEAKER_00: Then you ultimately have to actually execute.
22:00
SPEAKER_00: On the improvements or new build, whatever it is, and it's all based on your assumptions you made that what's going to happen whenever you get to your finished good.
22:07
SPEAKER_00: Correct.
22:08
SPEAKER_00: Well, if you think about it, the way I walk through that, that's very similar to a construction project.
22:12
SPEAKER_00: Whether you're any trade or the general contractor, very similar.
22:17
SPEAKER_00: So talk to me a little bit about the evaluation methodology that you go into it, how you're goal-seeking for it.
22:25
SPEAKER_00: And if you could do it with a thought process that a construction contractor executing a project, and let's say they're any trade contractor, it could be plumbing, drywall, roofing, whatever.
22:38
SPEAKER_00: As that structure is built, they have components to it.
22:42
SPEAKER_00: When it's over, they're gonna have contributed material costs, people, labor, and they're gonna get out of it a piece of revenue with hopefully some margin in it.
22:52
SPEAKER_02: Correct.
22:53
SPEAKER_00: And analyzing the method to do that and the cost going into it, again, is really similar to a real estate project.
23:00
SPEAKER_00: So talk about the concepts that you implement when looking at a project to say, yay, go, no, go.
23:07
SPEAKER_00: It's working, we need to bail out.
23:10
SPEAKER_00: Or it's not working, I mean it's not working, we need to bail out.
23:14
SPEAKER_00: Or we've we're now we're gonna keep moving and it needs to fit in these constraints.
23:17
SPEAKER_00: How do you and then you ultimately what you're trying to come up with is a price to buy it at and move forward.
23:23
SPEAKER_00: So what it what's your walk through that a little bit for me?
23:26
SPEAKER_01: Absolutely.
23:26
SPEAKER_01: Yeah, that's a good question.
23:27
SPEAKER_01: So for us, it's all about uh the underwriting, right?
23:30
SPEAKER_01: And um understanding the market that you uh are working in.
23:33
SPEAKER_01: So that that makes it really important.
23:34
SPEAKER_01: Especially we try to build in clusters in our portfolio, meaning we try to expend in markets that we're already in, so we know exactly what you know, even construction costs are if you do any development or infrastructure work, et cetera.
23:46
SPEAKER_01: We're paving roads in our communities as well because they're neglected, they have never been any road work done, they have sand roads, some of them, you know, they're very Mama Pump operated properties.
23:55
SPEAKER_01: Um they've been enhanced for decades for Marmor Pump operators, and we go in and actually sophisticate it, right?
24:01
SPEAKER_01: And bring the market rents up, and et cetera.
24:03
SPEAKER_01: So we put all this in the underwriting and see.
24:06
SPEAKER_01: We basically reverse engineer it.
24:07
SPEAKER_01: We basically look at okay, what investor returns are our investors looking for?
24:10
SPEAKER_01: We know our investor base.
24:12
SPEAKER_01: And depending on the deal size, there might be a different investor profile, but let's get a little bit too granular now.
24:16
SPEAKER_01: Uh but based on that, we reverse engineer it and say, okay, that's what that's the North Star.
24:20
SPEAKER_01: We need this return metric, and then what price can we support based on what we know in the market?
24:26
SPEAKER_01: So let's say this is the investor metric that we're looking for.
24:28
SPEAKER_01: Everything in the middle is the noise, all the metrics that you put in, meaning like what is that, what other rent increase we can put in place, what vacancies do we have, etc.
24:36
SPEAKER_01: And you have to kind of know your market.
24:37
SPEAKER_01: Say when you're working in construction, you have to know your market because labor costs are different in California compared to Florida, compared to New York or Idaho, whatever.
24:44
SPEAKER_01: So you have to know those metrics.
24:46
SPEAKER_01: And knowing your market and having that experience is makes the difference sometimes if you have a deal.
24:51
SPEAKER_01: We can make or break it.
24:52
SPEAKER_01: But sometimes people in our in our league, uh in our arena, they some buyers put an offer on the property, and the numbers might not work for them because they've never been in that market.
25:04
SPEAKER_01: But we've been in that market, we can be more competitive and we can just go in and say, yeah, we can pay a little more because we have the teams already that operate in that market.
25:11
SPEAKER_01: We can be cheaper, we can leverage our scale.
25:13
SPEAKER_01: Because, for example, for us landscaping, you know, landscape is pretty expensive, you know, keep common grounds maintained.
25:18
SPEAKER_01: But if you already have like, you know, uh eight properties there and we're adding another five, we get a really good rate then because we have a lot of scale.
25:25
SPEAKER_01: That gives you a competitive advantage.
25:26
SPEAKER_01: So knowing your market and scaling in the same area helps us a lot.
25:30
SPEAKER_01: And then putting all those metrics in, that spits out really the price that we can pay, so to speak.
25:35
SPEAKER_01: And that's the offer we can make.
25:36
SPEAKER_01: You mentioned bailing out.
25:38
SPEAKER_01: For us, we have like a due diligence phase after we're on the contract, and once we yeah, we can still bail out later, but we lose the earnest money deposit.
25:44
SPEAKER_01: And on bigger deals, it could be$100,000,$150,000, et cetera.
25:48
SPEAKER_01: As the bigger the deals get, the bigger the earnest money deposit gets.
25:52
SPEAKER_01: So there's still ways to bail out.
25:53
SPEAKER_01: But our goal is to really identify in the first 45 days we're under contract, if we're going to go for it or not.
25:58
SPEAKER_01: Um, we also don't raise capital until we know we're confident to actually pull through uh with the deal.
26:04
SPEAKER_01: So that's basically how we do it.
26:06
SPEAKER_01: It's really just um first when the deal comes across our desk, we look at okay, isn't the market we want to operate in?
26:12
SPEAKER_01: Is the deal big enough?
26:13
SPEAKER_01: Because we're getting bigger in size as well, where we have enough overhead where everybody needs to eat.
26:18
SPEAKER_01: So we cannot buy like 20-unit mobile home parks anymore.
26:20
SPEAKER_01: It has to be like 100, 200 plus, uh, depending on the market, of course, and uh and rents in the area.
26:26
SPEAKER_01: Um and it has to feed our investors, it has to feed us, you know, as business owners, and you know, we're driving the value up of the business.
26:32
SPEAKER_01: So we we need to get you know food on the table.
26:34
SPEAKER_00: It's gotta be big enough.
26:35
SPEAKER_01: It's gotta be big enough, exactly.
26:36
SPEAKER_01: And as you get bigger, you're also starting to um dance in a different arena as well, where you're all of a sudden competing with institutional money, which they have a different weight they can throw around, they get much better dead than you, etc.
26:48
SPEAKER_01: So as you grow, the challenges never stop.
26:51
SPEAKER_01: I mean, maybe that's what the audience can take away from this too.
26:53
SPEAKER_01: Like you have different challenges when you're small, and you have different challenges when you get in the middle, and then if you're bigger have different challenges too.
26:58
SPEAKER_00: So you gotta learn along the way.
27:01
SPEAKER_00: You can't you cannot just wing it because you're always gonna have to learn something new.
27:05
SPEAKER_00: Well, you can't just assume that you know it all based on that advice.
27:08
SPEAKER_00: Because once you start knowing it all, you're gonna start to grow.
27:10
SPEAKER_00: Once you start to grow, you're gonna get new challenges.
27:12
SPEAKER_00: Once you get new challenges, you have to have a way to assess those so you don't get ruined by any of them.
27:16
SPEAKER_00: Correct.
27:17
SPEAKER_00: Um you know, you mentioned uh capital stewardship and when revenue is not always predictable, okay, uh, or you're entering a new market, you're you're working in construction, you're you're taking on a new customer, a new general contractor, and you've never done condo projects before you're gonna do condo projects.
27:38
SPEAKER_00: You've never done you're always on horizontal, now you're gonna do a vertical project.
27:41
SPEAKER_00: Whatever it may be, you're you're going you're entering into an unknown variable.
27:46
SPEAKER_00: It doesn't mean you shouldn't, but there's things you should assess differently.
27:51
SPEAKER_00: How do you go about doing that using an operator's mentality?
27:56
SPEAKER_00: And where are some of those thought patterns, the questions you should ask yourself?
27:59
SPEAKER_00: How do you kind of hedge some risk while you're inherently taking risk?
28:03
SPEAKER_01: I love that question.
28:05
SPEAKER_01: I always love that quote where it says, if you want to know the road ahead, ask the people that are coming back.
28:10
SPEAKER_01: That's what I always do.
28:11
SPEAKER_01: If we we're building a lot of verticals in our business as well right now, um, because we have that scale and we also have the capital raising arm build out where we can raise capital and also do right now, right now you want to go into land home packages where you buy pieces of land and we actually put double wide mobile homes on them, detitle them, and send it as a land home package like a regular real estate, like stick build homes.
28:32
SPEAKER_01: This is a vertical, but we've never done it before.
28:34
SPEAKER_01: So, what we do, we're gonna ask people that actually done it.
28:36
SPEAKER_01: And in in the real estate industry, people love to help each other because it there's an abundance of real estate out there.
28:41
SPEAKER_01: If you know a guy that does it, we're just gonna ask him, hey man, yeah, let's meet for dinner, we pay dinner, whatever, and then ask a bunch of questions, and then from there, then you run it as a business.
28:50
SPEAKER_01: And okay, what are the key KPIs?
28:52
SPEAKER_01: Back to our discussion point earlier.
28:54
SPEAKER_01: What are the key KPIs we have to watch for for this?
28:56
SPEAKER_01: Um, and then basically mold that business around it, right?
29:00
SPEAKER_01: Um, I always like to who not how, right, like that book from Dan Sullivan.
29:04
SPEAKER_01: It's it's one of my favorite books.
29:06
SPEAKER_01: Um it's not just you don't have to know everything, just ask the right people.
29:09
SPEAKER_01: Um, and as you're building that network, doesn't matter what question comes across my desk, I know exactly who to call, if that makes sense.
29:15
SPEAKER_01: And if maybe I'm not sure if that person knows all the answers, but they may know somebody that knows the next round of questions or the answers of the questions I have.
29:23
SPEAKER_01: So that that's super powerful.
29:25
SPEAKER_00: I like that.
29:26
SPEAKER_00: So let's talk about.
29:28
SPEAKER_00: I'm now in business, right?
29:30
SPEAKER_00: Whether it's construction, real estate, doesn't matter.
29:32
SPEAKER_00: I'm a I'm in business.
29:34
SPEAKER_00: And we've already talked about if you're an executive or you're you're a business owner, that's the business you're in, actually.
29:42
SPEAKER_00: And I'm trying to figure out, man, this all sounds good, but I don't know if I'm making mistakes.
29:46
SPEAKER_00: I don't know if I I feel good, but I'm also uncomfortable.
29:49
SPEAKER_00: But they also said I should be uncomfortable.
29:51
SPEAKER_00: Well, they said I should have systems, I do.
29:53
SPEAKER_00: How do I what would I be feeling like?
29:56
SPEAKER_00: What kind of feelings would I have when I that I should be aware of to know my systems aren't quite right?
30:03
SPEAKER_00: Um I I'm doing some things right, but I'm not doing them all right.
30:08
SPEAKER_00: And and it those types of things are gonna exert certain reactions and feelings.
30:13
SPEAKER_00: And so where I'm trying to go is if I'm a business owner, listen to this, I want to t tell them this is how you feel when something's not going quite right, and this is where you could go look.
30:24
SPEAKER_00: You understand what I'm saying?
30:25
SPEAKER_01: Absolutely, man.
30:26
SPEAKER_01: Absolutely.
30:28
SPEAKER_01: If you feel like everything's under control, you probably don't play a big enough game, if that makes sense.
30:32
SPEAKER_01: You're not going fast enough.
30:34
SPEAKER_01: Um but fast enough, I don't mean like grow undisciplined.
30:37
SPEAKER_01: I'm meaning if you're 100% comfortable, you probably have to step up your game and actually try to like grow a little bit.
30:44
SPEAKER_01: How do you grow muscle?
30:45
SPEAKER_01: It's breaking it down and rebuilds itself.
30:47
SPEAKER_01: That's what you have to do in business as well.
30:48
SPEAKER_01: It doesn't mean you have to be reckless and like destroy your business, obviously.
30:51
SPEAKER_01: You shouldn't actually.
30:52
SPEAKER_00: You shouldn't be specific.
30:54
SPEAKER_00: Yeah.
30:54
SPEAKER_00: You definitely don't do that.
30:55
SPEAKER_01: Exactly.
30:56
SPEAKER_01: Yeah, you definitely shouldn't do that.
30:58
SPEAKER_01: Um, but it's it's very powerful um when you understand that internal turmoil that you maybe have is actually a good thing.
31:07
SPEAKER_01: Because if I feel that, I know I'm on the right on the right track because I get uncomfortable, if that makes sense.
31:12
SPEAKER_01: That's the way I feel.
31:12
SPEAKER_01: And I know a lot of people that are successful at the business and they feel the same way.
31:15
SPEAKER_01: If I get uncomfortable, it's like I'm on the right track now.
31:17
SPEAKER_01: If I feel comfortable, I actually should feel nervous about that because I'm probably not doing something that's big enough yet.
31:23
SPEAKER_01: So um you would never have it figured out all the way.
31:26
SPEAKER_01: I might want to add to for the audience.
31:29
SPEAKER_01: You figure it out as you go, but it doesn't mean that you shouldn't do your homework and be prepared, right?
31:35
SPEAKER_01: But there's always a couple things when you get into a new venture that you try to figure everything out.
31:42
SPEAKER_01: You can read books, as many books as you want.
31:44
SPEAKER_01: And I read a lot of books before I got into real estate.
31:45
SPEAKER_01: But at some point I was like, okay, I read like 40 books now.
31:47
SPEAKER_01: Let's let's do something about it, right?
31:49
SPEAKER_01: Because perfection is very, very expensive.
31:52
SPEAKER_01: But imperfect action is very profitable because you just take an action, then you fail a little bit, and you know next time to do it better that way because you failed a little bit.
31:59
SPEAKER_01: Again, don't be reckless.
32:00
SPEAKER_01: Doesn't mean like I have no idea what I'm doing, and now I want to buy a hundred units, apartment complex, whatever, and then you get really punched in the mouth.
32:07
SPEAKER_01: But I tell people all the time like the first deal that you're making, start small, get a single family home, get a duplex, it just cash flows a little bit.
32:14
SPEAKER_01: But it that you learn property management on a small scale, in a very small scale.
32:19
SPEAKER_01: If something happens there, you can always sell it relatively quickly.
32:22
SPEAKER_01: You know, you don't get if you're wrong on the rent projections on the duplex, you're wrong twice.
32:26
SPEAKER_01: On the 100 unit, you're wrong a hundred times.
32:28
SPEAKER_01: And then it drives the value down pretty rapidly.
32:30
SPEAKER_01: You lose a lot of money.
32:31
SPEAKER_01: Not only your money, but other people's money.
32:33
SPEAKER_00: Drives the value down and the pain up.
32:35
SPEAKER_01: Exactly.
32:35
SPEAKER_01: Exactly right.
32:36
SPEAKER_01: So yeah.
32:38
SPEAKER_00: You know, um I was talking to one of our executives earlier last week or this week, and and she mentioned to me, she goes, you know, what are we gonna do?
32:47
SPEAKER_00: Think how great it's gonna be when we have these three, four problems that we've been working on for the last few months fixed, right?
32:53
SPEAKER_00: And I was like, She goes, what?
32:56
SPEAKER_00: I was like, oh I think I'd be scared to death.
32:58
SPEAKER_00: And you said something that's exactly true.
33:01
SPEAKER_00: In the middle of dealing with problems is a comfort to it at a certain point when you're in business because you know what problems you're dealing with.
33:10
SPEAKER_00: When everything's going really well, it actually scares the shit out of me.
33:14
SPEAKER_00: Because I know something's gonna happen and I don't know what magnitude it's gonna be, and I don't know what degree it's gonna be, and I don't know where it's gonna come from.
33:22
SPEAKER_00: And so it actually has an uncomfortableness to it that is real.
33:26
SPEAKER_00: And I I mean I'm being serious about that because it's it scares you.
33:30
SPEAKER_00: You don't always have, very rarely do you always have everything running smooth.
33:33
SPEAKER_02: Yeah.
33:34
SPEAKER_00: But if you want, if you if you feel like you have everything running smooth and you want to pull that problem out, go go on vacation.
33:39
SPEAKER_00: It usually shows up about one minute after you get on the plane.
33:42
SPEAKER_00: When you land.
33:42
SPEAKER_00: Yeah, yeah, yeah.
33:43
SPEAKER_00: When you land, it's with all the problems come.
33:45
SPEAKER_00: But no, I'm half kidding there.
33:47
SPEAKER_00: But but that's you mentioned that and it's true.
33:49
SPEAKER_00: So when you you you gotta realize like you're just gonna live in that moment, there's gonna be problems.
33:54
SPEAKER_00: And if you're really thinking like an executive and you have an operator mentality, you also said you're kind of sitting above and finding where the places get stuck.
34:05
SPEAKER_00: And I like to call it get them unstuck.
34:07
SPEAKER_00: You know, I'm talking when I'm talking to our executives, I'm talking about find where your team is stuck and help them get unstuck.
34:14
SPEAKER_00: When I'm talking to our team members that are closer to the customer, I'm talking the same thing.
34:18
SPEAKER_00: Find out where the customer's stuck and let's figure out how to help them get unstuck.
34:23
SPEAKER_00: You know, it's the same thing.
34:24
SPEAKER_00: Release valve, like provide some grease, you know, get it smooth.
34:27
SPEAKER_00: I would like what's that?
34:28
SPEAKER_00: I don't know, the um the winter sport we're watching the Olympics, where they like push this little ball down, the people in front of it are just like curling.
34:36
SPEAKER_00: Yeah, yeah.
34:36
SPEAKER_00: You know, they're getting in front of it and they're moving, like that's what you want to do.
34:39
SPEAKER_00: You know, clear the path, like get it smoothed out, remove some friction, and people can really be start to flourish.
34:46
SPEAKER_02: Correct.
34:47
SPEAKER_00: Only when you have good systems in place, though.
34:49
SPEAKER_00: Otherwise, you just have chaos.
34:51
SPEAKER_00: Correct.
34:51
SPEAKER_00: And and you can't manage chaos, you can't fix chaos, you can't even do anything with chaos, you just stay stressed.
34:56
SPEAKER_01: Aaron Powell Exactly.
34:57
SPEAKER_01: And then the KPIs make it very important too that you have them that that you then know what is not working.
35:02
SPEAKER_01: You should have, if there's stress in the business and you have KPIs, you know exactly where the problem is right away.
35:06
SPEAKER_01: You actually can see it coming sometimes if there's a slight decline somewhere in some KPIs.
35:10
SPEAKER_01: I can see problems coming sometimes.
35:12
SPEAKER_01: And then you know we can be ahead of the curve and try to correct it as we as we go, right?
35:17
SPEAKER_01: Trevor Burrus, Jr.
35:17
SPEAKER_00: That's why your data systems are so key, because you can see the analysis in the data.
35:21
SPEAKER_00: One or two days, a little blip, you're like, okay, Thursday or Friday, I should see a pretty big spike.
35:26
SPEAKER_02: Yeah.
35:27
SPEAKER_00: You don't see that spike, you're like, whew, you go into the weekend a little nervous.
35:31
SPEAKER_00: Monday, you see a huge pop, you can relax again.
35:34
SPEAKER_00: Yeah.
35:34
SPEAKER_00: You still see it trending neutral to negative, you know you got a problem somewhere.
35:38
SPEAKER_00: Correct.
35:39
SPEAKER_00: And now you know where to go look, you know.
35:41
SPEAKER_00: And you might find that someone hadn't checked the mailbox, you know, in six days.
35:45
SPEAKER_00: And then you're like, no problem.
35:48
SPEAKER_00: Exactly.
35:49
SPEAKER_00: All all of our not the the the 15% that don't send auto checks are auto-devits, you know, are in this mailbox and no one went and checked it.
35:57
SPEAKER_00: Um let me ask you this last question.
36:01
SPEAKER_00: And this is about leadership when you're under pressure.
36:06
SPEAKER_00: So when stakes are really high and you don't have all the information, it's incomplete, but you still are forced as a leader to make decisions.
36:14
SPEAKER_00: What are the what is the framework or the guidance you lean back on when you don't have all your data, you don't have all your systems, but you gotta make a choice?
36:23
SPEAKER_01: Hmm.
36:23
SPEAKER_01: That's a good question.
36:25
SPEAKER_01: If you lead a team, you have to be the calm leader.
36:29
SPEAKER_01: If once you get nervous and starting to lash out on people, and you make the entire team nervous.
36:33
SPEAKER_01: And they are the they are the you you spearheading it for them, um, obviously.
36:38
SPEAKER_01: So you have to be very, very calm on.
36:40
SPEAKER_01: As usually what I'm trying to teach myself is when there's a huge problem that we have to deal with, I try to be as calm as possible.
36:46
SPEAKER_01: Even if that means I have to do a walk around the block, you know, my neighborhood or something.
36:49
SPEAKER_01: Just get you know, get the blood flowing and you know, calm down a little bit.
36:52
SPEAKER_01: And usually don't get out of shape too much because of the automotive.
36:54
SPEAKER_01: I got like smacked in the face every 12 minutes.
36:56
SPEAKER_01: Uh so like in the real estate, we have problems, and I'm like, okay, we can figure this out.
37:00
SPEAKER_01: And people freak out sometimes in our team, but I'm just like, hey, we can fix this, no problem.
37:04
SPEAKER_01: So what do you think we should do?
37:06
SPEAKER_01: Because you know, the person that brings it to me, the subject matter expert, I call them.
37:09
SPEAKER_01: You know, you the community manager, you the asset manager.
37:11
SPEAKER_01: What do you think we should do?
37:12
SPEAKER_01: What kind of what two or three options do we have?
37:14
SPEAKER_01: And we're just gonna talk about it.
37:15
SPEAKER_01: And then what I like to do, I like to crack jokes sometimes, and it kind of like gets people like relaxed again.
37:21
SPEAKER_01: So like it's funny, like I always said that in automotive, but people are like freaking out, but like this material is not here, and it might show up tomorrow.
37:28
SPEAKER_01: We airlifted some stuff from Europe and hope the airplane isn't up to late.
37:32
SPEAKER_01: And it's like, you know what?
37:33
SPEAKER_01: At least we don't have patients dying.
37:34
SPEAKER_01: I mean, it's just car parts.
37:36
SPEAKER_00: Yeah.
37:36
SPEAKER_01: You know, like, whew, man, that's one way to look at it.
37:38
SPEAKER_01: It's like, don't get me wrong, I take it very seriously.
37:40
SPEAKER_01: I want to run the business, but I mean, like, I don't I cannot fly an airplane.
37:43
SPEAKER_01: I'm not in Germany right now, and I just have to trust that pilot gets it over here on time.
37:47
SPEAKER_01: I mean, it's there's nothing I can control.
37:49
SPEAKER_01: So don't freak out about stuff you can't control and try to like I'm gonna pop a couple jokes that have to relax the whole team basically.
37:55
SPEAKER_01: That works really well for me.
37:57
SPEAKER_00: Um just gets everybody thinking more clearly, too.
37:59
SPEAKER_01: Exactly.
38:00
SPEAKER_01: Because they usually have like, if you're freaking out, you usually have like a little bit of terror on your mind, and then people get that.
38:04
SPEAKER_01: Some people get that really quickly, especially if you don't have that resiliency build.
38:08
SPEAKER_01: Um, and then you know, just try to like be the leader, the calm leader.
38:11
SPEAKER_01: It doesn't mean you're not taking it seriously, but it just means that you try to unplug their mindset and get that, you know, um solution-driven thinking going.
38:20
SPEAKER_01: And then sometimes they have the answers.
38:21
SPEAKER_01: It's just like that panic in their mind blocks the answer, and then I don't have the answer, but just the conversation surfaces the answer, and that helps a lot.
38:30
SPEAKER_01: And sometimes when we talk, maybe I have the answer, maybe they have it, and sometimes I have the answer.
38:34
SPEAKER_01: That's what I've that's what I do as a leader.
38:36
SPEAKER_01: Sometimes I have the answer, and I'm just gonna ask them the questions so they say the answer, that makes sense, because that gives them confidence the next time to come up with a solution themselves.
38:44
SPEAKER_01: Because I try to teach my team always like, hey, if you bring me a problem, that's fine, but bring me us two or three solutions.
38:50
SPEAKER_01: Give me something I can say no to, and then something I can say yes to.
38:53
SPEAKER_01: Don't just say, like, here's a pile of crap, I put it on my desk, and like I don't have all the data sets because it's a very granular issue.
39:00
SPEAKER_01: And then you are the subject matter expert, you tell me what options do we have, and then I can make a decision based on cost, or based on this, based on risk, based on that.
39:07
SPEAKER_01: So that's right.
39:08
SPEAKER_01: Yeah.
39:09
SPEAKER_00: What I often find is I typically know whether we need to go left or right, but the team helps me make the second and the third decision one after the big one.
39:20
SPEAKER_00: And um you do that by creating an environment for the conversation and and really caring about what the answer is.
39:26
SPEAKER_00: Because we all want the same outcome, you know.
39:28
SPEAKER_00: And people want certainty, but you gotta be able to get the certainty that people need really is a comfortable situation more than they need the certainty of the answer.
39:38
SPEAKER_00: Your job is just to make a decision when you get enough information to do so.
39:43
SPEAKER_02: Sure.
39:44
SPEAKER_00: And or when the time runs out and you have to.
39:46
SPEAKER_00: You know, hopefully they line up better.
39:48
SPEAKER_00: But not always, you know.
39:49
SPEAKER_01: Sometimes you have to call the shot, you know, it's fourth down, one to go, one second on the clock, you just have to call the shot sometimes.
39:54
SPEAKER_01: That happens.
39:56
SPEAKER_00: So the the show is called the mobilization mindset for a reason.
40:00
SPEAKER_00: So if there was one mindset shift that you could offer to people listening today that would help guide them down the path of what we've talked about, just one swing thought, they took nothing else.
40:11
SPEAKER_00: What shift in their mind could they implement today to be better off?
40:17
SPEAKER_01: Focus on action, not perfection.
40:19
SPEAKER_01: I've always been a perfectionist too, and that slowed me down in my career, so it probably could have been further if I would have started earlier with imperfect action, obviously.
40:28
SPEAKER_01: And growing aggressively is not always the right answer.
40:32
SPEAKER_01: Growing with discipline is the right answer.
40:34
SPEAKER_01: Always be disciplined, stick to your guns, stick to what you're good at.
40:37
SPEAKER_01: And then if you branch out and do have some vertical integrated business you're building within your empire, ask the right people the right questions.
40:44
SPEAKER_01: Um, maybe even co-GP with them.
40:46
SPEAKER_01: You know, that's what we call a co-general partner, co-GP with them.
40:49
SPEAKER_01: You know, give them some equity or whatever, and have like an advisor on the team and just hey, give you some of the upside, you know, and have the right advisor on the team, consultant, whatever you want to call them.
40:57
SPEAKER_01: So yeah, just also don't be a jerk to work with, goes a long way.
41:01
SPEAKER_01: If people hate you, you're not gonna make it fun business.
41:04
SPEAKER_01: So if you're a likable person, man, life is gonna be so much easier, especially in business, man.
41:08
SPEAKER_00: Very true.
41:08
SPEAKER_00: Yeah, I like I like what you said there.
41:11
SPEAKER_00: Go, but also do it with some humility.
41:13
SPEAKER_00: Yeah, be willing and ready to pivot because you're probably gonna.
41:17
SPEAKER_00: If you're not gonna always be right on every step.
41:19
SPEAKER_00: So just go in the right direction, be wary or where, and be ready to quickly pivot and take a nuance to get yourself to where you end up.
41:26
SPEAKER_02: Exactly.
41:27
SPEAKER_02: I love it, man.
41:27
SPEAKER_02: Awesome.
41:28
SPEAKER_00: I love it.
41:28
SPEAKER_00: Well, Mattanias, I appreciate it, man.
41:31
SPEAKER_00: This has been a great show.
41:32
SPEAKER_00: Um, I know everyone can find you in the show notes.
41:35
SPEAKER_00: They know how to find you here.
41:36
SPEAKER_00: Maybe they could be a real estate investor, maybe they could help help you uh find good sites for for those of you listening.
41:42
SPEAKER_00: Um, one thing real estate investors love is a great site person.
41:45
SPEAKER_02: That's true.
41:46
SPEAKER_02: 100%.
41:47
SPEAKER_00: If you're driving down the road and you got a good site, talk to our boy here.
41:51
SPEAKER_01: Love it.
41:51
SPEAKER_01: Thanks, Scott.
41:52
SPEAKER_01: Thanks for having me.
41:53
SPEAKER_01: That was a blast.
41:53
SPEAKER_00: All right, everyone.
41:54
SPEAKER_00: Until next time, have a great week.
41:56
SPEAKER_00: Check us both out on LinkedIn, our YouTube channel, mobilization funding, and may God bless you.